Financial, economic, and religious bubbles

Bubbles are the outcome of vast concentration of power and wealth. This applies to political, religious, economic, and financial bubbles. It is the outcome of the competition between power groups.

As the number of power groups decreases, or one becomes overwhelmingly more powerful, the country’s economy slows down, the population becomes dissatisfied, and violence may erupt.

A classic case is the transition happening in Iran. An article in Foreign Affairs gave me the idea that bubbles do not have to be necessarily economic or financial. They can be political or religious.

The gist of the article is that Iran has become a sultanistic regime. The main issue for Iran is that Ali Khamenei is the supreme leader. The Iranian constitution endows the supreme leader with tremendous authority over all major institutions. Through the years, Khamenei has found many ways to increase his influence.

He is the head of state, the commander in chief, and the top ideologue. He also reaches into economic, religious, and cultural affairs through various councils and organs of repression, such as the Revolutionary Guards, whose commander he himself appoints, according to the writer Akhar Ganji.

The Iranian situation will remain the same as long as the power structure does not change, according to the writer. Over the course of two decades as supreme leader, Khamenei has secured a complete stranglehold on power in Iran. In fact, Iran today is indeed a neosultanate, according to Mr. Ganji.

Any political and economic system eventually moves to extremes because of the blind search for power and wealth of dominant power groups within the system.

The communist idea in the USSR and the capitalist ideology in Europe and USA collapsed because of the relentless search for power and domination by those who believe in wealth redistribution and the power of social engineering. Iran’s bubble will also collapse in due time. This is the disturbing lesson of history.

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George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977