What the USSR Teaches Us about Easing Iran Tensions

The year is 1991, mid-August.  The phone lines in Soviet General Secretary Mikhail Gorbachev’s villa on the Black Sea are dead.  They’re coming.   Gorbachev gathers his family and warns them: “very dangerous events are about to unfold. I cannot go for a compromise with them.”  The Chief of the KGB arrives with the Defense Minister and six other coup-plotters in tow.  When Gorbachev refuses to join them, they fly back to Moscow, leaving the family under house arrest.  Suddenly, the villa’s state-appointed bodyguards aren’t as comforting as they once were.

The leaders of the coup declare a state of emergency.  Tanks roll onto the streets of Moscow.  But President Boris Yeltsin, with the popular support of the Russian people, fights back.


Many in the military refuse to join the coup; refuse to shoot at their brothers and sisters.  In three days the coup dies, its leaders are arrested, and many suspected of hardline sympathies are removed from power.


In an Op-Ed to the Washington Post, twenty years after the coup, Gorbachev explained why the coup failed: “People had become citizens; they supported change even when the going got tough. We had prepared an anti-crisis economic program, which all the republics, including the Baltic States, were ready to implement.”  That anti-crisis economic program was the Union Treaty, a revision to the 1922 treaty that founded the USSR.  This new Union Treaty would grant states in the Soviet sphere more economic autonomy.  It was this plan which pushed the hardliners too hard and inspired the coup: they feared an existential change to the nature of the USSR which had legitimized their vast power and wealth (read more about this existential threat in “Hugging The Boogeyman,” a section of the first article in this series, Pushing The Hardliners Too Hard).

Not What “Gorbie” Wanted

But Gorbachev never wanted the USSR to dissolve.  That was Yeltsin’s doing, three months after the coup failed.  Yeltsin met with his Belarusian and Ukrainian counterparts to informally discuss “the future.”  Would you agree for the Soviet Union to end its existence?  Ok, they said.  But Gorbachev wanted to reform the USSR from within, and he regrets that he let Yeltsin become powerful enough to dissolve it: “I was probably too liberal and democratic as regards Yeltsin. I should have sent him as ambassador to Great Britain or maybe a former British colony.”


Many analysts have said it is faulty to compare Rouhani and Gorbachev.  That’s true, but not quite for the reasons they list.  As General Secretary of the Communist Party, Gorbachev was the head of state.  His Iranian counterpart, therefore, is the Supreme Leader.  Like Gorbachev, Khamenei’s primary concern is the survival of his regime.  As Mehdi Khalaji, senior fellow at The Washington Institute for Near East Policy, said on NPR in October: the regime “[doesn’t] fight for Islam; they fight for their self-interest.  The expedience of the regime trumps everything, including religion.”  While Khamenei currently supports Rouhani’s reconciliation efforts, that support would surely vanish and Rouhani would be outcast (or worse) if Khamenei felt that Rouhani was—like Yeltsin—trying to dismantle the regime.



But Khamenei’s hands are tied, just like Gorbachev’s were in 1991.  The Russian people—like the Iranians today—were restless and stagnant, demanding better economic conditions.  Gorbachev’s revision of the Union Treaty, however, was decidedly different from Deng’s approach to fixing China’s economy.  Deng tackled the deep structural problems of China’s economy, while at the same time reducing political freedom in his country.  Gorbachev, on the other hand, made only minor, piecemeal economic changes, and accompanied these baby steps with giant leaps forward in the political arena.

The Cure Was Worse Than The Disease

In 1985, Gorbachev implemented perestroika, a substantial “restructuring” of the role of the Communist Party in centralized economic planning, essentially an attempt to create a hybrid socialist-capitalist economy.  The consequences of this semi-mixed economy plus the contradictions of the reforms themselves brought economic chaos to the country and great unpopularity to Gorbachev.  In crude terms, his economic reforms were half-assed while Deng’s were whole-assed.

That being said, Gorbachev’s efforts to liberalize Soviet society and politics—known as glasnost—were highly successful.  Political factions other than the Communist Party were allowed to organize, media censorship decreased, and criticism of the government was allowed.  Keep in mind that these newfound freedoms were also accompanied with popular panic—an information overload from new ideas in a previously single-party state—and Gorbachev was again ultimately blamed for the ensuing chaos.  So when I say glasnost was successful, I imply only that the immediate end results were achieved, not that these results benefitted Gorbachev.


Another unintended consequence of glasnost was the arrival of Yeltsin himself.  Glasnost started around 1985: Yeltsin was elected president in 1991, and again in 1996 (although his reelection is disputed).  This timeline suggests that glasnost was a doubly damaging reform for Gorbachev: the people criticized him and elected Yeltsin, who in turn took Gorbachev’s reforms further than “Gorbie” ever intended by dissolving the USSR.

Remember that Deng made no such socio-political reforms; quite the contrary in fact.  But Gorbachev’s socio-political-economic approach was almost overthrown by a coup and ultimately paved the way for the collapse of the Soviet Union.  Deng’s open-economy-closed-society approach, on the other hand, allowed for change from within while at the same time strengthening the authority of the Chinese Communist Party.[1]

Trading With The Enemy: Easier Said Than Done

Let’s now return to the economics component of this research: total trade flows with the United States.  And again, let’s draw a distinction between Deng’s reforms and those of Gorbachev.

US Total Trade Flows

Assuming that trade with the United States is indicative of a country’s economic performance—that more trade with America correlates with a growing economy while less trade with America suggests a slow or stagnant one—then it becomes clear that China’s economy under Deng was doing better as compared with the performance of the Soviet Union economy during glasnost and perestroika.[2]

A possible explanation for the disparity between US-USSR trade flows and US-China trade flows is fully explained in the previous article: America and China spent years working behind-the-scenes before formally normalizing relations.  Remember, Nixon and Mao signed the Shanghai Joint Communiqué in 1972, opening US-China trade flows and improving China’s economy for six years before Deng took over.

