The first Safavid king, Esmāʿīl I (907-30/1501-24), initiated a process of political and religious change in Persia that profoundly affected the economic structure. During the three centuries 1500-1800 the technology, organization, and ethnography of Persian agriculture, animal husbandry, manufacturing, and accounting underwent partial change.

In agriculture crops, cultivation methods, and the basic production unit, the village (deh) or hamlet (mazraʿa), remained largely unaltered. Production units functioned on several levels: On one level members might cooperate and occasionally organize common work projects (bona); on another an entire harvest might be pooled for the purposes of paying tax assessments. The traditional differences in production between villages located close to and far from cities remained characteristic of this period. In the immediate vicinity of cities farmers concentrated on produce for urban consumption: vegetables, fruit, and herbs (parsley, basil, tarragon, dill, etc.). Although rice was consumed at an increasing rate in the Safavid period, until the 19th century it was cultivated mainly in Gīlān and Māzandarān. Most rice consumed in Persia was imported from the Indus valley; indeed, seeds were also largely obtained from India, for the favorite rice in Persia (varieties of basmati) lost its germination potential after a few generations in Persia (see, e.g., Polak, II, p. 138; see BERENJ). The irrigation system also did not change notably in this period (see ĀBYĀRĪ). In Azerbaijan, on the Caspian littoral, and in river oases like Isfahan, Herat, and some towns in Transoxania dry farming (deym) or surface irrigation predominated. In most other areas underground aqueducts (qanāt, kārīz) provided water for irrigation.

Animal husbandry (including poultry and, in some areas, water buffalo) was practiced both by settled farmers and by nomads and seminomads, who alternated between summer (yaylāq) and winter quarters (qešlāq), herding especially sheep and goats but also horses and camels.

Two kinds of agricultural organization existed simultaneously. Sharecropping (mozāraʿa), in which the proprietor provided land, water, seeds, and the like and divided the harvest with the peasants according to agreement, can be traced back to the pre-Islamic period. Probably in the Saljuq period (see v, above) this system was overlaid by the system of eqṭāʿ, in which the beneficiary was granted the right to a specific revenue from a precisely defined district. Claims to revenues from the larger eqṭāʿs frequently led to appropriation of the land, which, though contrary to Islamic law, reflected actual power relations (Cahen).

In the 16th-18th centuries some urban artisans continued to produce items for the daily needs of the population, for example, tools and household utensils. Others concentrated on production of objects of art and luxury. Techniques and designs for such goods changed considerably, however, as the result of improved communications in this period; ideas from other regions of Persia and from outside the country flowed through Isfahan in particular and were adapted there. Such goods included jewelry, woven textiles and carpets, elegant objects for practical use, purely decorative pieces, and especially manuscripts, which accounted for a not insignificant portion of the luxury market. Architecture (meʿmārī) and architectural decoration were also an important part of the urban luxury economy. The development of court society during the Safavid period and its impact on the upper strata of urban society generated a strong demand for artistic and luxury goods, which reached its apex in the 17th century. At the same time, owing to the establishment of a royal monopoly for the export of luxury goods like silk, carpets, and eventually others, this trade assumed an international dimension. Eventually domestic and foreign demand led to decisive changes in production methods and organization (Ferrier, p. 484; Fragner, Camb. Hist. Iran, pp. 526 ff.).

The detailed economic history of the Safavid and subsequent periods must be viewed within the framework of the political economy. With every change of dynasty military supporters (ahl-e sayf), members of the bureaucracy (ahl-e qalam), and some religious leaders (ahl-e ʿamāʾem) had to be paid off. Soldiers were rewarded for proven loyalty in battle; bureaucrats and religious leaders required incentives in order to guarantee their future loyalty and their help in encouraging loyalty among the population.

