Protesters attack a government building in Fasa, southern Iran. Photograph: UGC/AFP/Getty Images

The forces that created the Islamic Republic are fomenting its destruction

By Abbas Milani
Director of the Iranian Studies program at Stanford University.

The New Statesman: 

he Islamic Republic of Iran today is less a “revolutionary” state than a hollow shell. Despite the biggest protests since 2009, the regime projects defiance. Its government threatens regional retaliation against demonstrations and claims to be resilient against sanctions and isolation. Yet behind this theatre is a state enduring its gravest crisis since the 1979 Iranian Revolution – this crisis comes not from a single protest or foreign confrontation, but a convergence of domestic exhaustion, despotism, elite fragmentation and strategic failure. The ruling class remains entrenched but increasingly disconnected from society, and is uncertain of its own future. The question is no longer whether the system is under strain, but whether it retains the internal coherence necessary to survive.

History offers a sobering parallel. In the late 1970s, a disparate coalition of urban migrants, merchants of the Grand Bazaar in Tehran (where protesters are now clashing with police), intellectuals, leftists and religious conservatives converged against the Shah. Their victory was shaped not only by domestic discontent but by international miscalculation. Western governments, eager to avoid chaos and Soviet influence, regarded Ayatollah Ruhollah Khomeini as a stabilising alternative. The result was one of the great strategic errors of the Cold War.

Today, the logic of history has reversed. The very social groups that helped bring the clerical regime to power have become its most implacable opponents. The economic foundations of the Islamic Republic have eroded beyond repair. The regime and its apologists blame it all on sanctions. Yet, four decades of inflation, mismanagement, and international isolation have impoverished virtually every segment of society. Iran’s currency has collapsed; the middle class has been hollowed out; younger generations are bereft of hope and see no plausible path to advancement. Rural and small-town populations – once reliable supporters – now confront unemployment, environmental degradation and declining state capacity. Social media has put them in direct contact with the world.

Equally significant is the regime’s transformation of its own economic base. The traditional bazaar, once a pillar of clerical power, has been steadily marginalised by para-state conglomerates linked to the Revolutionary Guards and religious foundations. These entities dominate key sectors, distort markets, and extract rents, deepening public resentment and crowding out private initiative. They have also created a new nomenklatura who shamelessly display lavish wealth, underscoring disparities in society.

Yet economics alone does not explain the regime’s vulnerability and the current crisis. What distinguishes the current moment is a profound collapse of legitimacy and people’s increasing demand for regime change. Nowhere is this clearer than in the role of women. In 1979, many Iranian women – motivated by anti-imperialist sentiment and hopes for political reform – supported Ayatollah Khomeini. But once in power his regime swiftly institutionalized gender discrimination and sexual apartheid. Legal segregation, compulsory veiling, and the erosion of civil rights followed almost immediately.

Over time, however, women have become the regime’s most consistent and courageous critics. Through sustained acts of civil disobedience – from defying dress codes to reclaiming public space – they have transformed everyday resistance into a national political force. The Woman, Life, Freedom protests, which began in September 2022, were not an anomaly, but the culmination of decades of defiance.

Authoritarian systems rely not only on coercion, but on fear. In Iran, that fear has visibly weakened. Once citizens cease to believe in the regime’s omnipotence, repression becomes less effective – and far more costly. Acts of repression only beget more acts of resistance. Externally, Iran’s strategic position has also deteriorated. The so-called “axis of resistance”, Iran’s network of Middle Eastern proxies, has become a liability rather than an asset, draining resources and entangling Tehran in conflicts it struggles to control. Relationships with Russia and China provide diplomatic cover, but little economic relief. Even long-standing regional allies increasingly hedge their bets.

Recent military confrontations further exposed the fragility of Iran’s deterrence. The rapid loss of senior military and intelligence figures punctured the image of strategic mastery the regime had carefully cultivated. In international politics, perceptions matter: the perception of weakness can be as destabilising as weakness itself. The nuclear programme, long presented as both shield and leverage, has similarly lost much of its strategic utility. Sabotage, surveillance, and exposure have reduced its bargaining value while increasing international pressure. It remains dangerous, but no longer decisive.

Inside the system, fractures are widening. Succession uncertainty, factional rivalry, and endemic corruption have eroded elite cohesion. Periodic calls for reform appear less as credible strategies than as signs of anxiety. After decades of missed opportunities, incremental change now lacks both trust and traction. What, then, lies ahead?

One possibility is a harsher form of military-security rule, dominated by the Revolutionary Guards. Yet given Iran’s economic fragility and societal alienation, such an outcome would likely prove unstable. Another is managed reform, though the regime has exhausted its credibility on that front. A third, more uncertain path involves some form of negotiated transition – an elite-brokered recalibration that removes clerical supremacy while avoiding systemic collapse. Such transitions are rare, difficult, and fraught. But history suggests they become thinkable when repression fails, elites divide, and external pressure constrains violence.

Iran may not yet be at that point. But it is closer than at any time in the past four decades. For European policymakers, the implications are clear. Stability in Iran will not come from pretending the status quo is sustainable. Nor will it emerge from episodic engagement divorced from domestic realities. A durable approach requires recognising the depth of Iran’s internal transformation – and resisting the temptation, once again, to mistake short-term containment for long-term stability.

The Islamic Republic was born of a coalition that mistook rupture for renewal. Today, that coalition has dissolved into opposition. In a final irony, the forces that created the system now threaten to unmake it. As history closes its circle, Iran confronts the truth embedded in its own revolution: in its beginning was its end.