As the cost of living in Iran continues to surge, an increasing number of Iranians are facing the daunting challenge of making ends meet. Basic necessities such as food, housing, and healthcare have become increasingly elusive for a significant portion of the population.
Farshad Momeni, an economist within Iran’s regime, recently made a stark observation during a roundtable discussion with Hossein Raghfar, another economist, in September. He drew upon the economic ideas of John Maynard Keynes, particularly Keynes’ book ‘The Economic Consequences of the Peace,’ to emphasize the gravity of the situation: “When inflation surpasses conventional limits and persists, it threatens the very foundation of society. Therefore, it is imperative that those in power understand they are, in essence, digging their own graves. Large segments of the population are enduring suffering, poverty, and misery, and as a result, the social fabric is under severe strain.”
Before delving deeper into the issue, Momeni refers to the book ‘Transition to Egalitarian Development’ by Keith Griffin and Jeffrey James, highlighting that “a structural problem demands a structural solution.” He is specifically addressing the rampant double-digit inflation that has taken hold of Iran’s economy. He asserts, “When inflation persists in a country for over 50 years, it indicates a structural problem. Purely economic manipulations cannot remedy this situation. To address it effectively, there must first be a political will, which is unattainable in a system where the government and its power structure exhibit unfairness.”
In simple terms, Iran’s economic problems, which have persisted for over four decades, cannot be resolved through economic measures alone. These crises are deeply rooted in the flawed foundation of the Velayat al-Faqih system, and a comprehensive, structural solution is required.
Momeni refrains from defining the term ‘structural solution’ explicitly, suggesting that it falls outside his purview and is a sensitive topic. Instead, he contends that the government and its power structure lack the political will to address this critical issue.
This statement implicitly acknowledges that resolving Iran’s economic and social woes hinges on challenging the very political structure of Velayat-e Faghih—a sentiment expressed by the People’s Mojahedin Organization of Iran (PMOI/MEK) since the inception of this regime. Despite changing governments, from the so-called reformist faction to the principlists, the core structure of this system, characterized by corruption and systematic looting, remains unchanged. Momeni makes this point clear:
“For more than 30 years, successive governments in Iran have displayed starkly different appearances and slogans from their predecessors. Yet, they have all implemented the same economic policy package. This is not haphazard; it is a calculated move. Iran’s economy is ensnared in a triple alliance dominated by shortsightedness and mafia-style dealings. Rentier, unproductive, and mercenary sectors readily sacrifice long-term national interests for short-term gains, while nationalist neoclassicals provide justifications for these mafia-like relationships. Consequently, it is evident that if a reckoning were to occur, the fallacies propagated in the name of marketism in Iran, which serve to legitimize these corrupt relationships, would crumble.”
The root cause of these issues, as pointed out by the regime’s supreme leader Ali Khamenei, is the “seven-headed dragon of corruption.”
Furthermore, Momeni sheds light on the role of counterfeit money in Iran’s economy, relying on official reports: “For the past two decades, fake currency has accounted for between 75% and 85% of Iran’s economy. The most alarming aspect is the enormous scale of this counterfeit money, with 75% of deposits belonging to just 1% of depositors. This glaring and unjustified wealth disparity is a testament to the deeply abnormal distribution of wealth.”
Recognizing the “most terrible, most violent, and most blatant justified inequality” within Iranian society, he expresses his apprehension about the potential consequences: “In a situation where unjustified inequalities surpass conventional limits, no one is safe—neither the rulers, the wealthy, nor the marginalized.”
Perhaps one of the most enlightening moments of the roundtable is Momeni’s advice to those in power: “Take heed of what Keynes emphasizes, for he is the savior of the capitalist system. He is simply warning that those who have vested interests in inflationary policies are essentially preparing an all-encompassing grave to bury a civilization.”
It is evident that such well-intentioned advice alone will not resolve the regime’s myriad problems. The tremors of multiple nationwide uprisings foreshadow a seismic shift in Iranian society. The main power brokers have, in many ways, sealed their own fates long ago.