In the first decade of the 16th century the Safavids took over the small Āq Qoyunlū states in the west and the remnant of the Timurid kingdom in the east. They thus had to deal with their predecessors’ differing systems of land tenure and taxation. The Āq Qoyunlū had ruled the lands of western Persia, Anatolia, and Iraq through a federation of Turkman tribes; the chiefs governed autonomously in return for collecting taxes for the central treasury and maintaining the military security of the kingdom. This system of delegating power had been known by the Mongol term soyūrḡāl since the 14th century, when it was introduced from Central Asia (Doerfer, Elemente I, pp. 351-54; see v, above). It essentially resembled the eqṭāʿ system, with the differences that the autonomy of the holder (ṣāḥeb-e soyūrḡāl) was defined in the initial grant and that the soyūrḡāl could be inherited (Busse, p. 98; Petrushevskiĭ, 1949). The primary advantages of this system for the state were predictable revenues and assurance of clear title to the land. The soyūrḡāl was also the typical form of land tenure under the Timurids (Fragner, Camb. Hist. Iran, p. 507).

Other forms of land tenure, developed from the “classical” eqṭāʿ, existed along with the soyūrḡāl. In particular there were annual salary payments in kind (often regulated by hama sāla contracts in the Safavid period), stipends for scholars (waẓīfa; Busse, pp. 112 ff.), and other honoraria. All were paid directly from specified tax revenues and districts (Kaempfer, p. 96; Schuster-Walser, p. 38).

In the reigns of Esmāʿīl I and Ṭahmāsb I (930-84/1524-76) the large soyūrḡāls that the Timurids and Āq Qoyunlūs had granted to their supporters were confiscated and dissolved. The Qezelbāš chiefs, who had supported the Safavids since the 15th century, were rewarded with new forms of land tenure, above all the toyūl, which differed from the soyūrḡāl mainly in not being hereditary. It represented a compromise between the “un-Islamic” soyūrḡāls and the religiously acceptable eqṭāʿ. During the 16th and 17th centuries the toyūl developed into the most common form of state land grant. Important Qezelbāš leaders, especially provincial governors (ḥokkām, beglerbegīs), received their appointments as toyūl, but in practice a few favorites found ways to pass their possessions and claims on to their heirs (see Fragner, Camb. Hist. Iran, p. 513).

High Safavid officials, particularly of the dīvāns, were paid from toyūl, supplemented by other salary entitlements and special tax assessments, like the rasm-e ṣāderāt, earmarked for the grand vizier (eʿtemād-al-dawla; Taḏkerat al-molūk, tr. Minorsky, pp. 85 ff.). Salary payments and bonuses were freely granted, presumably to ensure the loyalty of the recipients. Toward the end of the Safavid period, however, these payments had come to absorb such a large proportion of the tax revenues that little was left for other purposes. For the salaries of administrative officials in religious institutions the soyūrḡāl was continued, so that this originally un-Islamic system took on a pronounced Islamic connotation in the Safavid period. In the popular language of the 18th and 19th centuries soyūrḡāl also came to refer incorrectly to waqf land (Lambton, Landlord and Peasant, p. 115; Chardin, VI, p. 65).

A special form of land use in the Safavid empire was the so-called yūrd (Doerfer, Elemente II, pp. 132 ff.), in which a Qezelbāš tribe was granted a defined territory for its migration routes. In the 16th century the delineation of individual yūrds helped to avoid conflict among powerful tribes (aymāq) like the Šāmlū, Rūmlū, and Ostājelū. The assignment of a yūrd was not necessarily permanent; a Qezelbāš tribe, if assigned a different yūrd, could be forced to leave its accustomed pastures and sometimes to move a long distance. Such redefinition of yūrds often met with resistance from the affected tribes. Nevertheless, Shah ʿAbbās I (996-1038/1588-1629) successfully reassigned yūrds on the periphery of the empire to the large Qezelbāš tribes, an important precondition for establishment of a centralized administrative apparatus for provinces taken over as crown property (see below).

