Realist, not conformist analysis of the latest financial, business and political news

War Is Good Business Only If There Is No Other Business Around

Tensions rise as President Trump designates Iran’s Revolutionary Guards Corps as a terrorist group. This is the first time that the United States government has designated a part of another country’s military as such a threat. On a side-note, by designating the Revolutionary Guards as a terrorist group, the United States may have inadvertently implicated the Iranian head of state, Ayatollah Ali Khamenei, the Supreme Leader of the Islamic Republic of Iran who, happens to be the commander in chief of the armed forces, including but not limited to the IRGC.

Here in Iran, the response has been varied. While MPs made a show of solidarity by wearing Revolutionary Guards fatigues to the Parliament, conservative media had much more to say about the new designation. Keyhan newspaper, which is considered to be the most conservative Iranian newspaper in Iran—although the editor-in-chief identifies as Principalist instead of Conservative—dedicated its front page to over-the-top headlines for the past couple of days, such as:
[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Trump signs the death warrant of the American troops.[/perfectpullquote]

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]The Revolutionary Guards will make Persian Gulf a cemetery for your troops.[/perfectpullquote]

The Supreme Leader, on the other hand, chose a more measured tone. He dismissed the new policy as unimportant and ineffective as similar policies in the past forty years.

One of the questions I often receive is about the difference between the Iranian military and the Revolutionary Guard. Long story short, the military is the organization traditionally charged with the defence of the borders while, according to the Iranian constitution, the IRGC is a branch of armed forces intended to safeguard the Islamic Republic, be it from potential military coups or other domestic and international threats. So, technically they may operate both on the Iranian soil and outside its borders. All things considered however, the new policy threatens, most of all, the multi billion dollar business empire of the IRGC which, according to some reports, amounts to more than $20 billion a year.

Frederic Bastiat (1801-1850), prominent French economist once said “When goods don’t cross borders, soldiers will.” Although, the origin of the quotation has been debated by some scholars as there is little actual evidence linking the great writer to it and Some point to Otto T. Mallery’s late 19th century “economic Union and Enduring Peace” in which he states, “If soldiers are not to cross international boundaries, goods must do so. Unless the Shackles can be dropped from trade, bombs will be dropped from the sky. ” Whatever the case, there is merit in the sentiment. War is good business, only if there is no other business around.



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