I have legalized robbery
Called it belief
I have run with the money
I have a-hid like a thief
Rewritten history
With my armies and my crooks
Invented memories
I did burn all the books
– “The Man’s Too Strong” by Dire Straits, from their 1985 album Brothers in Arms
* * *
Following my initial shock over the invasion of Iran, during my research I stumbled upon the fact that the country has been experiencing hyperinflation for several decades, particularly since the Islamic Revolution in 1979.
Economics junkies know about the horrors of the Weimar Republic and Zimbabwe, but I had no idea about Iran. My fault.
Grasping the effect of hyperinflation is almost impossible unless you’re living it, and it’s even tougher to explain why it happens. Among experts (and so-called experts) a large variety of opinions exist regarding its causes and how to mitigate them.
Instead of looking at theoretical causes, I aim to illustrate the effects on the people of Iran. In my opinion, economics is more than numbers, models, and theory; it’s an attempt to understand and predict human behavior. In fact, I think economics is primarily about human behavior. The numbers just help explain it.
The data
Let’s see how Iran’s currency, the rial, has fared since 1979.
- In 1979, the exchange rate was 70 rials to 1 U.S. dollar, and the inflation rate was 10.49 percent.
- Over the prior two decades, there had already been significant inflation, ranging from a low of negative 0.39 percent (yes, deflation) in 1966 to a high of 27.29 percent in 1977. The average (not cumulative) rate from 1960 to 1978 was 6.58 percent. Not good, but not enough to completely destroy the economy. (For context, the Federal Reserve here in the U.S. has a stated goal of keeping annual inflation between 1 and 2 percent.)
- In 1980, one year after the revolution, inflation doubled to 20.60 percent.
- Over the next two decades, ending in 1999, the average was 21.87 percent.
- The highest recorded rate was for 1995, when inflation was 49.30 percent. (This means something that costs $100 on January 1 costs $149.30 on December 31.) Again, that’s just the rate for THAT year. Inflation compounds every day of every month of every year.
How did this affect the exchange rate? Whereas 70 rials equaled $1 in 1979, by 1999 it took 9,430 rials to get that same dollar.
High inflation has continued over the past 25 years, with most recent data as follows:
- 2019: 34.80 percent
- 2020: 36.50 percent
- 2021: 40.20 percent
- 2022: 45.80 percent
- 2023: 40.70 percent
- 2024: 32.50 percent
- 2025: 42.40 percent
Keep in mind, these are average rates assessed over the whole economy, but as we all know, different goods often undergo different rates of inflation, with goods like food, housing, and energy often having higher rates.
Let’s think about what effect that inflation since 2019 has had on an imaginary loaf of bread. For the sake of discussion, it costs $3. Applying Iran’s inflation rates to this $3 bread in 2019 works out as follows:
- 2019: $3.00
- 2020: $4.10
- 2021: $5.79
- 2022: $8.44
- 2023: $11.88
- 2024: $15.74
- 2025: $22.41
Notice how the rates of inflation are similar, but the actual cost of the bread increases exponentially. This is the compounding effect of inflation, otherwise called the cumulative rate. From 2019 to 2025, it stood at 647 percent.
Recall that wild change in the exchange rate noted earlier: 70 rials for $1 in 1979 inflated to 9,430 rials for $1 in 1999.
Solid current data is not available, but get this: as of October 2025, it now takes 1,150,000 rials to get just 1 U.S. dollar on the open market.
Obviously, this doesn’t mean the rial is getting stronger. It means it’s worth less and less, and it certainly doesn’t mean the Iranian people are getting more rials.
The human cost
As I said at the start of this column, I will not get into the reasons why this hyperinflation has besieged Iran’s people. In fact, the causes are too numerous. They would distract from my larger point, which is this:
Think about how suffering under such a regime from which you cannot escape would affect your mind.
Your sense of community.
Your sense of hope.
Your sense of self.
Your sense of time.
Why bother saving when your money won’t be able to buy anything you could possibly afford next year?
Why bother thinking about the future at all? Your children will not have a better life than you, and neither will theirs. They’ll never be able to own a home or a car. They may not even have enough food. They may resort to bartering or theft.
The only thing your future holds is more fear and more degradation from your own government. You will dread without ceasing.
If you’re unlucky to be old enough to remember how things used to be, you might find with each passing year of anguish how you wish you could forget. You think of your children and you’re a little bit happy that they don’t have those memories. Maybe their children will have no memories at all.
Totalitarian regimes depend upon the destruction of memories – and the invention of false ones.
One thing I know: despite all its faults, I appreciate the United States of America that much more.
Isaac Taylor is one of the owners of the Hamilton County Reporter, as well as the Circulation Director and page designer. You won’t find him anywhere online, so don’t bother looking. However, he welcomes your comments on his columns at ReadTheReporter.com.