Abbas Milani, a Hoover Institution research fellow and co-director of Stanford’s Iran Democracy Project, appeared on GoodFellows, Hoover’s video series that focuses on history, economics, and politics. In this excerpt, the show’s co-hosts, H. R. McMaster, John H. Cochrane, and Niall Ferguson, and moderator Bill Whalen ask him to weigh in on the Iran conflict. Watch the video here.
Bill Whalen: Abbas, I look at the government in Iran right now, and I’m somewhat confused. There is a supreme leader whom we haven’t seen or heard from since he was given that title. He reportedly was seriously wounded in the same air attack that killed his father, the Ayatollah Khamenei. It seems that the IRGC, the Islamic Revolutionary Guard Corps, is deciding when and where to fire missiles. Meanwhile, you have peace talks in Islamabad, where the Iranian delegation is led by the nation’s foreign minister and parliament speaker. Who is running the country? And as you look at the current list of players, is there any individual you see who could take over and run the country in a direction that would suit the United States? In other words, could the outcome here be regime alteration, as Sir Niall would call it, or is the end going to be regime change?
Abbas Milani: I think the group that is running the country, or the institution that is running the country, is the IRGC. I think Iran is now in every sense of the word a military dictatorship. Their occasional references to Khamenei junior are so far merely perfunctory; no one knows whether he’s alive or in what capacity. So, I think it’s the IRGC that is in charge. And there are a few of them that we know who are in command, including [Ahmad] Vahidi, one of the most notorious of these commanders; [Mohammad] Zolghadr, another one; [Mohsen] Rezaee, who by all accounts has a PhD in economics. I apologize to all the economists of the world, but he’s a true imbecile. And was an imbecile when he was a commander of the IRGC, which almost put him on trial for crimes because he sent thousands of young Iranians to sure death because of his idiocies. [Yahya] Safavi is another one. So, it’s a very small tight coterie of Islamists, almost all of whom were involved in terrorist activities before the revolution.
And I wouldn’t be at all surprised if they do what Niall suggests: that they will have a regime alteration, that they will change their tune, because to me their sole goal is survival.
Niall Ferguson: A senior US official said to me recently, “We think there are three kinds of people in the leadership. There are the fanatics, there are the politicians, and there are the corrupt.” I told this to my wife, Ayaan Hirsi Ali, and her response was, “Tell him they’re all fanatics.” What is your view?
Abbas Milani: My view is that they all have some part in these three characteristics. The person who is now deemed to be the favorite candidate to negotiate with, [speaker of Iran’s parliament Mohammad Baqer] Ghalibaf, is arguably one of the most corrupt. He’s clearly one of the most opportunistic, and he’s clearly a survivor. The rest of them, too. So that kind of differentiation doesn’t make sense to me. What makes sense is that this regime, in my view, has been badly beaten militarily. They know how badly they have been beaten, they know how their infrastructure has been damaged, they know how their economy is collapsing. So, they are trying to make every effort possible to make a deal with the United States to get out of this impasse.
But because they’re bullies, because they have ruled as bullies for forty-seven years, they can’t appear to be making concessions. So, they want to make concessions, but to declare it as forcing it down the throat of the US and Israel.
H. R. McMaster: Abbas, there have been reports about the fragmentation of the regime. Does this create an opportunity? That’s the first question. The second is—I think we agree, we’ve talked about this. There can be no enduring peace with Iran. There can be no enduring security for the Iranian people until there is a change, a fundamental change, in the nature of the regime. How could that happen through fragmentation and a portion of the regime turning against the others? Or do you think, because the regime is in this weakened state, can you see a path toward forcing that change in the regime?
Abbas Milani: I think signs of fragmentation are there. When talk of discussions between the US and Ghalibaf reached the media, the IRGC issued a very harshly worded statement. Very little attention was paid to it in the Western media, to my surprise. The concept they use is Bonapartist, a concept that comes from the Marxist tradition, primarily Antonio Gramsci’s writings. That’s when a system goes in crisis and some Napoleon-like character comes along and shuts everybody down and rules. The statement said there is a Bonapartism coming, but it’s not an individual: it is us and the people of Iran. So, clearly they were worried that Ghalibaf might be trying to make a side deal with the US. And they shut him down even before they went to the meeting.
There are other elements within the regime, like [Hassan] Rouhani, the ex-president, who even before all this was essentially offering himself as someone willing to make a deal with the US and change course. My sense is that he was so open about it, and [Mohammad Javad] Zarif, former foreign minister, was so open about it, that Khamenei’s order to absolutely brutally murder anyone who came to the streets—according to them, 3,177 in three days; everybody says it’s multiple that—was to make sure that kind of deal doesn’t happen.
So, I think that fragmentation has happened, but the IRGC so far is in command. And to go back to what Niall was saying, quoting Ayaan Hirsi Ali, who knows this region well and who knows Islam extremely well: this is a corrupt ideological regime. They’re now more corrupt than they’re ideological. They want to keep property rights. The IRGC literally controls at least half the Iranian economy. Whoever takes Khamenei’s place, the IRGC de facto or de jure gets their hands on at least a hundred billion dollars of assets. This is a mafia-like regime that is going to try to stay in power. But like all mafias, once there is that much money involved, there is infighting.
