In this piece- in today’s Donya-ye Eghtesad
- Mr Jenansefat writes about rent seeking in Iran. This is absolutely fine and it is an issue about which- given its predominance in Iran- we should write daily. To be brutally frank, he mixes a bit of truth with a lot of prejudice and misinforms the readers. He says, “One link” of all rent seeking behaviour in Iran is to the monopolistic state enterprises. Fine, but, what about “other links”! Am I not right to ask that when we speak about “ one link”, we must presuppose that there are links too? But he adds, “ Monopolistically supplying goods and services by the state at a very low price, is the root cause of rent seeking”.
Does he mean that rent-seeking has no other roots?
Read a bit further, and you discover that rent seeking- in Jenansefat’s view- does not appear to have any other roots. “ to organise strange tenders or even proper ones to build bridges, roads, airports, power stations, refineries… would lead to some kinds of rent seeking” in the economy.
He may wish to criticise “ strange tenders”, but, no, in his views, even the“ proper” ones are problematic too. I say: okay! If we wish to get rid of rent seeking, what should we do? If even proper tenders to build roads lead to rent seeking, how should roads be built in Iran? What about railways, airports..etc.
I expected to see a strong condemnation of rent seeking in all its forms by Mr Jenansefat. Alas! This does not appear to be his project . In the entire piece, there is not s single word about rent seeking by the private sector in Iran. Is he saying that there is no rent in the private sector? I doubt it. Of course, I am not only concerned with transactions between the State and private firms, I am, here concerned with transactions among private firms themselves. If he believes that there is no rent in the private sector, does he really say that private companies have never been involved in creating artificial shortage in the market to push the prices up? He knows and I know that they were, and they are even involved now. This extra money which is being made in this way, is not “ profit” as we define it in economics. What is this called, Mr Jenansefat? When we come to his solution to get rid of rents, his hands are exposed. “Drying up rent seeking has one and only one solution. The state should avoid intervening in the supply side of the economy, production, trade, and banking. Short of this, there is no other effective, cheap, sustainable means of doing this”.
This claim is the centre piece of his views. Using, or rather abusing economic problems in Iran to push forward a neoliberal idealogical offensive. The " invisible hands" would solve all the not observed economic problems!
But, by the way, Dear Mr Jenansefat, could you please name one
small, or medium, or large economy in this- or if you like in any other- planet that have done what you want to be done in Iran?One
would be more than enough!
My Dear Mr Jenansefat, the ball is in your court now!