JOURNAL OF COMPARATIVE ECONOMICS 22, 195–197 (1996)ARTICLE NO. 0020

THIERRY COVILLE, Ed., The Economy of Islamic Iran: Between State andMarket. Teheran, Iran: Institut Francais de Recherche en Iran, 1994. Distrib-uted by Editions Peeters, B.P. 41, B 3000 Louvain, France. 275 pp.

A nonIslamic scholar approaches this book with several things in mind.One is the late Shah’s program to modernize an essentially medieval economyand society along Western lines. Another is the 1979 Revolution by thefollowers of Imam Khomeini and the rise of Islamic fundamentalism. Stillanother is the variety of interpretations given the Qur’an and Shari’a (thecombination of the Qur’an and the Sunna, a collection of the Prophet’s utter-ances constituting a commentary on God’s revelation), as Iranian economists,some trained in the United States, and others have attempted to fashion abody of economic thought and, more important, a religiously correct economicsystem.

In addition, while in Iran economics is taught as a separate academicdiscipline, since the Revolution economic policy-making has been Islam-icized. It is my understanding that there has been some attempt to Islamicizethe teaching of economics, but that this has had no success; the post-revolu-tionary teaching of economics has become, if anything, significantly moreAmericanized. But in matters of economic policy, noneconomic categoriesand considerations predominate along with a cosmic view in which there isno separation between spiritual and temporal realms. Fundamentalist Islamis exceedingly medieval in its almost exclusive emphasis on the superimposi-tion on all aspects of life of a system of ethics believed to be derived fromthe Qur’an. Extensive guidelines are provided for the conduct of economicaffairs, and religion and religious practice are deemed more important thanday-to-day economic activities. Market activity is neither categorically re-jected nor trivialized; since the Prophet Muhammad lived in a commercialsociety and himself engaged in commercial exchange, production for marketand trade are both pictured in the Qur’an as noble practices and merchants arefavorably portrayed. Some Iranians of an Islamic fundamentalist persuasionbelieve that there is no, or no substantial, independent science of economics,only an administrative discipline applying theology to economic practice. Forthem, economics is basically, so far as policy is concerned, a body of prescrip-tive theory of economic order, rather like medieval Scholastic thought. Ofcourse, the Qur’an and other documents are subject to multiple interpretation,

0147-5967/96 $18.00Copyright q 1996 by Academic Press, Inc.All rights of reproduction in any form reserved.

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some more and some less permissive of cultural change, including Westerniza-tion. A disjunction therefore seems to exist between the teaching and thepolicy of economics.

Now comes this volume, ‘‘The Economy of Islamic Iran: Between Stateand Market,’’ which presents a rather different perspective on developmentsin Iran; Iran, contrary to Islamic fundamentalism, is and should be moderniz-ing along Western lines, or at least in a Western direction. Instead of apredominant tension between the ostensibly religious and the secular, thisbook posits the rise of a tension between market and state. What is missinghere, however, is any consideration of the tension between the religious andthe secular, although this book represents something of a counteroffensiveby academic economists against Islamicized economic policy.

The book is divided into two sections, following an introduction by theeditor, the first on the crisis of the Iranian economy and the second on thepolitics of economic liberalization. The five chapters of the first section displaythe parlous condition of the country. Mohammad-Ali Khatib explores thesituation before the revolution and Ali Rashidi the character and results ofdeprivatization after the Revolution of 1979. Patrick Clawson discusses theimpact of the military on the economy; Sohrab Behdad discusses restructuriza-tion and deindustrialization, notably greater urban self-employment and ruralpeasantization; and Firouzeh Khalatbari discusses the underground economy.

The first chapter of the second section, by Massoud Karshenas and M.Hashem Pesaran, may be the best in the book. It is on exchange rate policiesin the context of the Iranian mixed economy, with pregnant discussions ofthe problems and nuances of combining markets and planning. This isfollowed by a second contribution by Firouzeh Khalatbari, on the Tehranstock exchange as a mode of privatization. Thierry Coville writes on therole of the central bank in political liberalization; Morad Pourfathi writeson the water utility; and Kamal Athari writes on the housing sector amidstthe market and planning.

The key question is whether this collection is to be taken as a conventionalWestern-style set of economic policy assessments of how Iran came to itspresent condition and how it may transcend it. If so, then the book is conven-tionally useful as policy analysis. But the book may also have a second use,indeed, a different social role; the collection may represent something of ascholarly political manifesto calling for economic liberalization, meaning, inone way or another, Westernization.

Some of the contributors live and work abroad; others work in Iran atmajor institutions. Are these writers swimming against the Islamic fundamen-talist tide? Will the careers, if not the freedom or lives, of those working insideIran be in jeopardy? From a world-historic perspective, is the Revolution amajor counter-Enlightenment and anti-West development? or is it a more or

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less transient phenomenon? a temporary reaction to modernization led byreligious fundamentalists for their own interests? Whatever the eventual an-swer to the last question, the responses to the second will be of immediatepersonal interest to the contributors.

WARREN J. SAMUELS1

Michigan State UniversityEast Lansing, Michigan 48824

1 Zohreh Emami and Sohrab Behdad provided helpful suggestions for the preparation of thisreview.

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