A History of Wealth and Poverty: Why a Few Nations are Rich and Many Poor, by John P. Powelson.


The Middle East in History

What would be the advantage of one huge Muslim state? I asked. "Power," Tamimi [an officer of the Muslim Brotherhood] replied without hesitation. "Power comes from unity. . . ." The first objective of power, he explained, was self-defense. . . "The second thing is to be able to protect one's resources. . . The third advantage is that when you are powerful you can impress other nations." [1]

The countries of the Middle East live in the power-syndrome era. The elites value material wealth mainly as a way to achieve power, rather than the other way around. Power derives from military and religious sources instead of from a broad base comprising individual capabilities and institutional positions other than military or religious.

The Middle East is here defined as the Byzantine and Ottoman empires and Turkey, the Arabian peninsula including Lebanon and Palestine/Israel, and Iran. Some references are to Egypt and the Maghrib, which geographically belong in North Africa but may be politically in the Middle East.

Except in Israel, an enormous cultural chasm separates the rulers — imams, generals, sheiks, monarchs, and autocratic presidents and their retinues — from the rest of society. This is so even though the most humble subject may have audience with the king, as in Saudi Arabia. Capriciousness and fear undermine the trust that elsewhere sustains the contracts, cooperation, and investment of economic development. In Israel a similar chasm lies between Jews and Arabs, whether citizens or not.

European and North American powers, along with Israel, view the rest of the Middle East in the perspective of their own past. Americans and their allies waged the Iraqi war of 1991, repeating their military victory in World War II instead of conceiving a political structure based on compromises like those being forged in the European Union. Israel, with a part-European heritage, visualizes the rest of the Middle East in nineteenth-century European terms: of land possession, boundaries, and military security rather than the incipient melting of borders in post-World-War-II Europe. While many suppose that all this will change with the 1993-94 agreements between Israel and the Palestine Liberation Organization, an observer of the power-diffusion process must approach any one event with caution.

Imposing one's own obsolete past on other peoples is not without historical precedent. Britain tried, but failed, to structure India in terms of its own, then-archaic feudal system. European colonialists in Africa endowed African chiefs with outmoded feudal powers borrowed from Europe, greater than those chiefs had ever known before. The Spanish and Portuguese transplanted their feudalism to Latin America, melding it into indigenous forms.

The Golden Age and its Decline

From the seventh to twelfth centuries, however, the same Middle East — with largely the same Arab peoples and social structures — was a leader in world trade and development, rivaling the Chinese of the time and far ahead of Europe. Historians have marveled that the Arabs, so advanced in commerce, science, and literature from the sixth to twelfth centuries, failed to generate an industrial revolution.

Even before Muhammed, a Quraysh family chain of agreements had opened up highways to commerce. During the Abbasid period (750-936), Baghdad was the great center for international trade, being surpassed by Cairo thereafter. [2] Partnerships and contracts similar to those of the Italian city states, such as commenda, were widely used. Top officials, including sultans, invested in trade just as the English Queen Elizabeth I was to do centuries later. Just as in Europe, new cities were founded: Basra, Kufa, Fustat, Qayrawan, and later Baghdad. [3]

From the ninth century on, philosophical readings became popular, with special emphasis on Aristotle. Advances were achieved in astronomy, geography, mathematics, alchemy, and medicine. [4] Traders brought science and technology from China. Much of the knowledge underlying the medieval Renaissance in western Europe had been transmitted by the Arabs, from both the ancient world and the Far East.

While the Arabs absorbed and preserved the knowledge of East and West, however, they contributed little themselves. Their leading role in trade was eroded after the eleventh century. Conventional reasons for the failure of the Middle East to capitalize on its head start include the following:

