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The emergence and consolidation of capitalism
Kayhan Valadbaygi

After examining the emergence of capitalism in Iran during the era of Pax Britannica, this chapter scrutinises the wide-ranging land reform and the rapid industrialisation programme of the Shah under the name of the White Revolution. It contends that the shake-up of global capitalism and the shift in power from Britain to the United States in the global political economy after WWII laid the foundation for the restructuring of capitalism and the reorganisation of the state form in the developing states linked to the Western Bloc through the promotion of ISI strategy. Besides the structural conditions of the international system, it shows that the national class structure and the relation of political forces equally influenced this restructuring. In Iran, in the context of the Cold War, the Shah’s modernisation project, as an example of state capitalism, was geared toward the creation of modern industries. The chapter demonstrates that both the financial and technological support of the United States and the growing foreign reserves of the country due to the increasing oil revenues crucially aided the financing of the imports of machinery, components and other inputs needed to build up Iran’s industrial base. It consequently substantiates that the process generated a new, small, protected capitalist class with close ties to foreign capital, who controlled the whole apparatus of the state.

in Capitalism in contemporary Iran
Kayhan Valadbaygi

This chapter argues that the specificity of the nature of capital accumulation and its associated class formation needs to be given weight for understanding the state’s form. As a set of institutional forms reflective of social relations of production, the chapter stresses that the state cannot be understood with reference to national space in the era of the internationalisation of capital. By including civil society organisations in the analysis of state institutions as well as internally relating ideas to the material structure, the chapter argues that both formal state institutions and civil society organisations have been the zones of the struggle for mastery of the emerging internationally oriented capital fraction and the military–bonyad complex. It first documents how the struggles between these fractions have constructed some new institutions and changed the operation of existing institutions. It then highlights the internal relationship between the formation and crystallisation of the new discourse of ‘democratic Islam’ and the re-articulation of ‘revolutionary Islam’ to the process of neoliberalisation. Although these discourses have been articulated through civil society organisations, it demonstrates that the realisation and relevance of these ideas have been dependent on the availability of material organisations provided by the aforementioned fractions while the historical existence of the different interpretations of Islam is acknowledged. The chapter asserts that this conspicuous institutional reorganisation and ideological change since the end of the war with Iraq are the upshots of the reconfiguration of the class basis of the state, which is internally related to the process of neoliberalisation.

in Capitalism in contemporary Iran
Kayhan Valadbaygi

This chapter delves into the process of neoliberalisation in the aftermath of the Iran–Iraq war, arguing that it should be seen as part of the response to the 1970s’ global crisis of overaccumulation that affected the Global South through the debt crisis arising from ISI in the 1980s. In Iran, the revolution and the war with Iraq further aggravated the crisis associated with ISI. Some members of the ruling class viewed neoliberal policies as an alternative developmental strategy that would generate economic growth and mitigate external pressures, leading to the first phase of neoliberalisation (1989–2005) and the emergence of an internationally oriented capital fraction. In line with the EOI, this wing of power has viewed integration into GVCs of Western capital as a guarantor of its long-term existence. The chapter further shows that the transfer of the shares of many large government-owned enterprises to the military forces and the revolutionary foundations during the second phase of neoliberalisation (2005–2013) led to the emergence of the military–bonyad complex out of the bonyad–bazaar nexus. This fraction has hindered the entrance of Western capital under the name of ‘economic resistance’ and ‘self-reliance’. The chapter substantiates that while the uneven development of capitalism, the movement of international capital and the international rivalries between the United States and China/Russia have drastically influenced Iranian restructuring, the struggles of these class forces have equally shaped the process. It concludes that the amalgamation of the ISI and EOI strategies has generated a particular form of hybrid neoliberalism in Iran.

in Capitalism in contemporary Iran
The Iranian nuclear programme, international sanctions and regional policy
Kayhan Valadbaygi

This chapter explores the internal links between the Iranian nuclear programme, international sanctions and regional policy with the processes of neoliberalism in Iran, the Middle East and globally. By situating Iran within the geoeconomic and geopolitical policies of the United States, the European Union, China and Russia since 1990, the chapter shows how these global centres of power have utilised the Iranian nuclear programme and economic sanctions to shape neoliberalism in the region and Iran in two different periods (1990–2007 and 2008–present). Aiming to recover the agency of Iran as a regional power, the chapter also demonstrates the ways in which the different fractions of the Iranian ruling class have pursued different policies regarding the nuclear programme, international sanctions and regional interventions in line with their long-term interests by utilising the dialectic of rivalry and unity of interests between these major capitalist powers. More specifically, the chapter documents that the internationally oriented capital fraction has been bargaining with the West for economic integration into the global political economy through pursuing conciliatory policies regarding the nuclear programme and the Middle East. On the other hand, the chapter reveals that the military–bonyad complex has strategically utilised the nuclear programme, interrelated international sanctions and Iran’s influence in the Middle East to hinder the permeation of Western capital, halt further integration of Iran into the Western-centred world order and push Iran in the orbit of China and Russia.

in Capitalism in contemporary Iran
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Justin O’Connor
in Culture is not an industry
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Emma Barrett

