Petrolic Despotism (2): the Quantity and Quality of Economic Change

  • Homa Katouzian


The most important factor influencing the quantity and quality of life and labour from 1964 was the growth, and later explosion, of the oil revenues. Other factors were also at work; but, independently from oil, they would have led to significantly different results. Without the growing oil revenues — and the spurious economic growth which they promoted — the attempt to restore Iranian despotism would not have succeeded — at least, not completely: there would not have been sufficient funds to purchase the co-operation, acquiescence, complicity (or, simply, desperate silence) of various social groups, and individuals; or to finance the pseudo-modernist strategy of economic development. Apart from that, the régime would have been more dependent on Western powers, especially America, because of its military and financial requirements; and less able to establish friendly relations with the Soviet Union, China, and similar countries. By contrast, there would have been less foreign trade and less economic presence of foreign capital and labour. In a word, the state would have been much less powerful, and the political economy much more independent of it. Oil was the independent variable of the whole socio-economic fabric. Its abuse led to an uneven growth of purchasing power among the urban community; radically changed the structure of the economy; effectively destroyed Iranian agriculture and rural society; rapidly increased social and geographical mobility;


Labour Force Average Annual Rate Aggregate Consumption State Consumption Urban Sector 
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© M. A. H. Katouzian 1981

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  • Homa Katouzian

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