Summary
Overview
This Planet Money episode examines the 47-year history of U.S. sanctions on Iran through three key economic moments, exploring how sanctions have shaped Iran's economy and contributed to recent massive protests. The episode reveals how sanctions, while intended as a non-violent alternative to war, have created immense suffering for ordinary Iranians while enriching powerful regime-connected entities, and questions whether they achieve their stated goals.
The January 2025 Protests and Crackdown
In December 2024 and January 2025, economic desperation sparked by currency collapse and inflation drove massive protests across Iran. Ali, visiting Tehran, witnessed egg prices jump 30% in weeks and joined protests where people chanted 'Down with Dictator' while cars honked in support. The moment felt hopeful and unprecedented in scale, but the regime responded with brutal violence, killing an estimated tens of thousands of protesters and imprisoning thousands more, crushing hopes for change while demonstrating the human cost of decades of economic pressure.
- Economic hardship triggered protests - egg prices jumped over 30% in just weeks during Ali's December 2024 visit
- Opposition figure Reza Pahlavi urged Iranians to 'go for a walk' on January 8th - code for joining protests
- Ali witnessed unprecedented numbers of protesters across Tehran, with cars honking in support
- The Iranian government claimed 3,000 killed, but independent observers estimate tens of thousands died
" I cannot believe I'm sitting at the restaurant and no one is wearing hijab. They were riding in motorcycle bikes. Women were not allowed to ride motorcycle bikes, but they were choosing to do it. "
" They don't have much to look forward to. Basic human rights are not there. That's why most of the people that now you see their photos, most of the people that have been shot are the younger generation because they're fearless. "
" There is no way that things can go back to normal. "
The Revolution and Birth of Economic Isolation (1979)
After the 1979 Islamic Revolution overthrew the U.S.-backed Shah, Iran's new leaders debated how to structure their economy and relationship with the West. The U.S. embassy hostage crisis and subsequent sanctions radicalized this debate, leading Iran to write economic isolation directly into its constitution. This foundational moment set Iran on a path of protectionism and opposition to foreign investment, deliberately cutting itself off from global trade while peer countries were benefiting from it.
- Political economist Iva Leila Pesaran discovered in Iran's National Archives how the 1979 hostage crisis radicalized constitutional debates about foreign investment
- Iran's new constitution explicitly forbade foreign concessions, going full protectionist in response to U.S. pressure
- Iran's economic identity was created in opposition to the U.S. and West, setting it apart from peer countries during a period of growing global trade
- The devastating eight-year Iran-Iraq war made surviving with a closed economy even more difficult
" It changes the mood of the room. And it's like you can see it's like this flashpoint where it sort of could have gone in a slightly different direction. "
" Their whole economic identity was created in opposition to the U.S. and the West. "
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