The elections in Iran, and the mass protests against fraud that followed, have revealed the deep divisions at the heart of Iran’s ruling class.
The country is internationally isolated, faces a growing economic crisis and is ruled by a faction associated with the “hardliners” who want to be the main beneficiaries of the privatisation of state-owned companies.
This faction has coalesced around president Mahmoud Ahmadinejad. They see his populist appeal as a bulwark against the deep discontent that is sweeping the country.
A second section fears that the widespread corruption at the heart of the system is undermining popular support for the republic.
They want the economy opened up and to strip power from those they believe are lining their own pockets.
This faction, that includes many senior figures in the religious establishment, has put its hopes in Mir Hussein Mousavi, who emerged as the main challenger to Ahmadinejad during the election.
Mousavi is an establishment figure. He was the country’s prime minister during the 1980-8 Iran-Iraq war. He played a key role in the rise of the Islamic movement following the 1979 revolution.
He is respected for keeping the economy afloat during the war, and is considered a safe pair of hands.
Mousavi lost power in 1989 when the post of prime minister was abolished. Throughout the 1990s he became associated with the rising reform movement, which wanted to limit the power of Iran’s new elite.
His goal was to steer Iran towards a neoliberal “opening up” of the economy.
Mousavi was widely tipped to run for the president in the elections in 1997. But he gave way to Mohammad Khatami, then a little known cleric.
Khatami won 80 percent of the vote as Iran’s people put their hopes for reforms in him.
Despite this, and his re-election in 2001, Khatami was unable to deliver. This left the movement that brought him to power demoralised.
Ahmadinejad won the 2005 election on a promise to root out corruption and ease the growing poverty among the mass of Iranian people.
He presided over a huge increase in the country’s wealth, resulting from a rise in the price of oil.
He used this money to widen his base among the urban and rural poor – even distributing free potatoes during this year’s election campaign.
But sections of the establishment accused him of squandering the oil wealth and failing to plan for the subsequent collapse in prices.
Meanwhile, many of his supporters were disappointed when he reneged on his promise to tackle corruption.
Ahmadinejad felt certain of victory in last week’s election. Early polls showed him polling double the number of votes of his nearest rival.
But the polls also showed the gap narrowing as the Mousavi campaign grew in strength.
Like Khatami, Mousavi promised widespread reforms, but also vowed to limit their scope.
His key promise was to make the finances of the government public. This was a threat to sections of the elite who have been creaming off Iran’s resources.
Mousavi advocates neoliberal policies as part of making the state-owned sector more “efficient”.
But these policies have little popular appeal. So Mousavi also promised sweeping social reforms.
He pledged to rein back the much feared morality police, which enforces strict rules on dress and behaviour.
He promised to open the top posts in government to women and “review” the laws that limit their rights.
He said he would bring the police under presidential control. At present the security forces are answerable only to the unelected supreme leader Ali Khamenei.
Mousavi and other reformers want to harness the growing disquiet in the country to oust one faction of the ruling class from power.
They want Ahmadinejad and the hardliners removed. But they also want to limit the scope of popular anger. Mousavi called on people to stay at home on Monday.
The danger for him and his allies is that this movement could quickly run out of their control.