The main burden upon both agriculture and manufacturing was the tax system. At the beginning of the 16th century the prevailing system of the former Il-khanid empire and the ūlūs of Chaghatay, though ultimately of Islamic origin, had been so altered by Mongol and Transoxanian traditions that public complaints about its antireligious character had become widespread. It was the Mongols who had largely succeeded in replacing taxes in kind with cash payments, which led to forced sale of agricultural products at prices set by the government, usually well below market levels; even the top market prices were set (tasʿīr al-ajnās) daily by urban officials. Sometimes a pious ruler or one wishing to seem so would abrogate “un-Islamic” taxes, but generally such measures did not remain long in force, for powerful officials thus lost income (Fragner, Camb. Hist. Iran, p. 534; Hinz, 1950, p. 188; Horst, p. 306). Traditional Islamic taxes like the ḵarāj, zakāt, ʿošr, and jezya had on the whole become obsolete. Jurists frequently tried to establish analogies between these theoretical taxes and those actually levied, but their efforts had little effect on the fiscal policies of the successors to the Mongol empire.

In the 16th century the Safavids basically continued the tax system codified under Ozun Ḥasan Āq Qoyunlū (Barkan; Hinz, 1950). It was characterized by the concept of māl o jehāt o wojūhāt: direct, indirect, and supplementary taxes, the last including additional duties, fees, and percentage surcharges (tafāwot) on taxes already in place (Fragner, Camb. Hist. Iran, p. 536). A series of innovations was introduced by Shah ʿAbbās I at the beginning of the 17th century in an attempt to standardize the tax system; they remained in effect until the end of the 18th century. Agricultural crops were taxed directly, in a fashion similar to the traditional ḵarāj. In addition to an assessment comparable to the zakāt, there were a tax on livestock (resembling the dread qobčūr of Mongol origin, which ʿAbbās replaced with the milder čūpānbegī); the poll tax (sar-šomārī, ḵāna-šomārī, rasm-e ojāq), which was particularly offensive to Muslims; the doubled (or higher) tithe (ʿošr; panj-yak); and a series of additional levies and percentage surcharges on existing taxes. Labor (bīgārī; šekār), riding animals for the army, accommodations and provisions for traveling military and officials, and other special levies (šeltāqāt, soyūrsāt) were also required (Petrushevskiĭ, 1960).

At the beginning of the 16th century taxes on manufacturing and trade, the so-called tamḡās, drew particularly strong criticism on religious grounds. They included canonically illegal tolls on the roads and at city gates (bāj), sales taxes, and the like. In 972/1565 the tamḡās were abolished after the Hidden Imam appeared to Ṭahmāsb in a dream, but they were reintroduced in the decade and a half of economic turbulence after his death (Fragner, Camb. Hist. Iran, pp. 540-44). Ṭahmasb’s move was the last by a Persian ruler attempting to “re-Islamicize” the tax system. From about 1600 religious critics kept silent on the un-Islamic aspects of the reformed financial system, and the public put up with taxes that did not conform to Islamic law.

The collection of taxes from peasants and artisans was organized through corporate bodies, the village units and professional guilds (aṣnāf) respectively; there were parallel structures in minority religious communities (Ashraf, pp. 318 ff.; Fragner, Camb. Hist. Iran, pp. 529 ff.; Keyvani). For example, taxes were assessed collectively on an entire craft guild in a town or quarter. The members elected elders (rīš-safīds) as their spokesmen, led by the naqīb (the kadḵodā in the countryside), who was responsible to the government kalāntar. The kalāntar and the rīš-safīd negotiated the assessment of taxes on the corporate body and the rīš-safīds allotted the amount among individual members.

