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To begin with, the rich and powerful who characterize Ahmadinejad's social spending as "handouts" are not very consistent in their calls for the curtailment or abolition of government subsidies. Following the 1979 revolution and the war economy of the 1980-88 period, the government subsidized many consumer items that benefited all citizens regardless of their income levels! Although some modifications have been made over the years, many such blanket, or "class-neutral," subsidies remain in effect to this day. These include subsidies for a number of food items, especially bread, as well as sources of energy or fuel, both home-heating and motor vehicle fuels. This means that the wealthy buy such subsidized items at the same prices as do the needy!
Furthermore, because the affluent consume relatively more of the subsidized goods and services, they end up benefiting disproportionately more from government subsidies than the grassroots. "Gasoline subsidies are an example where the rich benefit most because they tend to have bigger, gas-guzzling vehicles, while the poor may not even be able to afford a small car. . . . "Currently, subsidies are not useful and have the reverse effect of what was intended,' he [Ahmadinejad] said in comments carried by the official newspaper Iran, adding that 70 percent of subsidy spending ended up with the country's richest 30 percent" [9].
President Ahmadinejad has been trying hard to bring an end to the insanity of subsidizing the wealthy. "Rationalization of subsidies" (bahineh kardan-e subsidha), as Ahmadinejad has frequently explained, means eliminating price subsidies altogether, and then having the government use the financial resources thus saved for direct assistance to the needy--similar to the use of food stamps or cash payments to the needy in the United States. Not only is this a more sensible system of subsidizing the needy, it will also save the government money because the funds saved by virtue of cutting blanket price subsidies is much more than direct subsidies to the needy, according to both the Ahmadinejad administration and independent financial experts. Ahmadinejad's efforts to alter a perverse subsidy system, however, have so far been successfully blocked by the powerful interests who oppose them, by the hypocritical forces who label assistance to the needy "handouts" but are unwilling to give up their own subsidies.
Secondly, and more importantly, it is sheer cynicism to characterize social spending and assistance to the needy as "handouts." While social expenditures include some cash disbursements to the needy, the major bulk of those expenditures can be more appropriately called investment in public capital formation. These include both human capital, such as health and education, and physical capital, such as mass transit, communications systems, transportation networks, dams, and the like.
Thanks to government support there is now guarantee of medical care regardless of the ability to pay. Rural areas have gained electricity, paved roads, running (piped) water, crop insurance, insurance against natural disasters, and access to health and education services. Of course, Ahmadinejad does not get all the credit for these services because most of them came to existence by virtue of the 1979 revolution. He does, however, get credit for expanding and reinforcing them, as they were largely neglected by the previous two administrations, headed by Presidents Khatami and Rafsanjani.
During my recent trip to Iran (mid-March to early May), as I traveled to the countryside, including tribal communities, I learned that the government has in recent years boosted health insurance programs for both farming and tribal communities. Each village now has a full-time nurse, and every cluster of villages has a medical clinic that is built or housed in a centrally-located village. I also learned that family planning and the use of contraceptives are vigorously encouraged by government-sponsored health experts in the countryside.
Government spending on public health has paid off handsomely: according to World Bank statistics, in the three decades since the 1979 revolution, life expectancy in Iran has moved up from 59 to 71; child mortality at birth has gone down from 95 to below 30 per thousand; immunization rate (for Measles and DPT) has gone up from below 40% to 99%; and the average family size has shrunken from nine to four, which of course means the birth rate has gone down from seven to two.
The government also provides free education up to and including the college level for public schools and universities. (Private education institutions, which are quite expensive, do not get public assistance.) Even the children of tribal communities who travel with their live stock along the grazing routes now have access to free education. This is made possible by having (mobile) teachers travel with tribal communities. I have met a number of these teachers during my visits to Iran. One of them is a nephew of mine, who told me that one small tribe had only three school-age kids. Nonetheless, the education authorities of the region had assigned a teacher to the tribe to teach their children. Not surprisingly, according to World Bank statistics, literacy rate in Iran has during the past two decades moved up from 63% to slightly over 80%.
Although women are required to comply with the official dress code, they are encouraged (by both their families and the government) to excel in educational and professional pursuits. The results have been quite impressive. Women now constitute the majority of university students. They are doctors, engineers, teachers, scientists, writers, artists, salespersons, and even taxi drivers. More and more women are joining the workforce, despite the very high level of unemployment, which is largely due to criminal economic sanctions and military threats from abroad.
Characterizing social spending and government assistance to the needy as "handouts" is both cynical and elitist. It is also a disingenuous argument designed to camouflage the pro-capital biases of big-business interests. Proponents of economic liberalism have always used this snobbish argument to cut social spending in order to keep taxes low on the affluent, and deny the poor and working classes a decent degree of living conditions.
Not only is this selfish attitude of the wealthy unfair to those who suffer from the woes and vagaries of an unregulated capitalist economy, it is also short-sighted and counterproductive in terms of their own long-term interests. Instead of viewing social spending on infrastructure as a long-term investment that will help sustain and promote economic vitality, they view it as a burden, or overhead, that must be cut as much as possible. By focusing on the current, short-term balance sheets, they seem to be oblivious to the indirect, long-term returns to social spending. Evidence shows, however, that neglect of public capital formation can undermine long-term health, prosperity and productivity of a people.
Fighting corruption and trying to curtail or retrieve what he calls the "unearned" incomes of the corrupt establishment was one of the major agenda items of Ahmadinejad's presidential campaign. Not only did this frighten the nouveau riche, but also many of the religious authorities who are not necessarily wealthy but whose comfortable positions of prestige and stature would be threatened by Ahmadinejad's efforts to whittle down what he has called redundant bureaucracies. The elite had had enough.
Frightened by Ahmadinejad's crusade-like commitment to fight corruption, waste and costly privileges, champions of economic liberalism poured money into Mousavi's election campaign to unseat him. The presidential election of last June was their last stand against their clearly populist nemesis, Mahmoud Ahmadinejad. (It is regrettable, as well as ironic, that while Ahmadinejad and his co-thinkers are at loggerheads with major segments of the clerical establishment, most of the Iranian opposition abroad fail to make any distinction between the two forces. Instead, in a largely emotional approach, they tend to lump all factions of Iran's ruling circles together as a cohesive or monolithic body that pursues the same political or policy agenda.)
4. Mousavi and His Reform Agenda
The Opposition promoted Mousavi as the reform candidate. In his campaign speeches he frequently complained that Ahmadinejad's administration was obstructing progress because it resisted reform toward an "efficient" market system. What was his reform agenda?
Although Mousavi never really spelled out his much-celebrated economic reform agenda, the very little that he sparingly and vaguely revealed during the campaign season shows that it was essentially a capital-friendly reform scheme fashioned after the laissez-faire model of economics--often sugar-coated in obfuscationist market terminology such as market efficiency, entrepreneurial ingenuity, meritocracy, and the like. (This economic philosophy is interchangeably or synonymously called neoliberal, neoclassical, trickledown, or supply-side economics; it is also called economic, or classical, liberalism.)