  • First, although the Byzantine emperors did make trade treaties with neighboring rulers, such as the Kievan Russians and the Hamanid emirs of Aleppo, they also discouraged or forbade their merchants to trade in distant places. [5] Jealous of rivalry by their own entrepreneurs, they left trade to outsiders, such as Russians, Arabs, and Italians. But they also feared these outsiders. For example, Kievan merchants could enter Constantinople through only one gate, in parties of fewer than fifty. [6]
  • Second, the arrival of the Seljuk Turks in the Arabian peninsula in the eleventh century, and then the European Crusades, deteriorated the prospects of merchants. [7]
  • Third, raids by nomads interrupted the long-distance caravans. For example, in the eleventh century, "the Hilalian Arabs undermined the rural prosperity of much of the eastern Maghreb and interrupted caravan routes leading to Egypt and the Sudan." [8]
  • Fourth, advances in shipbuilding and greater safety initiated the superiority of sea travel about the eleventh century, compromising land routes across Persia and Arabia.
  • Fifth, attempts to establish continuous trading routes were repeatedly thwarted by wars. For example, Iran's expensive campaigns against Egypt in the thirteenth century for routes to the Mediterranean irreparably damaged the trading of both countries. [9] The control of Constantinople by Western Christians (1204-1361) depleted its merchant class, leaving the Italians to dominate Byzantine trade until 1453. [10]
  • Sixth, although Mehmed II (r.1451-81) established a large free trade area, [11] to be extended by further Ottoman conquests, nevertheless the close, central control exercised by the sultan over all human endeavor contributed to stifling trade. [12]
  • Seventh, the capitulations (special privileges) forced upon the Ottomans by the European powers, starting with the French in 1536, hindered the development of local merchants.
  • Eighth, the Portuguese blockade of trade routes through the Middle East to Europe in the sixteenth century was the last straw. Thereafter, the Europe-Asia trade took place predominantly by sea, around the African coast and through the Indian Ocean.

These conventional explanations, while no doubt correct, once again raise further questions. Why did the Byzantine and Ottoman emperors and sultans so mistrust their merchants, and why did they milk them rather than cooperate to mutual advantage? Why did they not negotiate more treaties to permit overland trade to Asia, to the extent that it was cheaper than sea trade around the southern tip of Africa? Why did they go to war over trade routes instead of promoting peaceful competition?

The Middle East is a classic case of the failure to diffuse power. Land abundance, nomadism, and military conquest may have been prime causes. Arab and other states came to dominate or be dominated by powers of different ethnic origin and/or geographically distant from themselves, for example the Ottomans over the Arabs. Vertical alliances with leverage were unthinkable in such an atmosphere, as were also the negotiations, compromises, and contracts necessary for complex economies. Feudalism was by conquest rather than contract, and the communication gap between peasants and government was, and still is, huge.

Land and Power

As far back as history is known, the Middle East has been governed by "divine" or religious rulers responding to God, the Torah, and/or Islam. Although their powers have not been unlimited, at any point they have been stretched to the limits possible under momentary circumstances. At no point have these limits become institutionalized, so that power might become more diffuse from generation to generation. Citations exemplifying this concentration of power appear in Appendix 19.1.

Early on, power became concentrated through control of land. One of the salient, but most misunderstood, of contemporary issues, is that power is still tied to land. Indeed, landed power underlies the Arab-Israeli confrontation. In an earlier writing, [13] I outlined the history of land tenure in the Middle East, with examples, so here I summarize and generalize. The following major differences in land relationships are found between northwestern Europe and Japan on the one hand and the Middle East on the other.

First, at least by 1066, the major ethnic and land relationships were settled in northwestern Europe. The Angles, Saxons, Scandinavians, Danes in England, French, Germanic, Iberian, and Italian peoples were roughly where they remained thereafter. Wars over land pushed back and forth, not unidirectionally. In Japan also, the people in any one place were ethnically homogeneous. In the Middle East, by contrast, some ethnic groups overpowered others continuously for centuries: [14] Arabs over Egyptians and the Maghrib, Turks over Arabs, Ottomans over other Turks, and ultimately European powers over most of the Middle East and North Africa.

Second, century after century, the principal source of revenue in the Middle East was coercive taxes on land, and the principal use of capital was for military conquest. Privileged groups (janissaries, sipahis, ulama, and others) controlled the land and forced the collections. Taxes were so heavy that few people outside the elite could accumulate capital, and the elite squandered their capital on luxuries and war rather than devoting it to economic development. In northwestern Europe and Japan, by contrast, the growing power of peasants and then of bourgeoisie, relative to kings and lords, encouraged the accumulation and productive use of capital. [15]

Gulfs between peoples therefore transcended the simple dichotomy of peasant and noble. Extending rigidly to all classes, they diminished the social, political, and economic interchange and mobility of both people and capital. The Ottomans divided subject peoples into millets (communities). Distinct ethnically, religiously, geographically, socially, and politically, they would be less threat to the power group. But this division inhibited trade, credit flows, and other communication, at just the time that European merchants were traveling to fairs throughout their continent and Italian bankers were lending in France and England. Hierarchical schisms did exist in northwestern Europe and Japan as well, but to a far lesser degree.