John Cochrane: You’ve turned to economics, which I like, but it looks like there are two roads we’re talking about here. One is that the regime—some form of the regime—stays in power, and we find a way to let them make a deal. And to that end, corruption is good, as opposed to fanaticism, because corrupt people can be bought and we have a lot of money to offer. You’ve made a very good comment that of course they need a face-saving way out. And any used-car dealer knows that you say, “oh boy, you got a great deal out of this!” while you’re fleecing them. Unfortunately, I’m not sure our administration is very good at letting other sides feel like they won, so that’s too bad.
The other direction, of course, what we’re all praying for, is real regime change; the IRGC goes. Anything better comes in. It might be for a while the regular military; it might be the shah’s son, and so forth. What hope is there for toppling the regime or allowing the Israelis to topple it?
Abbas Milani: You’re pointing to a very important issue, maybe the critical issue. What I think will topple this regime is the economy. It is their Achilles’ heel. The economy is on the verge of collapse. The financial system is on the verge of collapse; the second-biggest bank went belly-up a few months ago. And amongst themselves in their infighting we learned how rapacious everybody is, including Khamenei’s son. Iranian businessman Ali Ansari owns 440 million euros’ worth of assets in Europe.
Unemployment is on the rise. Inflation is above 50 percent. There is a remarkable level of incompetence, corruption, and economic challenges and it’s angering the people. And the regime knows this.
John Cochrane: Is there a strategy that targets the assets of the IRGC, as opposed to just trying to impoverish ordinary people?
Abbas Milani: I have never thought that attacking is going to solve this problem. I thought hitting them economically, freezing the assets of the IRGC, freezing Khamenei’s assets, freezing the assets of the oligarchs, and closing some of their remarkable soft-power network they have created through Europe, the US, and Canada, the schools and seminaries where they promote all those ideas . . . that to me was the way to go.
They need hundreds of billions of dollars in investment to keep the economy running, and that’s why they keep threatening the people of Iran.
Niall Ferguson: And closing the Strait of Hormuz to exercise some leverage despite the economic collapse, which I completely agree with you about, and despite the ultimate defeat that was inflicted on them. I think the worrying thing now must be that in order to get the strait reopened, we might end up relaxing the economic pressure, in fact unfreezing the assets and appealing to their corrupt side. That might mean that the net result of all of this is that the IRGC remains in power, the economic spigot is reopened, and the Iranian people lose out once again. How should the US government proceed now?
Abbas Milani: Well, it is a very hard question. On the Strait of Hormuz, there was a very interesting interview with [Ali] Shamkhani, who was Khamenei’s top military adviser. He was in charge of this national security committee that they have. And Iranian journalists asked him, this is after the shorter war before this war, “How come you didn’t close the Strait of Hormuz? You kept bluffing the journalists.” He said, “We weren’t bluffing. We will close the Strait of Hormuz when it is the last thing we do.” That is, when we are existentially threatened. So, they knew from the moment that Khamenei et al. were taken out that they were now in that existential mode. They went to the endgame. And then they realized that maybe they can make money out of this by charging for passage.
One of the things that surprised me in the Trump administration’s demands—and we’ve only seen what has leaked—is there isn’t a single mention of defending the people of Iran against this regime. Any deal made with this regime, in my view, has to include language from the administration that we promised these people we will come to their help. Now we have their back.
H. R. McMaster: This has been an element of our approach that has been most disappointing to me. Some of the language wasn’t sensitive to the tremendous opportunity and maybe the moral responsibility to come down on the side of the Iranian people. How have you seen the sentiment of the people evolving since the beginning of this war? And are the Iranian people able to muster the courage again to face the machine guns and everything else they had to face in January? Could you give us an idea of the prospects for the people seizing an opportunity?
Abbas Milani: One of the consequences of the closure of the internet is that it’s very difficult to get firsthand information. Within the past two weeks, the regime has brought in thousands and marched them in the streets, had them talk into the television and say, we are here to help support the regime. They have talked about bringing Shiites from Afghanistan to essentially fill in where the Iranian people are disappointing them. Bertolt Brecht famously said the Central Committee of the East German Communist Party is dissatisfied with the people of Germany, so they have elected a new people. That’s why every night, literally, in neighborhoods, in cities, people had gone to the street around eleven o’clock. They send their goons into the streets on bicycles, motorcycles, and cars. That’s the most empirical evidence I have seen that they very much anticipate and fear that uprising.
John Cochrane: So, here’s where I think there’s the real fork in the road. America faces a choice. Is our goal to unseat this regime completely and bring in something new? Or is our goal to lower our own short-run costs, negotiate with them, which means some promises mostly about not lobbing missiles on your neighbors and opening the strait for a while? But that means supporting them. That means giving them money. That means not helping all the people who want to unseat them. That is a very dirty deal. That looks like where the US is going because of the short-run costs.
Abbas Milani: I think you have put your finger on the most important, in my view, question the US needs to decide. They need to have a strategic decision on Iran. They haven’t had that. What do we want to do with Iran? Is Iran a possible ally of the United States or the West, can this regime be cured into becoming a law-abiding state? Or is it as dangerous as someone like me says and we need to help the Iranian people get rid of these things?
Bill Whalen: Abbas, our Goodfellows audience is very information hungry. Could you recommend a few places they should go to follow what is going on in Iran?
Abbas Milani: My suggestion is please read as much as you can, multiple sources. And believe that Iran is a pivot. You can’t have Middle East peace without a democratic Iran. And I think the people of Iran want to make that, and a wise policy is to help Iranians reach that point.
This excerpt has been edited for length and clarity. Watch the full episode here.