That’s not to say that US-Soviet trade wasn’t tried.  Also in 1972, with a White House executive communiqué, Nixon established the US-USSR Joint Commercial Commission to “promote the development of mutually beneficial commercial relations… [and] negotiate an overall trade agreement.”   A year later, Nixon and Brezhnev founded the US-USSR Trade and Economic Council.


But resuming trade with a primary adversary is more difficult than getting some signatures.  And in this way, US-China trade was easier to accomplish than US-USSR trade, because the former was a junior threat in the Cold War as compared with the senior threat of the Soviet Union.  Today, however, Iran is the senior threat: US-Iran mutual mistrust hamstrings rapprochement.  This mirrors the way ideological differences during the Cold War stymied efforts to improve US-USSR relations, economic and otherwise.

This secret CIA document from 1972 was released in 1998.  It reveals that America’s unilateral efforts to make it easier to sell food and technology to the USSR were met in Moscow with reciprocal economic overtures.  But these transactions ranged from the tens to the hundreds of millions of US dollars, which on the superpower scale isn’t very much.   The secret document concludes that without opening bilateral lines of credit, US-USSR trade flows could never blossom into meaningful amounts.

CIA doc 1972

And yet, calls for economic cooperation continued.  In 1987, Reagan and Gorbachev issued another executive authorization, effectively echoing Nixon’s aspirations for more US-Soviet trade.


Even Congress passed a Trade Bill to support US-USSR trade.  But the Joint Commercial Commission meetings were routinely postponed and failed to ignite trade flows, as explained by the April 1988 issue of the Economic Intelligence Review.  Still, the pro-trade camp was persistent: 16 years after the Commission was established, several high-level American government officials and 500 business executives continued to lobby for an economic “initiative to stimulate trade with the Soviet Union.”  The 1988 plan was proposed by Commerce Secretary C. William Verity, Jr. and the State Department supported it.  But naysayers in the Pentagon shot it down “because of [their] fear that an improved Soviet economy would mean a stronger military adversary.”

Two years later, the KGB and seven other hardliners came knocking on Gorbachev’s door.  Understanding the exact psychology behind their coup is a nigh impossible task.  But assuming that they were rational actors, we can agree that they expected to be successful.  And there must have been a tipping point at which, according to Gorbachev, “They all took fright and concluded they had nothing to lose. So they decided to go for a coup d’etat.”  I submit that part of their calculation was predicated on popular support, at least to the extent that any resulting public fallout could be squashed and the coup-plotters could emerge still-in-charge.

coup plotters

I further submit that if the Soviet economy was performing better in 1991 (i.e. US-USSR total trade flows were higher), then the plotters might not have expected enough popular support for their coup and abandoned the idea all together.

Better Today, Or Yesterday?  That Is The Question

The thinking behind this hypothesis is encapsulated by the theory of “economic retrospective voting,” a phenomenon in democratic elections.  It is quite well articulated in this study published in 1978 by the American Journal of Political Science, and it can be simply summed up in the two following questions that voters (according to the theory) ask themselves before voting: Am I better off now?  Or was I better off four years ago?  If they feel better off, they vote for more of the same.  If not, they vote for change.[3]

retrospective votingThe theory of retrospective voting reveals a strategic reality for hardliners considering a coup.  If the economy is stalled or shrinking, people will support change, and hardliners will feel emboldened to attempt a coup.  If the economy is improving, people will resist change, and the likelihood of a successful hardline coup will diminish.

Recalling the analogy drawn earlier in this piece, the state of an economy can be reflected in the amount of total trade flows with America.  So we can rephrase the foregoing conclusion thusly: if trade flows with America are high, the likelihood of a successful hardline coup will be low.  Therefore, an improving economy insulates reformers from hardliners who oppose reconciliation with America, which to them is an existential threat (read more about the existential threat in “Hugging the Boogeyman” section of the first piece of this series).



Take another look at this chart.  Deng’s trade with America was $7.71 billion, and no one tried to overthrow him.  Gorbachev’s trade with America was a third of that, $2.59 billion, and eight hardliners decided to take their chances with a coup.

US Total Trade Flows

Now look at US-Iran trade flow levels.  And consider what I discussed in the previous article—that Rouhani’s economic reforms are necessarily conjoined with domestic and international politics.  I conclude, therefore, that unless Iran receives sanctions relief and US-Iran trade increases, Rouhani will face a very high probability of a hardline coup against him, most likely led by the IRGC.  The more concessions made by Rouhani and his chief nuclear negotiator Javad Zarif, the wider the rift between reformers and hardliners will grow.  It follows that the IRGC and other hardliners will feel more and more the existential threat of rapprochement, which increases the likelihood that “they [conclude] they [have] nothing to lose…So they [decide] to go for a coup d’etat.”

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[1] At least, in the short- and medium-term.  It remains to be seen if China’s rising middle class will start clamoring for democracy, as many analysts predict they will.

[2] The USSR data in this chart is from 1992 and not exactly at the time of Gorbachev’s reforms, but it is still suggestive of the Soviet economy around that time.

[3] As is the case for all ambitious and far-reaching pieces of academic research, the theory of retrospective voting is disputed by some.  This 2007 study from the University of Chicago draws a critical distinction: the more local the election, the less reliable is the theory of retrospective voting.  But this research deals exclusively with the national level, so retrospective voting theory is a feasible insight into my hypothesis regarding hardline coups.