Abstract
In the last years of Pahlavi II's rule, Iran was facing many economic challenges, among which inflation and high prices were the most important. This article examines the policies adopted by the Pahlavi government to curb these issues in the city of Mashhad. By using historical data and archival documents, an attempt has been made to provide a detailed picture of the approaches and measures adopted by the government, as well as the reactions of trade unions and marketers of Mashhad to these policies. The article also analyzes the consequences of these policies on the local economy and their impact on people's daily lives. The results show that while some of these measures temporarily managed to control prices, they could not solve economic structural problems in the long run, and in some cases they may have even led to the escalation of inflation and social discontent, and even the efforts of the struggle headquarters Despite the efforts made, it was not successful in controlling these problems.
Keywords: Guilds, price gouging, inflation, Khorasan, newspapers, Second Pahlavi.
 
Introduction
In the final years of the Pahlavi regime, particularly during the rule of Mohammad Reza Shah Pahlavi, Iran faced significant economic challenges, with inflation and price gouging emerging as critical issues. These problems were not only national in scope but also deeply affected local economies, especially in major cities such as Mashhad. The government attempted to address these challenges through a series of policies aimed at curbing inflation and controlling rising prices. However, these measures often failed to resolve the structural economic problems and, in some cases, exacerbated public discontent. 
The article explores the policies adopted by the Pahlavi government in its efforts to combat inflation and price gouging in Mashhad, one of Iran’s most important cultural and economic centers. By examining historical data and archival documents, it provides a detailed analysis of the approaches taken by the government, the reactions of trade unions and merchants in Mashhad, and the consequences of these policies on the local economy and people's daily lives. 
One of the key aspects discussed is the implementation of "Article Fourteen" of the White Revolution, which was issued in 1975 (1354 in the Iranian calendar) to strengthen consumer protection, regulate the distribution of essential goods, and penalize hoarders and profiteers. Despite the government’s attempts to enforce price controls, establish regulatory committees, and deploy student volunteers to monitor markets, these measures proved largely ineffective in addressing long-term economic instability. 
The article also highlights the tensions between the government and local guilds or trade unions, which often resisted state interventions. Many merchants found ways to circumvent regulations, leading to artificial shortages and further price increases. Additionally, the reliance on punitive legal measures—such as heavy fines, arrests, and military court referrals—failed to address the root causes of inflation, which included oil dependency, uncontrolled budget expenditures, and an undiversified economy. 
Ultimately, the study reveals that while some government measures temporarily managed to control prices, they could not solve the deeper structural issues within Iran’s economy. In many ways, these policies contributed to growing social unrest and played a role in the broader political upheaval that culminated in the 1979 Islamic Revolution.
Materials & Methods
The research is based on historical and archival documents, newspapers, legal texts, and memoirs from the final years of the Pahlavi regime, particularly focusing on Mashhad’s economic conditions in the 1970s. Key primary sources include official records from the National Archives Organization of Iran (SAKMA), such as decrees related to consumer protection, price controls, and anti-profiteering laws like Article Fourteen of the White Revolution and the Law on the Regulation of Distribution of Essential Goods. Persian-language newspapers such as Aftab-e Shargh , Ayandegan, Ettela'at , Khorasan , and Rastakhiz provided detailed reports on market conditions, public reactions, and enforcement efforts. Memoirs of political figures like Amir Asadollah Alam and Mohammad Reza Shah Pahlavi, along with academic works thesis on market supervision institutions were also used to contextualize the socio-economic tensions and policy failures of the era. 
The study employs a qualitative historical methodology, combining documentary analysis, discourse analysis, and comparative-historical approaches. Documentary analysis was used to reconstruct government policies and their implementation through cross-referencing archival records and press coverage. Discourse analysis helped interpret how inflation and price gouging were framed in official statements and media narratives. A comparative approach was taken to assess how national policies played out differently at the local level, especially in Mashhad. The research critically evaluates the effectiveness of top-down interventions such as price controls, punitive legal measures, and student-led market surveillance, while highlighting the structural issues—including oil dependency, budget deficits, and lack of market regulation—that undermined these efforts. This methodological framework allows for a nuanced understanding of the interplay between state control, market dynamics, and growing social unrest in the late Pahlavi period. 
