Workers World, Vol. 21, No. 44
November 6 – The Iranian crisis, which has resulted in the takeover of the U.S. Embassy and the resignation of the Bazargan cabinet, has been accelerated, if not indeed propelled, by two major developments in the capitalist establishment of the U.S. These developments originate from apparently separate but in reality interconnected processes arising from acute divisions in the Carter administration.
The first one deals with the management of the developing economic crisis. The team which has been currently in charge is composed of Federal Reserve Chairman Paul Volcker, Secretary of the Treasury William Miller, and President Carter.
This trio, the Volcker-Miller-Carter so-called economic crisis management team, pushed through a package of monetary and credit measures which resulted in the virtual collapse of the stock market in the days following Oct. 6. These measures were supposed to help stabilize the economy by slowing down inflation without increasing unemployment.
The result of the package deal, after a month’s duration, has been that inflation has continued to rise. Unemployment, however, has risen far in excess of the expectations of the trio. The officially admitted increase has been to 6,200,000. In embarking upon the harsh measures which resulted in stringent credit terms for hundreds of thousands of small firms, many of which face strangulation, the trio under the whiplash of the ruling class and its media presented an apparently solid, even monolithic, united front. They all agreed to put the priority on fighting inflation while disregarding the economic consequences to the mass of the population, the working class, and the poor and oppressed in particular.
This monolithic posture by these three luminaries in the capitalist firmament began to dissolve as soon as the contradictions driving the trio apart made themselves manifest.
In the first place, the package deal has not demonstrated any tendency to dampen the galloping inflation in the slightest. In the second place, the sharp drop in October auto sales of at least 20 percent by the three largest producers – GM, Ford, and Chrysler – is a decidedly strong harbinger of things to come and tended to discredit the strategy of the Volcker-Miller-Carter crisis management team.
The package deal was supposed to dampen inflation by restricting credit to the weak capitalist sectors and weeding out the small, inefficient capitalist operators, those that number in the hundreds of thousands. To what extent it has accomplished the latter is not yet possible to tell. But the slump in sales by three of the most important and powerful capitalist monopolies accomplished the very opposite of what the package deal was supposed to do.
Secretary of the Treasury Miller, who had stood firm with the arch-reactionary banker Volcker, began to pull back and blame Volcker for “wrong timing” in introducing the package deal, although, as he said, he “still supported the general idea.” Miller also blamed Volcker by inference for the multi-billion dollar “accounting error” by the Manufacturers Hanover Trust Company. He said he was surprised by the “strange numbers” that came from the bank and made themselves evident in the Federal Reserve reports.
Volcker, for his part, made a sort of a reply to Miller by once again calling attention to the dangers inherent in the economy due to dependence on foreign oil. On this the trio could once again find common ground. Unable to demonstrate that they can avert the developing economic crisis by resorting to monetary and credit manipulation and outright financial juggling, they now seek to translate, or rather to divert, the crisis into political channels.
Thus we are witnessing how to turn a bankrupt economic policy into political adventurism. The fact that it was not only Kissinger but David Rockefeller himself, the principal U.S. banker and oil baron, who made sure that the shah was brought to this country for what is purported to be a purely humanitarian mission, is itself the best evidence as to the intimate connection between the seemingly abstract economic policy of the Carter administration and the concrete political measures which accompany the bankrupt strategy of the Volcker-Miller-Carter management team.
But this is only one of the processes whose evolution from economic management to political conspiracy has accelerated the Iranian crisis and holds out the threat of imperialist intervention.
The other major development has to do with another management team in the capitalist establishment in which Carter figures as the vacillating middle-man steadily shifting to the right. This management team is composed of Vance for the State Department, Brzezinski as the National Security Adviser, and Carter as the chief executive.
Just as Carter well-nigh abdicated his functions in managing the economy to Volcker, so Carter has here too been drifting more and more to the right over the past two years, while Brzezinski has been building up his National Security staff with so-called hard-liners from the Pentagon and reducing the role of the State Department as personified by Secretary Vance.
Contrary to the agreement that Carter made to Vance before the latter’s appointment as Secretary of State, Brzezinski has taken on a negotiating role rather than a strictly advisory role to the president. This is particularly important because it illuminates some of the facets which go to make up the recent Iranian crisis.
What the Khomeini leadership was most angered about was that Premier Bazargan was meeting in secret and negotiating with Brzezinski. Bazargan on his part, it should be noted, was meeting and negotiating with Brzezinski without the knowledge or consultation of Khomeini or his appointees.
Brzezinski, on the other hand, was meeting and negotiating with Bazargan, an event which throws into bold relief the violation of the agreement Carter originally made with Vance that only he would negotiate and Brzezinski would merely be the White House adviser.
It should be noted that only recently Brzezinski moved swiftly closer to the Pentagon than ever before by coopting into his staff a hardline general and nuclear weapons expert, Maj. General Jasper A. Welch Jr. What is more significant about this general than his nuclear weapons expertise is that he is regarded as a militarist very much akin to General Alexander Haig, who served under Nixon in a similar capacity.
Brzezinski has also thrown out a whole group of his original staff people and is said to be in the process of creating “a new, tough-minded inner circle of experienced realists, not people with stars in their eyes.” (New York Times, Nov. 5) This means greater reliance on military personnel from the Pentagon. Brzezinski, it should never be forgotten, has sterling credentials from the Rockefeller-controlled Council on Foreign Relations. The many and varied dissertations by a multitude of experts on the different aspects of the oil crisis in Foreign Affairs (its organ) manifest an almost morbid frustration which can only point, in the final analysis, to a military solution.
Thus we see that the capitalist establishment, wracked by inner crisis and unable to stabilize, let alone control, the capitalist economy, is gravitating towards a political solution which points in the direction of military adventurism.
Side by side with this crisis and slowly margining into it is the overall political crisis in the Carter administration foreign policy establishment. There too, even more so than in the economic management sector, the inability to resolve crucial foreign policy problems in a way favorable to American finance capital leads inexorably towards a merging of the two crises into one.
Whether the U.S. will actually intervene militarily no one can foretell for sure. What is a certainty is that both the economic policy planners and the political and diplomatic strategists of the capitalist establishment are slowly but surely reaching common ground which points to the substitution of military adventurism for diplomacy as an exit for the incurable ills of the capitalist system.
Last updated: 11 May 2026