Third, the distinction between sovereignty over land and private ownership of it; between religious, private, and royal land; and between taxes and rent, that evolved in northwestern Europe and Japan was fuzzy in the Middle East. [16]

The early Arab conquests yielded private land to the conquering soldiers, while some land was retained by former owners who paid new taxes, but later rulers found reason to transfer much of that land to the state. Ottoman rulers seized land conquered from the Byzantines on behalf of the state and therefore of themselves. The government at Istanbul often seized back land it had granted as fiefs. [17] Since religious property (waqf) was taxed more leniently, private estates were converted legally into waqf but exploited as if they were still private.

Some private holdings remained — for example, truck farms in or near villages — but there was a cycle. After a conquest, lands were engrossed and small farmers pushed off. Then small farms would be re-created to supply villages, possibly by fragmentation through inheritance. So the cycle ensued until the next conquest. It was hardly a condition to promote continuous economic development of agriculture or accumulation of capital for industry.

On the larger estates, labor by peasants was committed under contract, sometimes by sharecropping. But the peasant was more servile than in medieval northwestern Europe and Japan. Opportunities for vertical alliances were nil. "The hostility of the peasants to the great landowners can be seen in a number of episodes related by the chronicles." [18]

Fourth, not all was negative. "New canal systems were undertaken by the early caliphs; deserted farms were rehabilitated; and the culture of cotton, olives, and silk reached high standards. Knowledge was interchanged with the crusaders, who brought such products as sesame, millet, rice, lemons, apricots, and scallions. [But these positive features were overwhelmed by the negative.] Techniques of cultivation did not greatly change, and crops and infrastructure fell far short of what was being introduced into Europe during the Middle Ages." [19]

Interest Groups and Potential for Vertical Alliances

Groups to defend economic pursuits did exist, but they did not have the strength, depth, numbers, and quality of negotiation to figure in a power-diffusion process. Corporations, guilds, and towns dot Middle Eastern history, [20] but they were more pawns of central authority than independent associations, more aborted aspirations than balancers of social interests. The soldiers and the ulama (religious authorities) were corporate groups but were not available to merchants as foci for vertical alliances and leverage. Rather, in all of Ottoman history, the communication chasms among such groups was so great, and their direct reporting to the sultan so controlled, that all such negotiations were virtually impossible.

Organizations called futuwwa have unclear histories. They "consisted of fairly large solidarity groups, mainly, but not exclusively, recruited from the poorer classes and the young, and of males only. They readily adopted an attitude of hostility to the rich and powerful, at times when authority was poorly enforced, in violent disorders." [21] I have found no evidence, however, that the futuwwa negotiated with the groups they opposed in the Japanese-northwestern-European sense. Probably the power and communication gaps between them was so great as to rule this out, leaving violence as their only perceived outlet.

Occasionally one finds an apparent leverage that fails upon scrutiny. In their attempt to counterbalance the power of large landowners, tenth-century Byzantine emperors restored the preemptive rights of small owners over the abandoned land of their neighbors. [22] In the nineteenth century, the Ottomans promoted private ownership of land by Egyptian felaheens to counterbalance the power of nomads whom they considered a threat. [23] In both these cases the mirage of an alliance gives way to a view of emperors or sultans deciding in their own interests how to "support" weaker groups without the latter articulating their aspirations through their own organizations.

Instances of playing off one power against another, however, are commonplace. For example, Selim and Bayazid, sons of Suleiman the Magnificent, fought each other for the succession in 1558-59, each one bribing warrior gangs to fight for him. [24] Although the gangs were "groups" and the action might have constituted leverage, the event did nothing to enhance the power of weaker classes.

In contrast to their relative independence in Europe and Japan, business corporations and guilds were controlled by central authorities in both the Byzantine and Ottoman empires and to a lesser extent in Iran. In European guilds prices were fixed mostly by the merchants for their own profit, in Byzantium and the East mostly by the state because it would benefit from a controlled, taxable economy. The consumer may have gained more from government patronage in the East, but in the long haul the state was a fickle protector. By contrast, disparity of interests among producers in the West provided greater likelihood of subsequent pluralism and leverage.

