Note: Almost in the early years following the victory of the Islamic Revolution, the Founder of the Islamic Republic established revolutionary economic institutions such as the Imam Khomeini Relief Committee, the Foundation of the Oppressed and Disabled Veterans, the Executive Headquarters of Imam’s Directive, and several other institutions. But have these economic institutions been able to assist Iran’s economy, or have they merely added further problems to its existing ones? Dr. Seyyed Hossein Hosseini, an economic researcher, interprets the establishment of these institutions by the great leader of the Revolution as an effort toward the popularization of the Revolution. In his view, while the creation of these institutions brings numerous benefits, it can also have drawbacks, both of which he addresses in this interview. The full text of the exclusive interview of Contemporary Jurisprudence with the researcher at the Think Tank for Government and Economic System-Building is as follows:
Contemporary Jurisprudence: What is the functional role of the Islamic government in the popularization of the economy?
Hosseini: In my opinion, the functional role of the government consists of the following:
- Development and expansion of small and medium-sized economic enterprises;
These institutions can help improve the efficiency of these enterprises and strengthen the role of the people in the economy by providing facilities, technical consultations, training, and support for innovation. - People’s participation in economic decision-making;
Revolutionary economic institutions can benefit from the role of the people in economic planning by creating councils, general assemblies, or democratic consultative systems. - Creation of social welfare and security institutions;
These institutions can provide economic security for the people and reduce class disparities by supplying health, educational, and housing services as well as support during crises. - Justice in the distribution of resources;
These institutions can improve the equitable allocation of resources through new financial systems and prevent the accumulation of wealth in the hands of specific groups. - Support for the people’s economy;
This type of economy is based on broad public participation in economic activities and includes activities such as cooperative agriculture, social entrepreneurship, and local production. Revolutionary economic institutions can empower people economically and simultaneously strengthen independence and economic self-sufficiency in local communities by creating conditions for the development of this type of economy. - Resistance against economic centralization;
Another important objective of revolutionary economic institutions is the fight against economic centralization. In many traditional economic systems, the concentration of power and economic resources in the hands of specific groups causes inequality and corruption. Revolutionary institutions can effectively prevent economic centralization by promoting decentralized policies, including better distribution of resources and authorities, and this helps promote justice and the popularization of the economy.
Contemporary Jurisprudence: Can the establishment of nearly eight people-oriented economic institutions by the Founder of the Revolution—such as the Imam Khomeini Relief Committee, the 15th of Khordad Foundation, the Executive Headquarters of Imam’s Directive, the Foundation of the Oppressed and Disabled Veterans—be interpreted as the effort of a faqih toward the popularization of the economy, or do other reasons exist?
Hosseini: The establishment of people-oriented economic institutions such as the Imam Khomeini Relief Committee (ra), the 15th of Khordad Foundation, the Executive Headquarters of Imam’s Directive, the Foundation of the Oppressed and Disabled Veterans, and other similar institutions by the Founder of the Islamic Revolution, His Holiness Imam Ruhollah Musavi Khomeini (ra), can certainly be interpreted within the framework of an effort toward the popularization of the economy; however, these actions simultaneously have other reasons and dimensions related to the political, social, cultural, and even security objectives of the Islamic Revolution. Here we attempt to examine both dimensions of the issue.
- Effort toward the popularization of the economy
One of the main reasons for establishing these institutions was the effort to popularize the economy in Iran after the Islamic Revolution. Before the Revolution, Iran’s economy was highly centralized and under the control of the monarchical government, and vast class disparities existed among different strata of society. Most of the country’s economic resources were in the hands of institutions affiliated with the royal regime or large foreign entities, and the weaker strata of society were deprived of benefiting from the country’s natural and economic resources.
After the victory of the Revolution, Imam Khomeini (ra) particularly emphasized the creation of institutions whose objectives included a more equitable distribution of resources, assistance to the weak strata, and empowerment of the people in managing the country’s economic affairs. These institutions directly helped the people to participate in various economic arenas; for example:
The Imam Khomeini Relief Committee was established with the aim of helping the deprived and needy. This institution not only provided financial and welfare assistance to headless families, orphans, and the deprived but also worked toward empowering poor individuals for employment and self-sufficiency.
The Foundation of the Oppressed and Disabled Veterans was intended to provide livelihood and create economic opportunities for disabled veterans, martyrs’ families, and the oppressed.
The Executive Headquarters of Imam’s Directive, by prioritizing job creation and support for domestic production in various economic sectors, helped create small businesses and develop different economic sectors.
These institutions collectively contributed to realizing the objectives of popularization in Iran’s economy and sought to give the people a greater role in the processes of production, distribution, and consumption of the country’s resources. - Political and revolutionary reasons
Although the primary goal of establishing these institutions was to improve the economic and social conditions of the people, political and revolutionary reasons also played a role in Imam Khomeini’s (ra) decision to create them. Especially after the victory of the Islamic Revolution and in conditions where the Revolution was still consolidating power and establishing itself against internal and external pressures, institutions such as the Foundation of the Oppressed and the Relief Committee not only operated in the economic sphere but also served as tools to strengthen internal cohesion and support the people against problems arising from sanctions and threats.
