ABSTRACT
In historical terms, Iran's military expenditures from the end of World War II to 1978 were not exceptionally high relative to total spending. When military production sets the parameters for the industrial sector as a whole, the product may be something more akin to "remotely-piloted butter" than to guns and butter. Civilian industrialization was affected in other ways, too, by the change in military priorities. Military imports were increasing at the same time that industrial demand for imported intermediate and capital goods was increasing. The problem of competition between the military and civilian industries was exacerbated by the fact that relatively few private sector firms were involved in military enterprises. Even though civilian industry was not invited to participate in producing all types of goods for the military, total industrial production still increased in Iran at the same time that military expenditures did. The timing of military purchases is also a potentially significant policy decision.