Historical citations illustrating the central control over guilds and other corporate forms are listed in Appendix 19.2.

Money, Banking, and Finance

In the sporadic information on this subject from medieval Islamic literature or documentary sources, we encounter extensive and ramified banking activities, but we do not encounter banks. That is, we cannot identify any autonomous or semiautonomous institutions whose primary concern was dealing in money as a specialized, if not exclusive, pursuit. Banks do not make their appearance in the Islamic Middle East until comparatively recently, and, partially at least, as a result of economic and political contact with premodern Europe. [25] (Italics in original)

Udovitch goes on to argue that the "notion of deposit is completely foreign to the Islamic Middle East. In Islamic law, deposit is a custodial contract, . . . [a] conception [that] stands in sharp contrast to that prevalent in the medieval West, where the depository not only kept the funds entrusted to him but also had the right to use them for a variety of commercial purposes."

The usual explanation of this difference is the anti-usury laws in Islam, which extended the prohibition beyond "making money from money" into all profit from risk: "the prohibition of riba ["usury plus"] required that there should be absolute equality in the amounts bartered and that there should be immediate delivery on both sides." [26] Such an interpretation violates the free-market "positive-sum game," in which each party separately assesses its own values, believing that what it receives is more valuable to itself than what it gives. Riba was deemed a violation of God's command.

The difference with the West is neither compelling nor clear, however. The Koran permitted legal fictions to avoid the prohibition of riba much like those of the West to avoid the prohibition of interest. Merchants in the Abbasid period (750-936) employed capital that "was not theirs alone. Whether they had entered into partnership agreements, or had received goods on commenda (qirad, mudabara), they thus combined their own resources with those of others, with the object of widening their business activity and spreading the risk." [27] They invented letters of credit and promissory notes. The hawala, or payment of debt through the transfer of a claim over large distances, was common in the eighth century. [28] There is no persuasive evidence that Islamic traders were more deterred by the proscription of usury than were their Christian counterparts. Indeed, the vast free trade area (Dar-es-Islam) opened up by the conquests of the seventh and subsequent centuries encouraged widespread use of Islamic money and trading documents that rivaled those of the West and that spread throughout the Islamic area. [29]

Still, these relationships did not develop into modern banks issuing their own currency. Udovitch speculates that this was because Middle Eastern financing was confined to a limited group: "the inordinate prominence of status and personal relations in their operations." [30] True banking requires wider, more impersonal circles. Udovitch is correct, but the failure did not lie with banking alone. Rather, the limitation of all economic activity to persons with status swept all the institutions of economic growth, including the banks, into its orbit.


Islamic law is religious law. Every early society conforms to its own religion and usually does not distinguish among religion, culture, and law. Does an early society choose its religion to justify institutions already selected, or does it select its institutions according to pre-received religious values, or is the causation mutual?

Islamic law has asserted its divine nature to legitimize the power of "divine" rulers. The same was so with European and Japanese laws. But the divinity of kings ended in England with its civil war, in France with its 1789 revolution, and it probably ended in Japan with the Taisho crisis of 1913 [31] and, if not then, certainly after World War II. Several Middle Eastern rulers still draw on their divine mandate, however. [32] In this, the "will of God" is simply the will of the rulers. This assessment in no way impugns the religious sincerity of the makers of Islamic law, who may have fervently believed that they were responding to the will of God. Many Christian lawmakers have believed similarly.

Islamic law did not begin this way, however. "At an early period, the ancient Arab idea of sunna, precedent or normative custom, reasserted itself in Islam. Whatever was customary was right, whatever their forefathers had done deserved to be imitated." [33] "The Qur'an makes little distinction between law and morality or religious ethic." [34]

In this early law, legal privileges were in principle available to all equally, [35] and different schools developed in different places. Since customary law is the antecedent of most law, including European, Japanese, African, and Indian, there was as yet nothing distinctive about Islamic in this respect. But in the first century of Islam (seventh century CE), judges (qadis) began to examine whether customary law conformed to the Koran and to adjust it where it did not. "As a result [of these interpretations, or ijtihad], the popular and administrative practice of the late Umayyad period was transformed into the religious law of Islam [the Shari'a]." [36] Some conventional ("Western") critiques of how Islamic law inhibits economic development are shown below.

