United States Institute of Peace

The Iran Primer

The Bazaar

Kevan Harris
  • Iranian bazaars, especially Tehran’s Grand Bazaar, have played central roles in the economic and political history of the country. “Bazaari” is a term applied to Iran’s heterogeneous commercial class located in historical urban centers.
  • Bazaaris have often allied with other social groups, including the clergy, in anti-government protests when their grievances have overlapped.
  • Under the monarchy, the bazaar prospered as an institution because of state neglect. But under the Islamic Republic, individual bazaaris were given key positions of power.
  • Bazaaris have adapted to the new constraints that a state-dominated economy have created and the opportunities that a global economy has provided.
  • There is no such thing as a single “bazaari mentality,” since bazaars reflect and respond to the political and economic developments of contemporary Iran.
          Bazaars in Iran are more than local markets for the truck and barter of traditional goods and handicrafts. They are urban marketplaces where national and international trade is conducted, political news and gossip is shared, religious and national symbols are on display and various social classes mingle. Iran’s largest bazaar, located in central Tehran, has been central to the country’s economic and political history since the late 19th century, most notably as a major force in the 1979 revolution.
          The bazaar has long occupied the imagination of intellectuals, politicians, and travelers inside and outside Iran. For many, its customs and attitudes represent the traditional qualities of the nation’s culture. One frequently hears the need to understand “the bazaar mentality” in analyses of Iranian statecraft and foreign policy. In reality, however, bazaars in Iran have continually changed with the times.
          Under the reign of Mohammad Reza Shah Pahlavi, bazaars benefited from a long period of economic growth, but they were also alienated by the monarchy’s rapid modernization agenda. After the 1979 revolution, some supporters of the Khomeini regime from the bazaar were given more control over commerce and trade, but increased state management of the economy and an unpredictable environment did not benefit the bazaar as a whole. The links between Iranian bazaars and the international economy are densely connected, as smuggling through the United Arab Emirates and other Middle East entrepôts (trading posts) created major routes to supply domestic consumers with cheap East Asian goods. As urban areas have grown, commercial shopping areas well beyond the downtown bazaar have emerged to meet the desires of Iran’s new middle classes. Instead of being a bastion of tradition that represents an ancient way of life, the bazaar in contemporary times is remarkably different than in previous periods of Iranian history.
Bazaar history
          Like the Athenian agora, the Arabic souk, or European fairs of trade, the Persian bazaar is central in understanding the development of political dynasties and economic enterprise in the areas where they are embedded in daily life. Notable pre-Islamic bazaars appeared in Bukhara and Khuzestan, and bazaar layouts adapted urban innovations from Roman and Byzantine cities. 
          After the advent of Islam, bazaars from Samarkand and Kabul, to Isfahan and Baghdad, bordered the main thoroughfares of trade-linked Central Asian cities, usually located near ruling palaces or citadels and the largest Friday mosques. In fact, Friday became the day of congregational prayer in Islam because it was the day when merchants and townspeople would assemble in a weekly bazaar in the Arabian Peninsula.
          As sites where merchant families accumulated wealth, prestige and power, by being situated at the major nodes of regional and global trade routes, bazaars also became central locales of political organization in supporting or opposing the many rulers of Iran. The concentration of merchants, middlemen and wholesalers in densely packed alleys under covered roofs created a social space where common grievances could quickly coalesce, even between rich merchants, poor workers and diverse ethnicities. 
          The bazaaris of Tabriz and Isfahan who took part in the 1905-1911 Constitutional Revolution became local legends, and many Tehran bazaaris supported Prime Minister Mohammad Mossadegh in his attempt from 1951 to 1953 to nationalize the production of Iranian oil and take it away from foreign control.
The revolution
          The Pahlavi monarchy cared little for bazaars, preferring modern shopping centers and channeling financial support to heavy industry. But the oil-fueled economic growth of the 1960s and 1970s still benefited the bazaar. The shah mostly neglected the 100,000 merchants and workers and 20,000 shops in the Tehran bazaar until 1975, when the state initiated an anti-profiteering campaign and price controls against bazaar stores. 
          Disparate political tendencies of various bazaar merchants soon united against the shah’s government. Bazaaris participated in and supported protests and demonstrations in the spring of 1977, well before most social groups—including the clergy—had joined the revolutionary surge.
Bazaaris and clerics
          Although Bazaaris eventually mobilized through local mosques during the revolution, this temporary partnership did not lead to a permanent bazaar-mosque alliance as the political backbone of the Islamic Republic. During the 1980s war years, the state nationalized major industries, restricted trade and controlled credit. Key bazaari supporters of the Khomeini regime were given high positions in government and rewarded with coveted import licenses. 
         Yet the prolonged turmoil and uncertainty severely hindered the ability to export Iranian goods to lucrative Western markets, or privately engage in long-term planning for the domestic market. As a result, many bazaaris felt detached from their supposed representation—the conservative Motalefeh faction—in government.
          Today, there are indications that many bazaaris, most likely a majority, have been disenchanted with the Islamic Republic’s policies for quite some time. Anecdotal evidence shows that many voted for Mohammad Khatami in 1997 and 2001, and also Mir Hossein Mousavi in 2009. However, compared to students, workers and women, bazaaris have rarely protested in public against the regime, even when other groups took to the streets.
          This seemingly changed in October 2008 and again in July 2010, when bazaars in major Iranian cities closed down in protest over the Ahmadinejad government’s attempts to raise and collect more taxes from bazaar shops. Both protests resulted in the government backing down to the demands of the bazaaris. 