Politically, these institutions could have greater operational independence than the central government and make the Islamic system more resilient against foreign economic and military threats. Especially during the imposed war and economic blockade, these institutions played a vital role in meeting the basic needs of the people and the fronts. - Replacement for the corrupt institutions of the Pahlavi regime
The new economic institutions established by Imam Khomeini (ra) in many cases served as replacements for the corrupt institutions that operated under the Shah’s regime before the Revolution. Much of Iran’s economic resources and national wealth were under the control of institutions such as foreign oil companies, the Pahlavi Foundation, and court-affiliated charitable organizations, whose role was largely limited to benefiting specific groups and the monarchy.
Imam Khomeini (ra), by establishing institutions such as the Foundation of the Oppressed and the Relief Committee, sought to direct public wealth toward serving the deprived and oppressed segments of society and to prevent encroachment by individuals seeking to monopolize resources. - Creation of alternative structures for social welfare
Another reason for creating people-oriented economic institutions was to provide a network of social support that was used, especially during the war and afterward, as an alternative to governmental social welfare and security systems. These institutions, in cooperation with the government, mobilized financial and human resources to meet the basic and essential needs of the people and in a way reduced the people’s dependence on previous (often inefficient) social welfare systems. - Attention to the principles of Islamic economics
Alongside these objectives, the establishment of these institutions can also be interpreted within the framework of the principles of Islamic economics. Islamic economics places great emphasis on social justice, aiding the poor, and equitable distribution of resources. Imam Khomeini (ra), as an Islamic faqih and mujtahid, knew that one of the important goals of the Islamic government is to create conditions for the realization of these principles in the economic sphere.
Contemporary Jurisprudence: Is the governmentalization of people-oriented economic institutions—such as “the obligation to pay khums to the Wali al-Faqih,” “efforts to consolidate sadaqat in the Imam Khomeini Relief Committee,” the creation of various governmental headquarters for collecting vows, fitrah, zakat, etc.—in line with the popularization of the economy or in opposition to it?
Hosseini: To answer this question, I will address each component separately:
- The obligation to pay khums to the Wali al-Faqih:
Paying khums to the Wali al-Faqih within the framework of Islamic economics can be in line with the popularization of the economy, because its purpose is to provide resources for the poor and public projects. In fact, from a jurisprudential perspective, this action serves as a tool for a more equitable distribution of wealth and support for the oppressed, which ultimately leads to reducing class disparities and increasing public participation in economic development. However, in practice this policy may face challenges that limit its impact on the popularization of the economy; for example, the centralization of resources and reliance on governmental structures for collecting and distributing khums may create complex bureaucracies that sometimes reduce their effectiveness in popularization. - Consolidation of sadaqat in the Imam Khomeini Relief Committee
Here too, it depends on the manner of administration and performance of the Relief Committee. If this institution operates correctly and toward strengthening individuals’ economic independence and empowering the people, it can be in the direction of popularizing the economy; for example, in addition to distributing cash aid, the Relief Committee can engage in vocational training, support for small businesses, and job-creation projects to free individuals from dependence on ongoing assistance. But if, instead of helping people achieve self-sufficiency, this institution only distributes temporary financial aid, it may indirectly foster dependence on the government and reduce public participation in economic processes. - Creation of governmental headquarters for collecting vows, fitrah, and zakat
Collecting these resources by governmental institutions can, if placed within a framework of clear objectives and precise oversight, help strengthen the foundations of the people’s economy. This aid can be used in job-creation projects, provision of health and educational services, or assistance to the oppressed and deprived regions. Therefore, it appears that within this framework, these actions can contribute to the popularization of the economy. But if oversight and transparency are absent in this process, these resources may, instead of serving the people and improving their economic situation, be used to preserve governmental structures and increase power centralization. In such conditions, these actions can become the opposite of popularizing the economy, because governmental control over people’s resources increases and the people’s role in decision-making and resource allocation becomes limited.
Challenges of governmentalizing people-oriented economic institutions
Although it appears that the creation of governmental institutions for collecting religious resources such as khums, zakat, fitrah, and sadaqat is primarily aimed at a more equitable distribution of resources and assistance to the oppressed, in practice some challenges and problems may arise that practically prevent the full realization of the popularization of the economy:
- Centralization of power and resources: If the government takes complete control of economic processes, financial and economic resources may be removed from the people’s hands and come under bureaucratic control.
- Dependence on governmental aid: If people become reliant on governmental institutions for receiving financial assistance, their economic independence may be harmed.
- Lack of transparency and oversight: If governmental institutions cannot effectively manage resources or act transparently in their allocation to the needy, it can lead to increased economic inefficiency and financial abuses.
Contemporary Jurisprudence: What has been the experience of other countries and economic systems regarding the popularization of the economy? Institution-building and agency, or merely a headquarters role?
