Begin-Sadat Center for Strategic Studies Iran has made impressive human welfare gains in the last two decades under the Ayatollahs. These achievements have tapered off just as expectations rose after the signing of the nuclear deal and might even be in reversal, which may explain the social unrest in the country.Karl Marx famously predicted that the workers in the industrial powerhouses of England and Prussia would be the first candidates for the proletariat revolution. He based his prediction on the assumption that people rebel when they get poorer. He was wrong, as the race riots in the United States in the 1960s proved. They took place in New York and Los Angeles, where life for Afro-Americans was getting better, rather than in the Deep South, where they were getting worse. An opposing theory based on the race riots claimed instead that people tend to rebel most when there’s a downturn after a prolonged period of improvement in their standard of living. Along with that improvement come rising expectations that are abruptly shattered by an economic downturn. It is at such a juncture that the prospects for rebellion and revolution are highest.Not only is this the dynamic of speculative bubbles, it is the story of the Iranian Revolution, the First Intifada, and to a lesser extent, the so-called Arab Spring revolutions in Egypt and Tunisia. They were all preceded by long economic growth and then a leveling, if not a reversal, in economic fortunes The most famous, in Iran, occurred after years of oil-generated economic growth, coupled with the Shah’s white revolution that tried to make sure that the benefits reached even the most isolated villages. But the revolution only occurred after the tapering off of oil prices in 1976 due to a mild recession in the advanced industrialized states. It was made by the middle class brought into being by the Shah’s reforms and good usage of the country’s oil wealth. The BBC ran extensive interviews with some of these protesters who brought down the Shah 30 years later, most of whom belatedly thanked the Shah for educating and training them and expressed deep regret for their role in his downfall. The Islamic Republic of Iran is castigated for ruling poorly. This flies in the face of the evidence. Below is a chart that plots Iran’s improvement over the years as measured in the Human Development Index, compiled by a reputable professional agency of the United Nations. The HDI is a compilation of three indices for most of the member states in the UN: national income per capita, educational attainment and life expectancy. There is usually a strong correlation between these three measures with the countries of northern Europe, North America and Australia with the highest composite score. As one can clearly see from the graph, Iran has seen a vast improvement in two of three of the indices, with much more modest improvement for the third, national income capita, but improvement nevertheless. The fact that national income gains tails after the rise in educational attainment and educational attainment in fact points to efficient use of government resources since income can be seen as an input and the latter two indices, the outputs of the State. So vast has been the improvement in HDI, that Iran ranks today 60 out of 189 states and is designated a “high development” country.TO CONFIRM that this is not false number crunching, I follow the experience of “professional” travel bloggers on the Internet who visited Iran (as well as many other countries). The vast majority of these non-political but discerning individuals rate Iran highly. They not only write about its vast natural beauty, the magnificent building sites and archaeological wonders as one would expect of a country that was a cradle of great civilizations and dynasties for thousands of years, a hospitable population and excellent cuisine, but of excellent inter-city trains and buses, good highways, dependable electricity and adequate Internet and phone communication as well – dimensions that indicate an adequate if not well-governed country. There is, of course, occasional reference to the negative aspects of political life in Iran, like the mandatory covering of hair.Getting back to the HDI chart that between 2015 and 2017 there is a leveling off in all three indices. This was exactly the period of rising expectations in the wake of the signing of the nuclear deal, much of it fed to the public by the Khatami government in its fight against the hard-liners who opposed the deal. The government promised the people economic improvements, which did not materialize. One can plausibly assume given the force of the American sanctions since 2018 in reducing Iran’s oil exports by over half, from which almost 40% of the revenue for the state is derived that the data for 2018 and 2019 will even show a reversal in the curve. This is the classic prescription for unsettling times.The regime’s woes hardly end there. The social unrest in Iraq and Lebanon, much of it leveled against Iranian involvement in domestic affairs, means that the Iranian proxies will have a harder time milking Iraqi and Lebanese government revenues to finance their activities, and demands by organizations like Hezbollah for increased funding from Iran to provide the shortfall. The Iranian public is deadest against it, placing the Ayatollahs between the rock and the hard place.Despite the robustness of the theory, there is no certainty over what will happen. The Ayatollahs can change course to engage Trump by moving to scuttle the nuclear process which might change the country’s economic fortunes. But then again, Iran’s leaders can tread the route taken by North Korea and brutally suppress its population.It is a difficult decision. North Korea has neighboring and powerful China backing it. The Ayatollahs are much more on their own, even with their many guns and gun-wheelers at their disposal.The writer is a professor in the departments of political studies and Middle Eastern Studies at Bar-Ilan University.