The role of ideology

At the end of the day the religious state functions in a way not dissimilar to that of the liberal bourgeoisie in the west, argues Yassamine Mather

In late summer 2017, the Financial Times warned about the precarious nature of Iran’s banking sector:

For decades isolated from the rest of the financial world, many Iranian banks struggle to comply with international banking norms. After years of populist policies, many are beset by high levels of bad loans ...

Sound familiar? The issue is clearly not unique to Iran and, of course, part of the problem lies outside the country’s borders. Continued US and European sanctions, related to allegations of terrorism against Iranian entities linked to the Revolutionary Guards (even in the privatised sector), means that leading international banks still refuse to deal with Iran. Only Chinese, Russian, Indian and some second- and third-tier European banks are handling small transactions with Iranian companies.

The Financial Times also warned:

Iran’s lenders - most of which are nominally private, but affiliated to state bodies - have long operated in a regulatory environment characterised by low capital adequacy requirements, weak supervision and a scarcity of well-trained auditors ...

As borrowers struggle to repay their loans, the amount of debt on bank books continues to rise. Total debt owed by state and private-sector entities to banks reached IR11,374trillion ($346.5 billion) by the end of the last Iranian year (March 20), up 25% on the previous year, according to the central bank figures ...

Banks charge 28% on loans. “Which business makes 30% profits to be able to get or pay back banking loans? No business,” said a senior businessman in the private sector. The central bank has no choice but to force banks to write down their assets and bail out troubled credit institutions.1

In the last few years the 23%-25% interest rate paid on a savings account has encouraged sections of small capital to shut down businesses and concentrate investments in such banks.

However, by autumn of last year many such banks were collapsing, with savers losing all their money, and the financial repercussions of this has affected many pension funds, in what is described as a cascade of defaults.

According to the New York Times,

Bijan Khajehpour, an Iranian economist based in Vienna, estimated that as many as hundreds of thousands of people lost money because of the collapsing financial institutions. Iranians have a term for the growing class of victims: “property losers,” or mal-baakhtegan in Persian. Many of the failing institutions sank the money into speculative investments during a real estate bubble, lent to well-connected friends or charged usurious interest rates to desperate borrowers. Now, regulators have quietly steered many of the companies into mergers with larger banks to try to absorb their losses, but that has created a worsening problem of bad loans and overvalued assets throughout the banking system.

Economists say that as many as 40% of the loans carried on the books of Iranian banks may be delinquent.2

Again does this sound familiar? Of course it does. In the UK we know about the British Home Stores pension fund, while members of the University and College Union have been striking in defence of their pension funds.

However, in Iran corruption, cronyism and greed have been working hand in hand, allowing financial institutions to gamble with ordinary people’s deposits or run Ponzi schemes with impunity for years. Many got away with it because they had good connections with the country’s multifaceted financial organisations, involving religious foundations, current or former leaders of the Revolutionary Guards, as well as semi-private funds. But, while corruption under Iran’s Islamic republic has reached extraordinary levels, those bourgeois liberals who point the finger at the current regime tend to forget that under the rule of their hero, Mohammad Reza Pahlavi, the situation was not much better. Bank Ellie, the national industrial and financial loans section, would only lend to organisations which had the support of the shah’s family. Of course we are now talking of much more diverse groups influencing financial funding, but this has little to do with the ideological nature of the religious state and everything to do with abuse of state power in pursuit of the interests of capital - a common feature of capitalism in the third world.

In other words, the current crisis in Iran is not that different from what is experienced in more liberal, non-religious, third world capitalist countries. But our bourgeois opposition has only one solution: once we get rid of the ‘ideological’ influence over the state everything will be fine.

One should remind these ignorant people that:

The most ideological state I personally have ever encountered was that of Margaret Thatcher, who closed down coal mines and ruined whole communities, while importing more expensive coal. There was only one justification: defeat the working class and pave the way for finance capital.

I have always found Louis Althusser’s writing on this subject to be very relevant. Relying on Marxist theory, he asserts that any social formation must ensure that labour-power is reproduced. Only if the productive forces exist can the conditions and relations of production be maintained. That is why in addition to infrastructure the state needs a superstructure, consisting of culture and ideology.

According to Althusser, culture includes the law, politics, art, etc, while ideology includes world views, values and beliefs - today the mass media play a significant role in propagating such ideology. In his opinion the repressive state apparatus functions as a unified entity (an institution), unlike the liberal state apparatus, which is diverse in nature and can play many roles. The apparatus of the state, repressive and ideological, is responsible for overseeing the double functions of violence and ideology. In liberal democracies the state only makes overt use of the repressive state apparatus if the position of the ruling class or the social order is threatened, but more subtle forms of repression are constantly employed.

The capitalist ideological state apparatus does not normally need to use physical violence, relying instead on educational institutions, the mass media, paid social media, advertising, religious beliefs, the family as well as market forces. Yet Iranian bourgeois liberals consider all of the above to be ‘non-ideological’ - indeed apolitical: part of their cherished ‘civil society’. Nothing could be further from the truth. But in general there is no need to resort to overt repression: the ideological state apparatus oversees the dissemination of ideologies that reinforce the control of a dominant class. Dissenters are ridiculed and face isolation and rejection. In Althusser’s view, a social class cannot hold state power unless and until it simultaneously exercises hegemony over and through the ideological state apparatus.

Althusser is also right to point out that, when it comes to indoctrination, educational institutions have replaced religious ones. Education’s main role is to ensure that labour-power is reproduced in a suitable form for the functioning of capitalism. As far as Iran is concerned, one should add that the mass media from outside Iran plays a significant role in terms of culture and ideology, often painting a glorious picture of the west. Thirty-nine years after the creation of the Shia state almost everyone - including within the religious establishment - agrees that Islamic indoctrination has failed. To the chagrin of supreme leader Ali Khamenei, the overwhelming majority of young Iranians are not Islamists. As in the rest of the globalised world, the dominant culture - ideology - is that of international capital.

Of course, no-one should deny the discrimination that exists in higher education and in employment, imposed by the Iranian state on individuals who fail certain religious tests when applying for higher degrees or jobs. However, everyone knows that such tests are charades: the examiner is often as cynical about ‘Islamic behaviour’ as the applicant and very often the ‘religious’ test is an excuse for giving a job or position to those with connections. No doubt such tests are an insult to the intelligence of ordinary Iranians and obviously should be abolished. However, our bourgeois liberals conveniently forget that their favourite dictator, the shah, also imposed ‘tests’ - applicants had to demonstrate their knowledge of his book, The white revolution, based entirely on his idiotic conspiracy theories - compulsory reading at secondary school.

To summarise, the Iranian people are facing a disastrous economic situation: wages go unpaid, banks are defaulting, the elderly face poverty, as pension funds disappear into thin air. Added to which, there is the constant threat of new sanctions creating additional uncertainty in the economy. However, many of Iran’s economic problems are not that different from those of other third-world countries. In such circumstances it is criminal to create illusions about ‘regime change from above’, with the west as saviour, or to ferment illusions about the corrupt, inept ancien régime.


1. www.ft.com/content/ee47505a-7cd7-11e7-9108-edda0bcbc928.

2. www.nytimes.com/2018/01/20/world/middleeast/iran-protests-corruption-banks.html.