Iran's latest bout of economic protests has ceased to be reactive spasms of discontent triggered by the newest price shock and currency collapse. They have become something rather more persistent and worrying for Tehran's authorities: the steady drumbeat of a population whose resilience has been ground down by chronic inflation, evaporating purchasing power and the suffocating effects of US and European sanctions.

In recent weeks, something curious has occurred in Iran. The Pezeshkian administration appears to have discovered what might charitably be called political common sense. Rather than reflexively reaching for the riot shield and rubber bullet, officials have opted for something more radical: sitting down and listening - so far in the main. It is early days, and scepticism is needed in its shedload. But this administrative shift represents at least a tentative acknowledgement that the old playbook- crush first, ask questions never - has proved spectacularly counterproductive, well, at least in Tehran this time. Smaller regional government officials may not have got the memo, considering the rising death toll far from the capital.

This evolution stems from two sources. The first is the temperament of those now in office, Doctor Pezeshkian, who seems less inclined towards thuggery than some of his predecessors; perhaps his Hippocratic oath has something to do with the so-far muted response from his perch. The second is institutional memory. Tehran has potentially learnt, through painful repetition, that hammer-fisted crackdowns generate costs - human, economic and diplomatic - that far outweigh any short-term gains in suppressing dissent. Previous episodes have damaged Iran's standing abroad while solving precisely nothing at home.

The nature of recent protests reinforces the wisdom of this recalibration. Demonstrators are not advancing grand ideological projects or calling for revolution. They are complaining about groceries they cannot afford, wages that no longer stretch, and the grinding indignity of watching their living standards deteriorate month after month. These are economic grievances rooted in quotidian reality. Addressing them through dialogue rather than detention is not enlightened statesmanship. It is baseline rationality.

Yet the government's newfound fondness for conversation must extend beyond its own ministries. Iran's institutional landscape is Byzantine, with overlapping power centres that do not always sing from the same hymnal. If one branch pursues engagement whilst another deploys paramilitaries, the result will be policy incoherence that satisfies nobody and exacerbates everything. This is potentially where Pezeshkian comes unstuck, despite his best efforts to deal with the situation rationally. He is not in charge of the other tentacles of the Islamic Republic’s system. Ironically, the system was designed this way to survive shocks if one of the power arms fails.

More fundamentally, talking can only achieve so much. Iran's economic malaise is not the product of a misunderstanding that can be cleared up over tea and biscuits. It stems from structural dysfunction, international isolation, and American sanctions that have throttled the economy since the revolution's inception in 1979.

Without progress on these fronts - particularly in foreign policy, where rapprochement with the Trump administration remains the elephant in every room - even the most earnest domestic dialogue will prove an exercise in futility. Trump’s latest threats on January 2 are not helping the current president in Tehran defend his rational response to the protests.

Herein lies the government's dilemma. It can engage sympathetically with protesters, explain its constraints with admirable transparency, and demonstrate genuine responsiveness to grievances. But unless it tackles the root causes of economic distress, it is merely rearranging deck chairs on the Titanic, to use a cliché. And the root causes are largely external: sanctions relief requires diplomatic manoeuvring that Tehran has thus far proved either unable or unwilling to execute, the latter due to the design of the system again. With the likes of Rafsanjani now dead and gone, the realpolitik segment of the power structure was done away with many years ago, with the hardliners consolidating their power and worsening the economic situation with cack-handed precision.

The Pezeshkian administration must therefore face a test not merely of tactics but of strategic courage, or he and his so-called Reformist grouping may collapse in the face of hardliners with guns more attuned to taking on the masses. It's true to say that many in that group see the current president as more of a sitting duck than a decisive actor, even before this round of disturbances.

The system’s legitimacy rests increasingly on its ability to deliver not ideological inspiration but boring economic rationality, which it is not known for, given that it has done away with the best brains decade after decade. Having painted themselves into a corner for more than 40 years, has the system been able to shake bad habits? The next few days will tell. 

This is an external editorial and does not represent the news reporting of IntelliNews. The views expressed are those of the author and do not necessarily reflect the position of bne IntelliNews Group.