Discussion & Result
The study reveals that the Pahlavi government’s efforts to curb inflation and price gouging in Mashhad during the final years of Mohammad Reza Shah’s rule were largely ineffective in addressing structural economic problems. Despite implementing measures such as price controls, legal penalties for profiteers, and the establishment of consumer protection committees—most notably through Article Fourteen of the White Revolution—the government failed to stabilize prices or restore public confidence. Inflation persisted due to deep-rooted issues including overreliance on oil revenues, unregulated market dynamics, and poor budgetary management. The reliance on punitive legal actions against merchants and producers, rather than addressing systemic flaws, created tensions between the state and local economic actors, particularly guilds and bazaaris in Mashhad. These groups, who traditionally played a central role in the city's economy, often resisted state interventions, leading to artificial shortages and further price increases. 
Moreover, the use of student volunteers and surveillance teams to monitor markets was met with public skepticism and merchant resentment. Rather than curbing inflation, these enforcement mechanisms sometimes exacerbated the situation by alienating key players in the distribution chain. For instance, reports from newspapers like Khorasan and Ayandegan indicate that many shopkeepers manipulated official price regulations by temporarily raising prices before announcing small discounts, misleading the public into believing that anti-inflation policies were effective. Additionally, the arbitrary enforcement of laws and the selective targeting of small traders while larger hoarders and distributors often evaded punishment undermined the legitimacy of government efforts. These inconsistencies fueled social discontent and eroded trust in the regime’s economic competence. 
Ultimately, the failure of top-down economic policies in Mashhad reflected broader national shortcomings in governance and economic planning under the Pahlavi regime. While short-term interventions occasionally led to temporary price reductions, they did not resolve underlying issues such as supply chain inefficiencies, lack of market transparency, or the monopolistic behavior of certain economic elites. Instead, these measures contributed to growing unrest among the urban middle class and traditional merchant communities, who felt increasingly marginalized by state policies. The analysis of archival documents and contemporary press coverage underscores how economic mismanagement and authoritarian enforcement strategies weakened the regime’s support base, setting the stage for broader political upheaval.
Conclusion
In conclusion, the Pahlavi government’s efforts to combat inflation and price gouging in Mashhad during the final years of Mohammad Reza Shah’s rule were largely ineffective in addressing the structural economic problems that plagued Iran. Despite implementing a range of policies including price controls, legal penalties for profiteers, and the deployment of student volunteers to monitor markets the government failed to curb rising prices or restore public confidence. The reliance on punitive measures rather than systemic reforms created tensions between the state and local economic actors, particularly guilds and merchants, who resisted state interventions. These groups, central to Mashhad’s economy, often found ways to circumvent regulations, leading to artificial shortages and further price increases. The failure of top-down economic policies reflected broader national shortcomings in governance, including overreliance on oil revenues, unregulated market dynamics, and poor budgetary management. 
Furthermore, the enforcement mechanisms put in place—such as the National Committee for Consumer Protection and the Headquarters for Combating Price Gouging—were inconsistently applied and often targeted small traders while allowing larger economic elites to evade accountability. This selective enforcement undermined the legitimacy of government efforts and fueled social discontent. Reports from newspapers like Khorasan and Ayandegan highlight how shopkeepers manipulated official price regulations by temporarily raising prices before announcing small discounts, misleading the public into believing that anti-inflation policies were effective. Additionally, the use of military courts and heavy fines against violators was perceived as authoritarian and unjust, further alienating key segments of the population. Rather than stabilizing the economy, these strategies deepened mistrust in the regime and contributed to growing unrest among the urban middle class and traditional merchant communities. 
Ultimately, the inability of the Pahlavi regime to effectively manage inflation and price gouging in Mashhad exemplified the broader economic mismanagement and political alienation that characterized its final years. While short-term interventions occasionally led to temporary price reductions, they failed to resolve deeper issues such as supply chain inefficiencies, lack of market transparency, and monopolistic practices. These failures weakened the regime’s support base and played a significant role in the broader political upheaval that culminated in the 1979 Islamic Revolution. The case of Mashhad illustrates how economic policy failures can erode public trust, intensify social tensions, and contribute to the collapse of an authoritarian regime.