Isam al-Khafaji’s article is the most interesting essay on Iraq that I have read in a long time. It sheds much light on the actual workings of Saddam Hussein’s regime. From the vantage point of 1985, it appears clear that the pattern of spending of state revenues, particularly from the middle 1970s onward, has led to the strengthening of capitalism in Iraq. But can one infer from this that the social power or political weight of Iraq’s capitalists has commensurately increased? What power of leverage do these capitalists have over the state structure and to what degree do they influence the pattern of state spending? Are we witnessing the growth of an autonomous or of an essentially parasitic type of capitalism? It would have been helpful if Khafaji had given us his opinion on these matters.

In the last section of his essay, Khafaji deals with observations I made in the concluding few chapters of my study of Iraq. I myself have always felt that these chapters were the most unsatisfactory parts of my book. I wrote them in early 1973 and was able to revise them only slightly in 1977 shortly before the manuscript went to press. In the middle 1970s I was in Beirut. Lebanon was then in the throes of a murderous civil war. Newspapers were coming from Iraq only in a random manner or scarcely at all. For the whole post-1969 period, the only statistical abstract for Iraq I had was for 1973. My latest figures for the distribution of national income related to 1969. In brief, the venturesome generalizations I made were based on fragmentary data and applied to the conditions existing in the first third of the 1970s. I duly warned my reader about the paucity of my evidence and “the fluidity of the social situation.”

The factual trends described in Khafaji were then scarcely discernible, particularly to an observer in Beirut, but I have for some time now been aware of them. In a recent essay, I pointed out that the class identified by the regime as “agents of the commercial socialist sector” increased from 24,301 in 1970 to 50,980 in 1974 and 126,592 in 1981. [1] “Among state contractors,” I wrote, “the tendency to personal accumulation has been strongest, as is evident from the contributions they have been making to Iraq’s war effort which in one case reached as high as half a million dinars.” [2]

Khafaji takes issue with my “classification of classes.” I must admit that I had difficulty defining the “middle” social elements. How was I to categorize, for example, an army officer who did not own any means of production and who obviously could not be assimilated to the propertyless workers? Where it was a matter of such clearly identifiable classes as landowners, men of capital, or agricultural or industrial workers, I used the term "class" in the classical Marxist sense, namely a group marked off by a common relationship to the means of production.

I did, however, bring in the notion of “status” when I had to differentiate between such status groups within the landed class as the landed tribal shaikhs and the landed ‘ulama’ who performed different social functions. I also used it, as well as the criterion of income, to differentiate the large and motley salaried groups which could not be comprehended entirely within the traditional Marxian framework. At any rate, my working definition of “middle classes” really comprised two interrelated elements: “Middle classes” refer first of all to that composite part of society which is plural in its functions but has in common an intermediate status or a middling position between the property- less and the big proprietors and which includes, among other elements, army officers, civil servants, members of the professions, merchants, tradesmen and landowners. At the same time, these middle class elements, though diverse, must not be viewed in isolation from “the living network of social relationships”: this would be tantamount to “losing sight of such things as informal partnerships or connections between bureaucrats and merchants or the frequent linkages of officials or army officers and tradespeople or proprietors through the family or extended family.”

From Khafaji one might derive the impression that the concept of “middle classes” served as a master key in my analytical scheme. In fact, as a careful reading of chapter 25 would reveal, it was merely one element in a much broader definition of the post-1958 social situation. Khafaji disengages this one element and discusses it in isolation from the rest of the definition which has to be considered in its totality and may be summarized as follows:

