To the Editor:

In "Taking on Tehran" (March/April 2005), Kenneth Pollack and Ray Takeyh suggest that a "carrots and sticks" policy is the right way to deal with Tehran's nuclear ambitions. They correctly argue that the Iranian economy suffers from chronic high unemployment and high inflation and needs a massive infusion of foreign capital. They also recognize that the economic plight of the Iranian people will only improve with the elimination of the monopoly power of state- and foundation-owned enterprises. But they base their policy recommendation on two false premises: they fail to realize that the mullahs' regime retains power by monopolizing the economy and oil resources, and they wrongly assume that the regime is genuinely interested in addressing the economic hardships of its people.

Tehran has had ample opportunity to open up the economy. Instead, it has limited liberalization to so-called free-trade zones -- mostly island areas far away from the rest of the country. The regime fears strong, independent business owners who could gain enough political influence and social status to threaten the mullahs' power base. Indeed, one of the reasons the Iranian people have not risen up against the government is that they are too busy struggling to survive. There is thus no carrot big enough to convince Tehran to give up its nuclear program.

Furthermore, the Iranian government sees no tradeoff between its nuclear program and the economic well-being of its citizens. The mullahs are convinced that once armed with a nuclear arsenal, they will be able to gain economic concessions from the rest of the world -- particularly from the United States.


Professor of Economics and Dean of the School of Business, Georgian Court University