  • First, Islamic law is inflexible, because in the tenth century "future jurists were denied the right to use their independent effort or ijtihad and instead were bound by the doctrines of taqlid, or 'imitation,' to follow the rules laid down by their predecessors. . . . Islamic law was denied the opportunity to emerge as a law of Contract and remained crystallized as a law of contracts." [37] Ijma', the result of ijtihad, did tolerate different schools but also became "a prohibitive and exclusive principle. . . the infallible expression of God's will, [whose violation was] to be guilty of heresy!" [38]
  • Second, "A contract in Islamic law is simply a legally recognized undertaking." It may be binding only on one party, for example a marriage contract. Thus a contract may be enforceable only by the more powerful person (e.g., a man, not a woman), or uncertainties may be decided in favor of the more powerful (e.g., landowner rather than tenant). [39]
  • Third, definitions of trading and partnership are strict, not allowing for circumstances different from those comprehended by the law. For example, a contract usually must fit within four fundamental principles: sale, hire, gift, and loan. Those that do not are not readily protected. Restrictions limit the scope of potential transactions. For example, in partnership "as far as possible the partners should make contributions of the same nature." [40]

All the aforementioned reflect how — unlike in the West and Japan — law from the beginning of Islam to the present day has not been created through negotiation by merchants, industrialists, financiers, peasants, and workers. It has not been forged by politically independent judges following precedents in court cases. Nor has it been fashioned by independent legal scholars, separate from government or religion. Instead, Islamic law represents primarily the interests of those powerful persons who either created it themselves, in the name of God, or appointed the judges who did so.

The law has not been totally rigid. Circumstances change; technologies change; new situations arise. Enterprise and trade cannot take place without risk or interest charges. In one way or another, judgments have allowed for these circumventions. Still, they remain circumventions, not evolution of legal thought. It is said that if one understands Islamic culture one may behave in ways to protect oneself. Still, the uncertainties of a law that changes de facto but not de jure surely inhibit innovation and investment.


The history of the Middle East is dotted with reforms, or discontinuous change. For the most part, the reforms were brought about by a cohesive group such as a government or sultan and were not negotiated by all affected parties. Middle Eastern reforms are roughly of two types: (1) those intended to purify Islam when it has become too worldly; and (2) government undertakings to modernize political and economic institutions.

Some of the first group were negotiated by participants, for example those of Sufi orders with voluntary membership of believers. These may behave peacefully and spiritually and have no political aspirations. But other groups have "purified" Islam coercively, overthrowing regimes to establish themselves as curators of government and religion. The latter include the Assassins, Almoravids, Almohads, Fulani warriors, Wahabbis, and today's fundamentalists who violently attack in Algeria, Egypt, Iran, and other parts of the Middle East (and even in New York).

Unlike the restructuring in Meiji Japan or the gradual formation of banking and legal institutions in the West, reforms of political and economic institutions in the Middle East have been administered mainly from above. Therefore, either they have been reversed when their progenitors passed on, or the reformed organizations have housed unreformed institutions. Here are a few examples of these reformers.

John of Cappadocia

In 535-36, John of Cappadocia, minister for Emperor Justinian, tried to end corruption and purchase of offices, to cut down on expenditures, and to squeeze out duplicative activities. [41] His problem, common to many societies, was that the system he tried to reform had not been constructed for its logic and efficiency but had been decreed in response to the relative muscle of prominent persons, and the balance of power had not greatly changed. In particular, Theodora, Justinian's empress, took the side of the wasteful officials and had John dismissed and his property confiscated. Despite a subsequent restitution, John was later exiled. He was allowed to return, much chastened, only after Theodora's death. "Many of John's administrative reforms were abrogated by his successors, and the centralized, uniform, tidy empire of his dream — and Justinian's too — was never realized." [42]

Mahmud Ghazan Khan

Fearing that the Il-Khan (Mongol Empire in Iran) economy was being undercut both through decreased food production caused by landholders abusing peasants and through improper handling of money and taxes, Emperor Ghazan Khan (r.1294-1304) decreed comprehensive reforms: "the rates and methods of payment of taxes were prescribed; the Yam [postal service] system was reorganized; the coinage and weights and measures were reformed; the activities and payment of Islamic judges, qadis, were regulated; incentives to encourage the recultivation of land that had fallen out of use were offered; and the problem of finding an appropriate way of paying the army was tackled." [43]