  • The post-1958 social situation must be understood within the general context of the “tying up of Iraq in the course of the nineteenth and present centuries to a world market anchored on big industry.”
  • The 1958 revolution was in essence a reaction by the classes and strata that suffered from “the structural changes and dislocations” generated by the integration of Iraq into the world trade network.
  • Elements issuing from the “middle classes” (or, more accurately, from those components of provincial or rural origins) played the leading role in the revolution and its related coups; and the effects of the revolution (as discernible in 1973) have been most propitious to the growth of these classes.
  • The roots of large-scale private property were largely severed during the first post-revolutionary decade. (This premise is either no longer true or did not even then correspond with the facts.) The state acquired virtual financial autonomy from society, flowing from its huge oil income, and the great increase in its size and power and in its capacity to determine the direction of social change and the distribution of the national income. For these reasons, “the relationship of individuals or groups to property has receded in importance and control of the apparatus of government has become the determinant of social action more conclusively than ever before.”
  • The groups that seized the state apparatus after 1968, while stemming from the rural middle class, had also a partially clannish and regionalist character. (Most of the dominant Baathists spring from the clan of Albu Nasir or the region of Tikrit or, more generally, from the Arab Sunni northwest.)
  • The “middle class” aspect of the Baathist regime may be no more than a transient aspect. From the “most advantaged” families that form its social base, “a new upper class may be differentiating itself at present. About this, as about the related foregoing points, it is difficult to be more definite, inasmuch as Iraq is in a structural stage that is still in the process of development.” I am stressing this point because of Khafaji’s suggestion that I was insensitive to the dynamism of the elements of the social structure.

Any decade-old view of an essentially fluid situation has to be revised, but it is possible, I think, to understand within its framework the developments described by Khafaji. For example, the growth of the parasitic class of contractors, brokers, and profiteers is not primarily explicable in terms of the intrinsic tendencies of local capitalism. Part of the explanation lies in Iraq’s deeper involvement, particularly after 1973, in the meshes of the world market. But the principal factor, as emerges from Khafaji’s own study, was the administrative action of the group controlling the state apparatus and many of the main beneficiaries of this action came precisely from the elements whom I described as the “most advantaged” families constituting the social base of the regime. As Khafaji brings out, seven out of the 31 big contractors are from the Albu Nasir clan and six others business partners of these seven. Moreover, 15 stem from the Arab Sunni northwest.

The figures for the progress of the enterprises of the industrial bourgeoisie between 1968 and 1981 do not appear to substantiate the view that it has received a big push. The number of the industrial enterprises of both the private and mixed sectors grew by only 3.7 percent and their employees by only 6.5 percent. It is true that the value of their sales increased sixfold but, as the figures for wages suggest, much of the increase could be attributed to the impact of inflation. (Khafaji pointed out that the average cost of capital formation increased threefold over the period 1973-1976.) It appears that the industrial bourgeoisie remains essentially a middle-scale bourgeoisie.

Khafaji reproaches me for “overlooking the underlying mechanism through which Iraqi capitalism was expanding and becoming dominant.” But the evidence available to me at the time I wrote could not be interpreted in the sense of a “flourishing” of capitalism: the capitalists’ share of the urban national income (the shares of profit and interest, for instance) declined from 33 percent in 1956 to 26.2 percent in 1969.

I nowhere maintained or implied that the expansion of the intermediate strata was “a step towards ‘uprooting’ private property” or suggested that private property was identical to “feudal” property. Middle-sized property is private property and in Iraq for many decades now has rested on capitalist foundations. If unhindered, it has a tendency to grow into large-scale property. The Baathists have, from their very beginnings, viewed “ownership and inheritance” as “natural rights.” But initially they appeared to be hostile to the big proprietors of both city and country and allowed for a sort of controlled capitalism. At some point in the first half of the 1970s they shifted course.

I may have gone too far in affirming that “the social power of private large-scale property has been uprooted.” I was, of course, referring to the social power of the big landowners, big merchants, and the relatively few big industrialists of monarchic times. Obviously this formulation, if congruent with the facts then known to me, has to be revised in the light of new circumstances. But whether the new class of state contractors or the older mercantile and industrial segments of the bourgeoisie possess any genuine autonomous social power has yet to be demonstrated. As is clear from the opening passage of Khafaji’s essay, the language with which Saddam addressed the group of contractors at the Presidential Palace on July 7, 1983 was the language not of a servant but of a sovereign.


[1] In Samih Farsoun, ed., Arab Society: Continuity and Change (Dover, NH: Croom Helm, 1985). Figures are from the Baath Party, Central Report of the Ninth Congress, June 1982, p. 145. [Arabic] [2] Al-Thawra, August 22, 1983.

How to cite this article:

Hanna Batatu "State and Capitalism in Iraq," Middle East Report 142 (September/October 1986).

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