Influencing Iran

Mark Kleiman makes an excellent point about a gap in discussion of Iran:

But what bothered me, as it usually bothers me, is that the conversation then continued under the assumption that "the United States" and "Iran" and the other national players in this game are more or less unitary actors, so that "the United States" can threaten to do something that damages "Iran" as a way of coercing "Iran" to act (or not act) in a particular way.

That mode of analysis (which I think of as "Westphalian" because of its implicit treatment of each state as a sovereign actor) is more or less standard. For some purposes, it makes accurate predictions and suggests appropriate courses of action. But it's clearly an abstraction from the real world in which the actions of "Iran" are the results of political conflicts and agreements among Iranian politicians, interest groups, and factions....

If we don't know how sending a carrier battle group to the Gulf will influence the probability that the Guardian Council will allow enough anti-Ahmadinejad candidates to run for the Majlis to take over control, then surely the right response is to learn how to guess better, not to make the decision about the CBG as if the expected impact on political developments in Iran were zero. I can't think of a more important question to ask, about any action we might take toward Iran, than "Will this strengthen or weaken the opposition to Ahmadinejad?" And yet I don't hear that question asked in the sort of thoughtful and insistent tone in which it ought to be asked....

And of course we are influencing internal Iranian politics, regardless of whether we set out to do so. Understanding the effects of our actions should be the first consideration.

So what kind of effect are we having now?

It should be self-evident that belligerent rhetoric strengthens Ahmadinejad's political position, just as bin Laden's videos used to strengthen Bush. As James Surowiecki pointed out a couple of weeks ago, though, it's actually much worse than that: belligerent rhetoric gives Ahmadinejad material support:

The past few months haven’t been easy for Iran’s President, Mahmoud Ahmadinejad. His refusal to halt Iran’s uranium-enrichment program led the United Nations to impose sanctions in December. Inflation in Iran has exploded, with the price of commodities like bread and meat rising as much as twenty-five per cent. In the country’s recent municipal elections, Ahmadinejad’s political allies were crushed, and clerics and lawmakers have begun criticizing him in public. Worse still, through the second half of 2006 the price of oil tumbled almost thirty per cent, a disaster for an economy as dependent on oil revenue as Iran’s....

This latest confrontation with the U.S. should have been the capper to a bad winter for Ahmadinejad. Strangely, though, it may instead have brought about an upturn in his fortunes. Soon, oil prices started to rise, jumping twenty per cent in just two weeks. As a result, the Iranian regime suddenly has an extra twenty million dollars or so to spend every day, a windfall that will help Ahmadinejad to placate his critics and solve some of his country’s more pressing economic problems....

When buying and selling oil, traders don’t just look at today’s supply and demand....[I]f buyers think there’s a chance that supply is going to be lower down the line—because, say, Iranian oil fields will be shut down—they will be willing to pay a higher price today in order to guarantee that they will have the oil they need....In the current confrontation between the U.S. and Iran, these same concerns create a perverse set of incentives: whenever the U.S. says things that make a military conflict with Iran seem more likely, the price of oil rises, strengthening Iran’s regime rather than weakening it....

The persistence of the risk premium means that Ahmadinejad, whatever his religious or nationalist inspiration, has an economic incentive to say confrontational things that spook the oil market. But the effect of his pronouncements is limited, because traders know that self-interest is likely to keep Iran from doing anything that would cut off the supply of oil. What really keeps the risk premium high is the American penchant for public responses to Iran’s provocations.

So once again, the Bush administration is doing the exact opposite of what would be in America's interest, while making catastrophic conflict much more likely and much more difficult if it happens.

I guess it's just what they do.