This chapter traces the Bank’s concerns and detailed planning, both in its own capacity and as tasked by the Government, throughout the Stock Exchange reform period. Overwhelming evidence that reforms emanated from the Government and Bank challenge the notion that the Big Bang was the ‘unintended consequence’ of government action and, indeed, the Bank’s official position, designed to carry the market, that reforms were practitioner-led. In the face of change, the Bank’s overriding aim was to maintain a central stock market, controlled and regulated by the authorities. Ensuring the Stock Exchange built and controlled the market’s electronic hardware and software was a means to this end, and guarded against fragmented, unruly markets. Ultimately, prudential regulation was sacrosanct whereas precise trading arrangements and even foreign ownership of firms were not. Control of the central market outweighed later stated objectives of attracting international capital and strengthening London as a world financial centre. Indeed, it was only after reforms had been agreed in principle that the Bank turned its attention to the impact of international capital and foreign competition on the City. An evolving awareness of the likely impact of reforms on British firms, stark choices and interventions to protect British interests show that then, far from embracing international capitalism, the Bank sought to protect national interests, often imperceptibly through the exercise of soft power. In the end, protectionism proved insufficient, but revealing intent challenges the ‘death of gentlemanly capitalism’ thesis which claims the authorities betrayed the City by not protecting it.

in ‘Survival capitalism’ and the Big Bang
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Emma Barrett

This chapter shows how the elite stockbrokers Cazenove responded to the Big Bang deregulation of the financial sector, using social networks and inherited practices to navigate what was an ostensibly technical and modernising revolution. The Thatcher administration’s reform of the London Stock Exchange was an economic enterprise intended to end restrictive practices, open the City to competition and, Survival Capitalism argues, secure the mechanism for selling gilts. On the face of it, a more open meritocratic financial sector marked the ‘death of gentlemanly capitalism’ and coalesced with a political agenda for entrepreneurialism and popular capitalism. Yet this case study shows how Cazenove’s culture drove its strategy, that privilege and hierarchy were sustained by influential cross-sector networks, and that there was resistance to change, even though technological change and new financial instruments were embraced as part of a strategy which mixed innovation with tradition. Essentially, elite networks persisted in the 1980s deregulated economy as established relationships were used to optimum effect and became more important after Big Bang. A more mutually supportive relationship between finance and industry than has hitherto been imagined is also demonstrated. By showing how a modernising revolution was navigated using social networks and traditions, this chapter restores the role of culture to financial history. It contributes to a body of work in twentieth-century British history which challenges the perception that neoliberal ideas were consistently applied under Thatcherism and complicates the notion of a coherent Thatcherite project.

in ‘Survival capitalism’ and the Big Bang
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Emma Barrett

Too often, Britain’s financial revolution has been attributed to the logics of market forces and new technologies. Reforms are deemed to have been inevitable, and often appear faceless. As the concluding chapter reaffirms, Survival Capitalism has sought to restore intent to this history. It has assessed responses to a whole range of factors by a host of actors and institutions as they reacted to threats and opportunities. It has traced an evolutionary process and shone light on the ways in which reforms were crafted by real people and shaped by their concerns and existing historically specific conditions. Accordingly, it has revealed the highly mediated and contingent nature of Thatcherite reforms and the constructed nature of markets – even international financial markets. Although informed by an over-arching philosophical framework, the Thatcher government was, in fact, as flexible and adaptive as the market approach it constructed. Deregulation was motivated by economic nationalism as well as free market ideology. The Government sought to deliver its monetary policy, maintain credibility and fund its reform programme at as low a cost as possible. It also sought to protect British interests and was not averse to intervening in markets when the need arose. Undoubtedly, the short-lived Truss administration applied the wrong lessons from British economic and financial history of the 1980s. As Big Bang 2.0 is an imagined growth strategy for the 2020s, Survival Capitalism is a timely reminder of the need to take seriously the importance of networks and culture when seeking to effect change.

in ‘Survival capitalism’ and the Big Bang
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Justin O’Connor

The "creative industries", Chris Smith's initiative in 1997, gave art and culture a powerful new policy relevance, one that seemed to open the door to political influence and resources. This chapter outlines the policy context for Chris Smith's adoption of creative industries, a folding of art and popular culture into a dynamic new knowledge economy. The creative industries idea was itself a response to a neoliberal critique of public policy for culture which began in the 1970s. The chapter argues that it was an essential part of a new kind of "soft" neoliberalism developed by ex-social democratic parties in the 1990s. The idea was announced at the same moment New Labour abandoned any aspirations to industrial strategy, the tools for which had anyway long been discarded by the Conservatives. Many of the outlying areas barely record any employment, and some have no creative industries employment at all.

in Culture is not an industry
Justin O’Connor

This chapter outlines a rationale for cultural policy as a crucial dimension of individual autonomy and democratic citizenship. It first looks at the household as a centre of cultural consumption and how the cultural infrastructure is crucial to sustaining their participation in culture as collective consumption. The chapter then examines the "hard" cultural infrastructure of the built environment and its utility "pipes", followed by the "soft" cultural infrastructure. It suggests that these infrastructures sustain the capacity for individual autonomy and freedom essential for any democracy, as well as connecting us to our pasts and opening up spaces for reimagining the future. In When Nothing Works, the FEC introduce the social infrastructure as a crucial third pillar of household liveability, after disposable household income and foundational services.

in Culture is not an industry