ʿAbbās I had undertaken a comprehensive centralization of the empire. The political goal was to liberate the crown from military dependence on the Qezelbāš tribes. A standing army, probably modeled on the Ottoman example, was to be recruited largely from among the ruler’s private slaves (ḡolāmān-e kāṣṣ), primarily Caucasian Christians. In order to fund this plan, the finances of the empire were divided. A central administration for crown properties (sarkār-e kāṣṣa-ye šarīfa) was created parallel to the supreme dīvān (dīvān-e aʿlā), and entire provinces were designated crown property; from mid-century no portion of this territory could be designated as a yūrd. Taxes from crown property were not to be used for toyūl or similar purposes but were to be deposited in the shah’s treasury, in order to finance the new standing army, the administration of crown properties, and the development of the court into the central institution of empire (Fragner, Camb. Hist. Iran, pp. 521-24; Röhrborn, passim).

As a result of these changes, the court played an ever greater role in the Persian economy in the 17th century. The shah increasingly engaged in foreign trade in luxury goods, exercising monopolies of both production and export trade. The best-known example was the production, processing, and export of silk. The shah withdrew silk from the internal market, granting exclusive commercial concessions to Christian agents (mostly Armenians) and to European companies and traders (Busse, p. 138; see DUTCH-PERSIAN RELATIONS). Royal prestige also dictated a more sumptuous courtly life, exemplified by the elevation of Isfahan to the status of capital city and Safavid royal residence (at an indeterminate date near the beginning of the 17th century). The economic life of the entire city was directly or indirectly dependent upon the court. In the bāzārs court agents enjoyed priority; the best artisans were incorporated into royal ateliers (boyūtāt-e salṭanatī). The beautification of the city in the following decades, the evolution of a courtly life-style, the expense of administering crown property, and the establishment of a standing army absorbed much of the economic potential of the empire.

As a result of increasing demands for revenues taxes were continually raised throughout the 17th century, particularly supplementary taxes and surcharges. Furthermore, toward the end of the century, as demand for revenues continued to rise, the tax base was shrinking. The government thus resorted to tax farming (moqāṭaʿa), auctioning the right to collect taxes to private individuals in exchange for cash payments. This practice led to further shortfalls in collection of revenues allocated for specific purposes. For example, Solaymān (1077-1105/1666-94) raised road tolls (rāhdārī), in order to obtain revenues for the upkeep and security of roads, bridges, and floodgates, yet these amenities fell further into disrepair, and the entire commercial traffic system faced a long-term crisis (Emerson and Floor, pp. 322-23; Taḏkerat al-molūk, tr. Minorsky, p. 76; Schuster-Walser, pp. 28 ff.).

Frontier provinces were entrusted to Qezelbāš tribal warriors under dīvān administration. Governors were overwhelmingly recruited from among Qezelbāš leaders, and the tribes had their yūrds in these provinces. The toyūl system of salary payments from tax revenues continued without alteration (Fragner, Camb. Hist. Iran, p. 523). Crown-property administrators were, however, appointed to crown provinces for limited periods as “wazīrs,” during which they strove for personal enrichment while exacting as much as possible for the crown. Their actions soon led to an economic crisis for the population, ultimately reducing production and thus revenues. The separation of crown from dīvān administration proved impractical in the long run, however. Already in about 1640 the system of independent management of crown lands had been undermined. Provinces like Fārs with great productive capacities could no longer be maintained as crown property and came back under the dīvān. It became impossible to continue exorbitant cash payments to administrators of crown property, and it was necessary to lease toyūls and soyūrḡāls in the crown provinces. Toward the end of the 17th century the true crown properties (ḵāleṣa) had become severely restricted (Röhrborn, pp. 131 ff.).

The enumerated drains on crown revenues were exacerbated by investment in royal endowments (awqāf-e ḵāṣṣ), for example, to finance construction of the largest Shiʿite pilgrimage center in the Safavid empire, at Mašhad. Such endowments also supported the Safavid family shrine at Ardabīl and paid for substantial improvements in caravanseries, bridges, dams, and other infrastructure (Fragner, Camb. Hist. Iran, p. 527).