Hosseini: The popularization of the economy has yielded different results in each country. Here I present the fate of the economy in some of the most important countries that have pursued this policy:
Cooperative economies in Scandinavian countries (such as Sweden and Denmark)
In Scandinavian countries, there is significant emphasis on creating cooperatives and people-oriented institutions. These institutions are usually managed by the people themselves and play a considerable role in meeting economic and social needs. In this model, the government helps strengthen people-oriented institutions through supportive policies such as granting loans or financial incentives, but decision-making and management are largely in the hands of the people and members of these institutions.
- Participatory economies in Germany (“Social Germany” model or the “tripartite” model)
In Germany, one of the most prominent examples is the “Social Germany” model, in which representatives of workers, employers, and the government jointly participate in economic decision-making. This participation at various levels, including industrial sectors and social welfare, enables the people to have a role in economic processes. This model emphasizes institution-building and public participation rather than the government merely playing a headquarters role. - Social and cooperative economies in South Korea
In South Korea, the government supports the creation and strengthening of social and cooperative institutions, especially in agriculture and services. These institutions play a prominent role particularly in rural areas, and the people participate in the processes of production and distribution of goods and services. Here the government plays a supportive and facilitating role so that these people-oriented institutions can operate more efficiently and independently. - People-based economic institution-building models in India
In India, there are various experiences of people-based economic institution-building; for example, in agriculture and irrigation, numerous people-oriented institutions such as self-help groups (SHGs) and agricultural cooperatives exist that are managed independently, and in many cases the government is present only in the form of consultation or technical assistance. These institutions enable farmers and local communities to solve their problems without dependence on the government. - Social economy and people-oriented institutions in Spain (union model)
In Spain, particularly in the Basque region, successful models of cooperatives and workers’ unions exist in which individuals directly participate in production and distribution processes. One of the most famous of these cooperatives is the Mondragon Group, in which workers are both owners and managers of their companies. In this model, the government’s role is more supportive and facilitative rather than headquarters-oriented. - Social economy model in Cuba
Cuba, despite its state economy, has in recent years made efforts to strengthen people-oriented and non-governmental institutions. Especially in agriculture and services, the Cuban government has allowed cooperative institutions and local groups to participate in decision-making and economic processes. Here the aim has been to strengthen self-sufficiency and people’s independence in economic affairs.
Contemporary Jurisprudence: In general, what do you consider the advantages and disadvantages of creating revolutionary economic institutions?
Hosseini: The following can be mentioned as advantages of creating revolutionary economic institutions:
- Acceleration of social and economic transformations
Revolutionary economic institutions may create rapid and fundamental changes in economic and social structures. These institutions can provide opportunities for reconstruction and major reforms, especially in countries facing structural problems and deep inequalities. - Reduction of dependence on previous economic systems
One of the advantages of revolutionary institutions can be breaking dependence on previous economic systems that may have operated in favor of a minority of society and prevented a more equitable distribution of resources. These institutions can help create a new and independent economic system. - Development of people-oriented institutions and social participation
In many revolutions, revolutionary economic institutions help strengthen people-oriented institutions, self-sufficiency, and social participation. This can lead to increased social solidarity and the strengthening of democracy at local and national levels. - Fight against corruption and rent-seeking
Revolutionary economic institutions can serve as tools to combat corruption and rent-seeking in old economic structures. By focusing on social justice and transparency, they can help reduce corruption and achieve a fairer distribution of resources. - Building trust among the people
Creating economic institutions aimed at public welfare and national independence can gain the people’s trust and make them more participatory and active in economic processes. This may lead to sustainable economic growth and improved quality of life.
The disadvantages of creating revolutionary economic institutions are:
- Centralization of power in the hands of governmental institutions
One of the greatest disadvantages of revolutionary economic institutions is that they may unintentionally turn into centralized governmental and ideological structures. This can lead to reduced public and democratic participation in economic processes and ultimately to the formation of authoritarian regimes. - Inefficiency and structural complexity
Revolutionary economic institutions under the supervision of the government or specific groups may become inefficient due to lack of experience or weakness in management. If these institutions cannot effectively manage resources, they may lead to economic crises, stagnation, and public dissatisfaction. - Resistance and instability
Creating revolutionary economic institutions may face strong resistance from powerful groups, large companies, or even specific strata of society. Such resistance can cause political and economic instability in the country, especially if changes are implemented suddenly and without sufficient support. - Likelihood of failure to achieve objectives
In many cases, revolutionary economic institutions, due to lack of precision in planning and improper implementation, may fail to fully achieve their goals. These institutions may face problems such as resource shortages, internal corruption, or ideological disputes that ultimately cause their failure or reduced efficiency. - Monopoly and lack of competition
In some cases, revolutionary economic institutions can lead to monopolization and reduced competition in markets. If these institutions are fully under the control of a specific group or the government, they may create a closed economic environment that harms innovation and economic growth. - Reduction of individual incentives and initiative
Centrally managed economic institutions from the top may indirectly reduce individual incentives. In such systems, individuals may, instead of competing and innovating, seek to secure personal interests through governmental or revolutionary systems, which can hinder real growth and progress.