Thursday, October 04, 2012

When currencies collapse (conflicted feelings)

Steve Hanke has charted the collapse of the Iranian rial:

I have conflicted feelings about this:

1) Sadness: this must be causing great hardship for the Iranian people
2) Comfort: this must be weakening the regime, particularly their ability to buy foreign weapons.
3) Discomfort: this collapse (following an embargo) was orchestrated by a regime with a history of dominating and exploiting foreign countries. In some sense, this is just another battle in the wars among various ruling classes.
4) Satisfaction: while any community would suffer from economic isolation, I think that the Iranian state has largely brought this on themselves, and this type of collapse is essentially inevitable. Better to get it done sooner than  later (assuming that the regime is replaced with a more humane one). The Iranian state has suppressed the creativity and initiative of the Iranian people, and their economy consequently is weak. This "black-market" deviation from state-sanctioned exchange rates indicates that the Iranian state is being sidelined within the Iranian  economy. Every black-market exchange is a tiny revolution (a la Agorism).


tip Marginal Revolution

3 comments:

rulingclass said...

Iran is certainly a violation of the "liberal state," but then again every state Internationally, sans perhaps Iceland, is a violation of liberalism.

I would dispute Iran has a history of dominating and exploiting foreign countries. That isn't true. Iran/Persia hasn't engaged in an offensive military war in a couple of centuries.

What Iran is "guilty" of is State-sponsored asymmetric warfare, namely Hezbollah, an entity born out of the Israeli invasion/occupation of Lebanon in the 1980s.

Who is the bigger monster, here? Modern Iran is a frankenstein creation of western imperialism. It is an artificial state that originates from the pen of Britain. The current fundamentalist incarnation is a direct consequence of the US overthrowing their once secular government and replacing it with a US puppet rule of a psychopathic murderer.

I dispute the narrative of this post because you are implying that "FrankenStein" is responsible for FrankenStein being FrankenStein and that FrankenStein thusly deserves its fate.

Yes, my moral sentiments views Iran as a type of Frankenstein but Dr. Frankenstein is the one who has it coming. And that would be us.

Ricketson said...

The "regime" in point 3 is the USA, not Iran.

For point 2: despite whatever abuses that the West has visited upon Iran, the current Iranian government will not be able to rectify them through military confrontation. They point their weapons in our general direction, and I would prefer that they don't get more weapons.

The Iranian state is evil, and it's political economy is pathetic. It needs to fail, regardless of anything happening anywhere else. The only issue is whether it can be replaced with something better.

rulingclass said...

my mistake about point 3.

My argument nonetheless boils down to the fact that the same argument made against iran can be made against us. We can't solve our own problem of revolution(i.e., change/reform), but we are quite ready to insist on the need of the failure of the Iranian State.

We don't disagree often. But I think we do, here.