Ghazan did not act out of sympathy for the peasants: "If it is expedient, then let me pillage them all. . . . Let us rob them together." [44] But he limited landowners' rights, in order to encourage peasants not to abandon the fields (which would have been a case of peasants and lords escaping each other). [45]

But at best, Ghazan's success was doubtful. "The moment control was relaxed there was a tendency to relapse into the old habits, and thus it was a constant struggle to restrain officials from committing extortion against those under their power." [46]

Selim III and Mahmud II

In 1792, the Turkish Sultan Selim III decreed reforms, called nizam-i-cedid, to eliminate corruption and bureaucratic inefficiencies: "regulations dealing with administrative, fiscal, and military affairs . . . essentially a programme of modernization and Europeanization of the Turkish machinery of government. . . . His reforms ran into opposition from the powerful conservative forces in Turkish society, the military and religious establishments, the corps of Janissaries and the 'ulema.'" [47]

Findley argues that these reforms, along with those of Mahmud II (r.1808-39), marked the beginning of Turkish modernization. [48] A window to the West was opened through a new foreign ministry and ambassadors to other countries. A new scribal system would lead to a government bureaucracy of a Western model. The Gulhane Decree of 1839 "contained legal innovations of epoch-making importance," including "the effacement of the centuries-old dichotomy of rulers and subjects and the opening of a new age of equality." [49] But Findley also notes that Mahmud "insisted on the sultan's dominance over the course of change." [50]

Mahmud abolished the medieval janissaries but restructured the bureaucracy to bring it more tightly under his control. Attempts to centralize tax collections did not succeed because, unable to afford adequate salaries, the government could not replace the tax farmers. "He failed . . . to abolish bribery and confiscation and to pay salaries regularly." [51]

The Tanzimat

After Mahmud's death in 1839, his sons and their successors continued his reforms for thirty-seven years, under the name Tanzimat, derived from a root meaning "order." Education, law, government bureaucracy, and land tenure were restructured after Western precepts. [52] But the Tanzimat was much different from the centralization of law and government in France or England of the tenth to thirteenth centuries. That occurred alongside independently evolving guilds, land tenure, money and credit, commercial law, and parliamentary consultation. In Turkey, on the other hand, Western imitations were decreed without the same history, checks, or balances. [53]

The land law of 1858 was intended to identify owners responsible for taxes, to prevent illegal conversion of religious into private property, and to prevent massive agglomerations such as single owners of whole villages. But the code did not take account of many controversial aspects of landholding, such as collective ownership and share tenancy; nor did it foresee ways of avoidance, such as peasants registering lands in the names of others, more powerful than they, to avoid taxes. [54]

The Tanzimat ended in 1876 with the overthrow of the sultan and the writing of the first Ottoman constitution. In this, "the right to continue legislating by decree was nowhere denied [the sultan], and his freedom to veto laws passed in the parliament . . . was without check." [55] The succeeding sultan, Abdulhamid II (r.1876-1909) "dismissed the parliament, which had met in March 1877, and suspended the constitution in February 1878. Thenceforth for forty years he ruled from his seclusion at Yildiz Palace in Istanbul, assisted by a system of secret police, an expanded telegraph network, and severe censorship." [56]

The White Revolution in Iran

The revolution that overthrew the government of Iran in 1979 was directed against a shah who had accomplished one of the most daring, all-inclusive land reforms in history, giving the peasants not only his own lands, but also those of all large landowners; who had opened the educational system to all, building new universities and greatly increasing the number of students; who had westernized the legal system, taking justice out of the hands of the church (the ulama) and establishing secular courts; who had emancipated women, removing the veil and opening equal opportunities in employment; who had initiated a literacy corps to reduce illiteracy from 80 percent of the population to 60 percent in fifteen years; who had greatly increased the number of hospitals and doctors, providing free medical care to the poor; who had professionalized the civil service and the army; who had promoted farming cooperatives and given technical assistance and funds to small farmers; who had helped agricultural and industrial output increase by averages of 9 percent and 16.8 percent respectively, per year for fifteen years; and who had overseen an increase in consumption per capita from $131 per year in 1959 to $416 only fifteen years later. [57] Because small farmers no longer paid feudal rents and because there were more jobs in industry and higher wages, surely income was more equitably distributed during the shah's reign than it ever had been earlier.