The disintegration of the Safavid empire was not caused solely by military defeat. The Afghan usurpation should be seen in the context of an economic crisis brought about by royal mismanagement and lack of policy. The separation of the sarkār-e ḵāṣṣa-ye šarīfa had been successful for the first twenty or thirty years, but, unlike the Mughals in India and the Ottoman Turks, the Safavids had no opportunity for territorial expansion to help finance the growing needs of the court. The creation of crown provinces and their administrative apparatus can be considered a “forced internal expansion,” but the initial successes faded toward the end of the 17th century. Finally, the marginalized Qezelbāš warriors had become alienated from the ruling house; neither they nor the standing army could withstand the Afghan attack on Isfahan in 1135/1722.

The collapse of the Safavids provoked a long-term crisis in Persia, not only in the political and military spheres, but also in the economy. Isfahan lost its leading position, and in the 18th century Persian politics was characterized by a revival of tribalism, a reversal of the centralizing tendency of the 17th century. After a decade of insecurity the leader of the Afšār tribes (see AFSHARIDS) seized the crown and assumed the name Nāder Shah (1148-60/1736-47). He did not intend to restore the Safavid empire but, clearly distancing himself from the Safavid tradition and its religious associations, contemplated the creation of a great empire like that of Tīmūr in Khorasan, the yūrd of the Afšār tribe. He moved the capital from Isfahan to Mašhad. It is clear from these measures that his entire conception required priority for tribal military might.

Nāder Shah’s economic policy, following the traditional pattern, included redistribution of claims to resources among his own supporters and particularly financing of his planned military expeditions. In a reversal of Safavid religious policy he confiscated waqf properties, which were incorporated as raqabāt-e nāderī under the administration of the dīvān (Lambton, Landlord and Peasant, p. 132). His expedition to India in 1151-52/1738-39 and the plundering of Delhi marked the beginning of the end of Mughal rule; the booty far outweighed the cost of the military undertaking. Similar goals motivated Nāder Shah’s expeditions into Transoxania.

The resurgence after Nāder Shah’s death of tribal rivalries between the Qezelbāš Qajar, whose yūrd encompassed the region around Estarābād (Gorgān) and the southern foothills of the Alborz between Fīrūzkūh and Shah ʿAbd-al-ʿAẓīm, and the Afšār are reminiscent of the Qara Qoyunlū and Āq Qoyunlū rivalries of the 15th century. Nāder Shah’s successors increasingly limited their political interests to the internal affairs of the Afšār and a few smaller allied tribes. From Khorasan to Azerbaijan fighting between the Qajars and the Afšārs continued until the 1780s, while in southern Persia there were attempts at a “Safavid restoration.” These efforts were brought to an end by the accession of Karīm Khan Zand (1163-93/1750-79), a Lor tribesman. He established his residence at Shiraz, clearly modeling his palace quarter on that of Isfahan, though on a smaller scale (Perry, 1979, passim; Lambton, Landlord and Peasant, p. 133).

Nāder Shah had completely ignored the interests of agricultural producers and artisans, and in the subsequent period of unrest the government provided no stimulus to production in the cities or the countryside. Nevertheless, as the rulers in this period were generally weak, producers were able to exploit opportunities for autonomous economic development. Karīm Khan Zand, on the other hand, clearly considered improvement in the economic affairs of the settled population an important political goal. His policies also attracted Western commercial interests, particularly those of the British. His successors, however, did not continue his efforts.

In the meantime the Qajars had seized political control in the north, and under the leadership of Āqā Moḥammad Khan they had also completed the conquest of southern Persia by 1189/1775. The economy of the country was weak on all levels and had clearly declined ever since the last years of Safavid rule. Nevertheless, reunification of the country under the Qajar dynasty provided the impetus for new economic development.



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(Bert Fragner)

Originally Published: December 15, 1997

Last Updated: December 8, 2011

This article is available in print.
Vol. VIII, Fasc. 2, pp. 133-138