Protest in the Political Economy of Qajar Iran

The Kiani Crown of the Qajar Shahs
The Kiani Crown of the Qajar Shahs

To historians such as Ervand Abrahamian, and certainly in comparison to regimes in power elsewhere in the nineteenth century, the Qajars seemed to be ‘despots without the tools of despotism’. The arbitrary power of the Qajar monarchy – in an abstract sense – is indeed rather perplexing. Some ask how the Qajars maintained their grip on Iranian politics; others ask how Iran remained a coherent and independent sovereign state at all. They key to the success – in the sense that Iran did indeed remain independent and intact – of Qajar Iran was a socioeconomic ‘pact’, as termed by Vanessa Martin, which governed the dynamic of Iranian politics. Such a consensus consisted of a bargaining system, by which actors would systematically negotiate with each other in order to get what they wanted/needed out of society and the economy. This was a unique form of political economy, mainly because of the continued rule of the Qajar dynasty above various, seemingly stronger social actors; however, it explains the dynamic that emerged towards the end of the nineteenth century and the process of events such as the Constitutional Revolution in the early twentieth century.

Islam and Society

The Islamic social background to Qajar Iran is important to understanding the unique status of the monarchy in relation to the religious community and other societal actors. The Shi’ite belief in the messianic Twelfth Imam, Mahdi, and that his return with Isa – Jesus Christ – would bring judgement to humanity, granted political rulers in Iran only nominal power in the eyes of the ulema. It also meant that the Qajar monarchy drew their legitimacy form the religious community, and thus a relative mutual respect for each other’s power developed over time. This confused the political power relationship from the outset, as it was uncertain to most who actually held power: the theological prowess of the ulema or the political despotism of the Qajar Shah. There was certainly confusion over the material manifestations of this power as well, seeing as neither actor had an army or any obvious means of dictating society by force.

Islam also affected Iranian political society in another way, through the institutionalised Shari’a law. The social dynamics of the legal system gave certain actors particular duties and responsibilities, such as the ulema in mediating commercial issues, thus contributing further to the idea of an unwritten social ‘pact’ that governed the political dynamic. Notions of Islamic finance also filtered through into society. Petty capital lenders and particular types of merchant were scorned due to the Shari’a principles of forbidding the charging of direct interest on loans, thus preventing the commodification of time which had dictated the economic development of most Western societies. Hence, even social order and economic power relationships were determined by religious concepts.

Thus, in effect, the typical responsibilities of the modern state were catered for and determined by society itself. Education – which was dominated by the ulema – healthcare, the regulation of commerce, and the provision of social welfare were accounted for by private actors. A libertarian’s dream, as such, and indeed Qajar society could be considered a relatively successful manifestation of liberal/libertarian socioeconomic principles – i.e. social responsibility rather than state dictation etc. This dynamic was, too, part of the ‘pact’ that rendered the role of the state in society almost obsolete. In effect, the state did not provide for its people and the people did not expect it to. Thus, one can begin to form a picture of the Qajar monarchy as an institution with arbitrary power backing a paradoxically weak state that held little or no control over society. The monarchy effectively relied on prestige and not material forms of power. This allowed  external forces, namely the neo-imperialist tendencies of Britain and Russia, to penetrate this system of power and establish their own political and economic influence, given the inability of the Qajar state to actually do anything.

The Political Economy of the Bazaar

But how did the libertarianism of Qajar Iran actually work on the ground? The political economy of the Iranian city in the nineteenth century is a fascinating subject; Martin describes it as a genuine example of economic liberalism, given the lack of state involvement in market regulation. The market itself existed as a physical phenomenon too, in the form of the bazaar, home of the merchant class, which formed the nucleus of Iranian urban life. Bazaars contained granaries and food production centres, workshops and guilds, schools and mosques, basic forms of banks etc.; every institution required for the maintenance Iranian society. Their dynamic was governed, not by an overseeing body or regulatory statute, but by each actor’s own diplomacy skills. Disputes would be solved, and organisational procedure altered, by means of negotiation and barter; this process would include the merchants themselves, the religious community, state officials – whose role was usually to prevent dissent against the monarchy – and others such as guild workers. This organisational method generally kept each actor happy, as everyone negotiated openly and honestly, to maintain their interests in such a liberal arena. The system also precipitated the use of political tools such as protest in the negotiation of macro level policies too. It was only when the state began to attempt to intervene in the system, along with international forces, that the dynamic of the socioeconomic pact became compromised.

Protest as Negotiation

As the Qajar monarchy began to intervene the economy, mainly with the intention of saving their own skin rather than aiding their subjects, a certain economic nationalism took hold of Qajar society – certainly among the merchant classes and ulema. The ‘nationalist’ movement was not so much directed at international forces as it was directed at any intervention in the socio-political dynamic outlined above. The anti-interventionist stance is indicative of the modern neoclassical economic approach to state involvement – i.e. that state intervention is only detrimental to economic development – and perhaps when the state was the Qajar monarchy, the neoclassicists have a point. The merchants especially took umbrage at the attempts by the Qajar government to manipulate the bazaar dynamic, displaying the lack of legitimacy wielded by the monarchy in their own country. Thus, the bazaaris transplanted their methods of political negotiation, in the form of mass protests, onto a national landscape, rising up on various occasional against Qajar government policy.

The first example of this was in 1872 in opposition to the granting of a concession to Anglo-German businessman Baron Julius De Reuter. The contract granted Reuter exclusive rights to develop just about every infrastructural technology known to man at the time, potentially removing significant amounts of economic sovereignty from the bazaars and placing it in the corrupt hands of an Anglo-Qajar coalition. This intervention from above was unacceptable to the merchant classes, who opposed the concession in the form of protest. Their discontent was supported by Russian agents who were keen to prevent British capital from gaining a foothold in the Iranian economy. The Qajar monarchy were thus forced to cancel the concession less than a year after it granted, setting back European interests in the Iranian economy by several years

There was minor opposition to further government intervention over the following 15 years, including discontent towards another contract granted to the Reuter dynasty to set up a British-funded bank. The bank began to undercut credit and interest rates provided by local merchants, facilitated in part by exemption from Islamic financial principles. The discontent grew into a  frenzy of mass protest, however, upon the granting of a concession to the British in 1890 for the ‘exclusive right to farm, produce and sell tobacco-based products’. This concession sparked more discontent than others because it affected an industry that was already occupied by Iranian farmers and merchants. It effectively threw private Iranian actors out of the tobacco industry, nationalising it for the British. In contemporary comparison, it is almost impossible to imagine an equivalent concession; no government would have the audacity to undermine its own subjects to such an extent. In fact, the events subsequent to the granting of the concession proved that Qajar audacity was based on nothing. The mass protest that ensued forced the monarchy to cancel the concession, repeating the events of 1872. The episode firmly established protest as a ‘legitimate’ or accepted method of bargaining in Qajar politics, and thus precipitated its use in movements such as the Constitutional and 1979 Revolutions.


Such economic nationalism, excluding the arbitrary power of the Qajar monarchy, had developed out of respect for the power dynamic of the ‘pact’ between the various socio-political actors in Iranian society. This ‘pact’ had come to define the nature of Qajar Iran and it became more and more apparent that interference with it was not acceptable to the groups that relied upon it for a voice in Iranian politics and economics. An ideology against Western intervention was fostered by Iranian born pan-Islamist Jamal al-Din al-Afghani, who advocated political movement against arbitrary governmental and Western influence in Islamic society.


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