         Yet the absence of bazaari activity during the Green Movement demonstrations of June and July 2009 indicates that broader links between the bazaar as a social entity and democratic social movements in Iran have not developed. This is perhaps because bazaars today seldom exhibit the collective identity and public solidarity that occurred in past moments of Iranian political history. This stems partially from the new cleavages in bazaar networks that resulted from the Islamic Republic’s management of the economy and the picking of politically subservient economic winners. However, it also derives from significant changes in relations between the bazaar and the global economy.
The bazaar and globalization
          Many bazaar merchants are still wealthy, but networks of Iranian commerce and trade have shifted in the past 30 years, reducing the bazaar’s central importance to economic life. Both legal and smuggled imports entered the country through major ports such as Bandar-e Abbas or free trade zones such as the islands of Kish and Qeshm. As East Asian merchandise rose in quality and lowered in price, it easily outsold Iranian-manufactured products inside the country. An expanded and educated Iranian middle class preferred international goods that reflected Western prestige and status, even in knockoff form. A small but growing number of superstores and shopping malls exist in Iran. And increasing urbanization and congestion have meant that fewer wealthy Iranians living far from downtown are willing to travel to the bazaar to make major purchases.
          Bazaaris have accustomed themselves to these new challenges. Many work with fellow Iranians in Dubai, for example, to ship a wide variety of fashionable products to their stores. They maintain necessary contacts with important individuals in government ministries and agencies, in order to acquire goods in a timely manner. The extent of smuggling in Iran is not entirely known. But almost every large government bureaucracy allegedly either looks the other way or has members who are actively engaged in smuggling, including the armed forces and Revolutionary Guards, the religious foundations and supervisory trading bodies. 
          Commercial profits in the bazaar are mostly short-term and precarious. And there is a high incentive to transfer wealth out of the bazaar and into speculation on land and real estate, which many bazaaris have done since the 1980s. While Iran’s urban bazaars may have more employees, stores and goods now, compared to before the revolution, their social role and centrality to the country have diminished.
Romanticizing the bazaar
          European visitors to Iran since the 16th century have identified the bazaar with the traditional culture of the country, conjuring up notions of piety, honesty and community on the one hand, shiftiness, gluttony and irrationality on the other. Many commentators on Iran today still lamentably employ timeless and hackneyed descriptions of a “bazaar mentality” to explain everything from Iranian statecraft to Persian literature and films. These clichés are not only insulting but also empirically inaccurate, given the adaptation and diversity within bazaar networks over the arc of modern Iranian history.
  • The director of the National Union of Clothing estimated in 2009 that over 70 percent of the foreign clothing for sale in Iran was illegally smuggled into the country, mostly to avoid a 100 percent tariff by the state.
  • Tensions between the bazaar-founded Motalafeh coalition and the Ahmadinejad government are strong. In 2005, one member described Ahmadinejad as a “political midget,” which he said did not refer to the president’s height.
  • Resalaat is a conservative newspaper associated with the Motalefeh faction. It frequently features opinion pieces on the Iranian economy arguing for more laissez-faire policies that would remove state tariffs and regulations on trade, and benefit the bazaar.
  • Bazaari merchants and their employees are now eligible to enroll in the Social Security Organization’s self-employed pension program, one of the most generous pensions in the world for retirees.
Individuals and organizations
  • Islamic Coalition Association (Jamiyat-e Motalefeh-e Islami or ICA) is a pro-Khomeini opposition group that originated in the bazaar in the early 1960s. It had to compete with other more popular political elements in the bazaar, including the Liberation Movement of Iran associated with Mehdi Bazargan. After 1979, ICA members were placed in high government posts and took staunchly conservative positions in factional battles.
  • Habibollah Asgarowladi is from a bazaar merchant family. He was a founding member of the ICA, served as minister of commerce (1981 to 1983) and was the supreme leader’s representative in the Imam Khomeini Relief Committee. He helped other ICA members get top positions in state-created Centers for Procurement and Distribution of Goods during the Iran-Iraq War. He was removed from his ministerial post after allegations of nepotism. Still an important voice in conservative politics today, his brother Asadollah is director of the Iran-China Joint Chamber of Commerce.
  • Mohsen Rafiqdoust joined the ICA as a teenager while working in the vegetable bazaar. He was nicknamed the “Imam’s driver” because he picked up Khomeini from the airport in Tehran upon his arrival from exile in February 1979. He later became the Revolutionary Guards minister and then the head of the Foundation for the Oppressed and Disabled, a large state-funded charity, in the early 1990s. He faced widespread charges of embezzlement and mismanagement. Reportedly one of the richest men in Iran, he is now active in the private sector.
  • Society of the Islamic Associations of Tehran’s Guilds and Bazaar was established by Mohammad Beheshti in late 1980 to serve as a vehicle for uniting the Islamic Associations, which helped distribute goods during 1979’s revolutionary turmoil. It later acted as a monitoring organization for anti-regime bazaari activity and profiteering. Its head until 2001, Sa’id Amani, was a founder of the ICA. Amani’s nephew, Asadollah Badamchian, was also a founder of the ICA and today is a conservative member of parliament.
The future
  • Deeper government encroachment or further economic deterioration could lead the bazaaris to protest again.
  • Yet the bazaar is unlikely to be a potent force in undermining the regime, due to multiple cleavages in bazaar networks and dependence on the state for livelihoods.
  • Privatization of state-owned companies in Iran has been transferred mostly to state-linked organizations, pension funds, and notable elites in an opaque manner. Bazaaris with clout will likely take part in this transfer of state assets.
  • The bazaar as an institution will depend less on territorial location and more on connections to other centers of economic and political power.

Kevan Harris, who frequently travels to Iran, is a doctoral candidate in sociology at Johns Hopkins University.  He recently traveled throughout Iran for a year doing research. He writes a weblog called “The Thirsty Fish."

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