The Bonyads

One anti-capitalist aspect of Iran’s post-1979 economy is known as the Bonyads. These are Islamic charity organizations, essentially run as cooperatives, responsible for providing social services and welfare to Iran’s working classes. They are usually administered by religious clergy.

Although they receive state funds and subsidies, they are not directly state-run and make the day-to-day decisions as to how funds are allocated and spent. 80% of Bonyads are estimated to run at a loss, yet continue receiving state subsidies because their function is social, not profit-driven.

20-30% of Iran’s entire economy consists of these Bonyad enterprises. One of the more famous Bonyads -- the Mostazafan Foundation of the Islamic Revolution -- is the single-largest holding company in all of West Asia, consisting of the Shah’s expropriated personal properties.

The Bonyads employ up to five million Iranians, causing Western business outlets and pro-neoliberal Iranian opposition groups to complain that these organizations are ‘overstaffed,’ bloated, and inefficient. In a capitalist framework, having large institutions devoted to reducing unemployment as an end in itself makes no sense; however, under the religious and economic justice priorities of the Bonyads, this makes perfect sense.

In Islam, “zakat,” or charity, is one of the Five Pillars of Faith for any true believer. Iran is unique in that it adopted a practice that had historically remained the prerogative of individuals and transformed it into a central duty of the state to subsidize and promote.

Iran's Basij Councils

Basij Councils are another component of Iran’s revolutionary system and how the government connects with the working masses. The Basij is often incorrectly described as only a pro-government militia. While this is one of its functions, it doesn’t come close to describing the full picture.

The Basij was first created during Iran’s 1980-88 war with Iraq, where local councils were set up on a community, village, and neighborhood level to defend the Islamic Revolution from foreign invasion and internal counterrevolution.

When the war ended in 1988, the Basij took on many other functions besides military, community service, education, health clinics, infrastructure construction/repair, and disaster relief; their mandate was also to serve the Iranian masses. Joining is voluntary, and the only requirement is adherence to the principles of the Iranian Islamic Revolution.

Today, the Basij councils have over 17 million members, with each council having a “base” at a neighborhood or village level. Approximately 60-80,000 of these bases exist nationwide, with as few as ten people or as many as 100+ assigned to each base. Their recruits are overwhelmingly drawn from the working class and the poor. Half the Basij are youth, and one-third are women. Basij are not only Muslims—there are Christian, Jewish, and Zoroastrian Basij members as well.

A required part of becoming a member of the Basij is ideological, religious, and political education. Members are expected to take classes in the Quran, studying the works of key thinkers of the Iranian Revolution (For example, Ayatollah Khomeini, Morteza Motahhari, Ali Shariati, Mahmoud Taleghani), the struggle in Palestine, ethical codes of conduct, and other subjects. The Basij answers directly to the Supreme Leader of Iran and is under its direct command.

One of the appeals of the Basij is access to higher education; 40% of undergraduate university positions and 20% of graduate school positions are reserved for Basij members, making it attractive for working-class people to join.

The structure and function of the Basij bear a striking resemblance to that of the Communist Party apparatus that existed in the USSR and which still exists in China, Cuba, Vietnam, and the DPRK today.

The Supreme Leader of Iran, the Guardian Council, and the religious clergy in the holy city of Qom function as the politburo/party vanguard, while the Basij councils are the equivalent of the soviets in Russia or the Committees for the Defense of the Revolution in Cuba, which keep the leadership rooted in the working masses. Whether the ideology is Marxism-Leninism or Shia populism/Islamic socialism, the institutions themselves serve a similar function.

One cannot possibly understand how the Islamic Republic has held together for 45 years in the face of war, sanctions, imperialist encirclement, and ethnic separatist terrorism without acknowledging the popular and working-class backbone of the Iranian state.

The Iranian Revolutionary Guard

It might seem strange to include the IRGC in an analysis of Iran’s economic system, but the Revolutionary Guard are key players in Iran’s planned economy. They directly own and control much of Iran’s vital infrastructure outside the oil industry—roads, natural gas, railways, even banking. Many of Iran’s Revolutionary Guard were once part of the Basij militia in their youth and thus have been heavily vetted as patriotic and committed to the Islamic Revolution.

Their purpose is to manage Iran’s infrastructure and national security, above all else. Iran’s Revolutionary Guards are important to mention since Western media coverage often talks about Iran’s state-run assets being ‘privatized,’ especially during the tenure of President Ahmadinejad (2005-2013). In reality, most of these so-called privatizations transferred state-run enterprises (under the purview of the Iranian parliament) to Iran’s Revolutionary Guards. So, Iranian assets were moved from state control to state control and not privatized whatsoever.

So, between the Bonyads, the officially state-run sector, and enterprises run by the Revolutionary Guards, the majority of Iran’s economy is either directly controlled by the state or subsidized by it.

Iran As A Worker's State

The lesson we should draw from this brief overview of Iran’s economy is that, whether we technically label Iran’s economy as socialist or not (despite the many controversies over what socialism is), it is clearly NOT a neoliberal or free-market system.

The main purpose of this economic model is to first and foremost, to ensure the economic sovereignty and national security of Iran and secondly, to provide a safety net for the working classes and rural poor who are the main base of support for the Islamic Republic. It is clearly not about enriching certain powerful individuals.

Even allowing for corruption where unscrupulous individuals misuse such institutions to enrich themselves (a problem in every socialist system including the USSR and China), it remains a very difficult environment for a conventional bourgeoisie to grow, much less flourish. The arch-neoliberal Heritage Foundation ranks Iran in terms of ‘economic freedom’ (openness of its markets) in the bottom ten, along with the DPRK, Cuba, and Venezuela, which Iranians should take as a complement and testament to the success of their economy to benefit all.

Read part 3 of this series, CONTRADICTIONS AND ONGOING CHALLENGES OF IRAN'S ISLAMIC SOCIALISM