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The inaugural session of the "Barriers to Entrepreneurship in Iran's Economy" series, which focused on the challenges posed by government-imposed pricing policies, was held on Tuesday, September 29, 2025, at Saman Academy. Experts at the event discussed the repercussions of these policies, ranging from price distortions to production setbacks and driving investors away.
The Role of Pricing in Economic Systems
The session began with a presentation by Ali Mirzakhani, head of the Economic Studies Unit at Saman Academy. He explored the historical role of pricing within economic frameworks.
Mirzakhani highlighted theories on value and noted that over the past 150 years, economists have largely agreed on marginal utility theory. He stated, "The value of a product does not stem from its production costs; rather, because a product has value, resources are allocated for its production. Wealth and welfare increase only when goods enter the cycle of trade and exchange."
He added that prices result from processing scattered information by millions of economic agents. "Eliminating or suppressing prices renders rational economic calculations impossible," he explained. "Government-imposed pricing disrupts exchange ratios, distorts prices, and replaces wealth creation with arbitrage opportunities." Mirzakhani also warned against pseudo-scientific claims circulating in Iran's economic sphere. He emphasised that monetary expansion continues unabated and harms domestic production and consumer welfare.
Call for Dissolving Regulatory Agencies
Following Mirzakhani’s presentation, two specialized panels were convened. The first panel included economist Mousa Ghaninejad, Divar founder Hessam Mirarmandehi, and Mirzakhani himself. They examined the consequences of government-mandated pricing policies.
Ghaninejad remarked, "Price controls either stem from a lack of understanding of economic mechanisms or are employed as populist tactics." He traced the origins of these policies back to 1974 during an oil price surge when the Ministry of Commerce established price monitoring initiatives that eventually evolved into regulatory agencies like the Organization for Supporting Producers and Consumers.
According to Ghaninejad, these agencies have harmed Iran's economy rather than supporting it. "The first step toward economic freedom is dissolving these organizations," he argued. He stressed that eliminating such agencies would immediately lower prices without requiring additional measures.
Ghaninejad further explained that prices act as more than just tools for calculating profit and loss; they serve as an essential information system within economies. "Prices guide producers on what to produce, how much to produce, and at what quality level," he said. "For consumers, they indicate purchasing power. Government interference disrupts this system and leads to misguided decisions and imbalances in economic activities." He also highlighted social consequences such as deterring investors and entrepreneurs while benefiting vested interests who exploit manipulated pricing systems.
Intentional Economic Sabotage?
Hessam Mirarmandehi shared his experiences with price control policies in Iran’s digital economy sector during the panel discussion.
He questioned whether adherence to outdated economic theories was due to ignorance or deliberate sabotage. "A pessimistic view suggests some individuals may intentionally push destructive policies aimed at undermining Iran's economy." Ghaninejad echoed this sentiment by referencing instances during wartime when coordinated efforts appeared aimed at destabilizing economic structures.
Mirarmandehi reflected on periods of growth within Iran’s digital ecosystem between 2013–2014 when foreign investors showed interest but noted how subsequent restrictive policies drove stakeholders out of the market: "Media campaigns spreading false information about companies led to undervaluation compared to global benchmarks," he said.
He lamented that Iran has failed to produce even one unicorn startup over the past decade despite being a regional leader in earlier years: "Domestic and international investors now prefer directing their capital elsewhere due to harmful governmental interventions." Such actions have left Iran’s startup ecosystem stagnant amid workforce migration challenges.
Challenges of Pricing Policies for Startups
Mirarmandehi criticized regulatory mandates limiting company profits to 15% as absurdly restrictive: "Profit margins often adjust naturally based on market dynamics," he noted while recounting an instance where increasing ad rates reduced revenue for Divar—prompting price reductions instead.
He identified incomplete ecosystem development as a key obstacle preventing small businesses from thriving: "Startups no longer emerge due to limited timeframes or lackluster capital inflows alongside heightened emigration trends among skilled workers." Additionally highlighting managerial inefficiencies exacerbating failed reforms within Iran’s economy system-wide.
Mirarmandehi concluded by criticizing unrealistic salary caps imposed on government officials overseeing key reforms—arguing these conditions deter competent leadership needed urgently amid worsening crises across sectors ranging beyond housing markets alone.
