Before we wax too eloquent about the democratic aspirations of the great Iranian people, we should keep in the mind that the most probable scenario for Iran under any likely regime is a sickening spiral into poverty and depopulation. Iran has the fastest-aging population of any country in the world, indeed, the fast-aging population of any country in history. It has the highest rate of venereal disease infection and the highest rate of infertility of any country in the world. It has a youth unemployment rate of 35% (adjusted for warehousing young people in state-run diploma mills). And worst of all, it has run out of water.
We might be observing the birth of Iranian democracy in the protests of the past few weeks, but it is more likely that we are watching the slow-motion train wreck of a once-great nation in all its gory detail. As I noted in an Asia Times analysis this morning, the most violent protests, e.g. the burning of a police station near Isfahan captured on this video, happened in the boondocks where water has run out. The river that runs through Isfahan, a legendary city of gardens in the desert, literally has run dry. Some Iranian officials warn that tens of millions of Iranians will have to leave their homes for lack of water. The country has used up 70% of its groundwater and its literally drying up major rivers to maintain consumption. It’s the worst ecological disaster in modern history.
The Islamic Revolution presided over an orgy of corruption, brutality, and mismanagement. Despite the Obama administration’s cash infusion and the lifting of sanctions on oil exports, the government is nearly bankrupt. It has allowed several major banks to fail, wiping out the savings of millions of depositors, after the banks lent vast sums to regime cronies for real estate speculation. Forty-five percent of Iranian bank loans are toxic and the cost of cleaning up the bank mess is estimated at half of GDP (to put that in perspective, the U.S. Treasury set aside $700 billion, or 1/20th of U.S. GDP, to bail out the banks in 2008, and needed only a fraction of it. The Iranian banking crisis is a full order of magnitude worse than the U.S. 2008 crisis).
Iran’s pension funds, as I report in Asia Times, are bankrupt. The civil service pension fund has only 100 employees paying in for every 120 employees receiving a pension. The government is on the hook for the rest.
Add up the costs of dealing with the water emergency, the bank crisis and the pension crisis, and Iran is close to broke. And that’s just the beginning: The average working-age Iranian today comes from a family of seven children, but has fewer than two children. That means that when the older generation retires, there will be fewer than two new entrants into the workforce to pay for the pensions of seven retirees. The demographic crisis hasn’t hit yet, and when it does, it will be the financial equivalent of an asteroid hitting Iran.
In other words, Iran’s exhaustion of physical as well as human capital may have pushed it past the point of no return.
Iran has plenty of smart people, and two of the best engineering universities in the world, except virtually all the top graduates leave the country. There probably is a theoretical way out of Iran’s economic spiral, but no collection of Shi’ite mullahs is going to find it. The most likely outcome is that Iran will undergo economic and social collapse.
That, sadly, is the norm in human history. The democracy first practiced by the Greek city-state is exceptional, and classical Greece is Exhibit A for civilizational self-destruction. Of the nearly 150,000 languages once spoken on this planet, a couple of thousand are left, and 90% of those will fall silent forever during the next century or so. Sometimes the best thing you can do for dying civilizations is, don’t be one of them, as I wrote in my 2011 book, How Civilizations Die.
This makes the mullahs all the more dangerous, like a bank robber with a brain tumor who takes hostages. I sincerely wish a happy outcome for the people of Persia. But we need to be prepared for a very unhappy one.