But Shah Mohammed Reza Pahlavi's White Revolution failed; he was overthrown and his reforms reversed. Here are some likely reasons. First, the shah imposed the revolution himself, backed by an army financed by oil revenues; parliament was a rubber stamp. Second, he rode roughly over his political opponents, jailing, executing, and probably torturing. Most serious of all, he crossed swords with Shi'ite Muslims, whose institutions owned much of the expropriated land. [58] In all these ways, he created opponents who ultimately became more powerful than he was.

Reform From Above

All the reforms cited here take their place historically alongside others imposed from above upon a cultural complex ill-suited to receive them: those of Wang Mang and Wang An-Shih of China, Peter I and Catherine II of Russia, the European imperialists in Asia and Africa, and the socialist countries of the twentieth century.

Underlying the failures of all these reforms were three principles. First, they attempted to restructure their countries according to the imaginations of the rulers or, for Turkey, in the image of the West. In the case of Turkey and the shah's Iran, they tried to "Westernize" in the absence of complementary institutions like those of the West. Second, they were decreed by rulers or sultans with little incentive to enforce them, for in most cases their own powers would have been diminished. Third, and most important of all, they were not undertaken through negotiations with all persons who might be affected by them, nor could they have been, because those persons were not organized into corporate groups. These three principles are summarized into one: Countries living in the power-syndrome era cannot suddenly become images of those in which the power-diffusion process has run for centuries.


  1. MacLeod, Scott, "In the Wake of 'Desert Storm,'" The New York Review, 3/7/91.
  2. Cahen 1970:523. Trade in the Islamic world is also described in Chaudhuri 1985.
  3. Cahen 1970:512.
  4. Encyclopedia Britannica 1978:82-85.
  5. Lewis 1988:58, 60.
  6. Lawrence 1978:28.
  7. Cahen 1970:536-37.
  8. Lewis 1988:104.
  9. EBMa 1974:9:858.
  10. Lewis 1988:155.
  11. Parry 1976:50.
  12. Babinger 1978:451.
  13. Powelson 1988: Chapters 11 and 12.
  14. Laroui 1977.
  15. Powelson 1988:138.
  16. Powelson 1988: Chapters 11 and 12.
  17. Parry 1976:128.
  18. Cahen 1970:519-20.
  19. Powelson 1988:147.
  20. Cahen 1970:514.
  21. Cahen 1970:529.
  22. Ostrogorsky 1966:217.
  23. Granott 1952:252.
  24. Parry 1976:128-29.
  25. Udovitch 1979:255.
  26. Coulson 1984:16.
  27. Cahen 1970:525.
  28. Udovitch 1979:263.
  29. Lewis 1988:37.
  30. Udovitch 1979:272.
  31. If a specific date is to be given, it might be in February 1913, when the Japanese Diet rejected a command by the emperor to withdraw a motion of no confidence against the prime minister, and it was not punished for disobedience. See Najita 1967:151.
  32. Coulson 1968:54, cited in Mensah-Brown 1976:42.
  33. Schacht 1970:543.
  34. Mensah-Brown 1976:43.
  35. Cahen 1970:515.
  36. Schacht 1970:549.
  37. Coulson 1984:17.
  38. Mensah-Brown 1976:44.
  39. Coulson 1984:18, 22.
  40. Coulson 1984:23. 27.
  41. Browning 1987:50.
  42. Browning 1987:51.
  43. Morgan 1986:169.
  44. Morgan 1986:167.
  45. I have described Ghazan's land reforms in Powelson 1988:136-37.
  46. Lambton 1953:92.
  47. Richmond 1977:33.
  48. Findley 1980:33, 126-150.
  49. Findley 1980:146.
  50. Findley 1980:113.
  51. Davison 1963:30.
  52. Details are found in Davison 1963.
  53. Findley 1980:220.
  54. Davison 1963:99.
  55. Findley 1980:226.
  56. EBMi 1974:1:15.
  57. All data in this paragraph are from Lenczowski 1978.
  58. Gage, Nicholas, "Basis of Iranian Conflict: A Mishandling of Modernization," New York Times, 12/22/78.

Copyright © 1994 by the University of Michigan. First published in the USA by the University of Michigan Press, 1994.

Published on the World Wide Web by The Quaker Economist with permission from the University of Michigan Press, 2005.

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