This story originally appeared in Professor Glenn Diesen’s Substack on March 14, 2026. This shortened, edited version is shared here with permission.
The war in Iran, besides being dangerous, is also very interesting because it’s an example of asymmetric warfare. The US is obviously much more powerful, which is probably why there has been a significant amount of hubris: it entered this war with a lot of confidence and assumption of escalation dominance. Thus, we see that the Iranians are forced to fight with other means, including the ability to shut down the energy trade. And given that Iran also sees this as an existential threat—not just an effort to “liberate women” or something—they seem to be willing, or prepared, to shut down the global economy in order to avoid defeat.
I recently spoke with Professor Yanis Varoufakis, the former finance minister of Greece and a founder of DiEM25, the Democracy-in-Europe Movement, about where this war is heading and what impacts it is having on the global economy.
[Editor’s Note: The following transcript has been lightly edited for length and readability from the original full conversation, available here]
Glenn Diesen: Where do you see this war heading? Because it seems like everyone is betting everything on it, and I don’t see enough off-ramps for anyone.
Yanis Varoufakis: We must remember that this is not new. The United States has engaged in a series of asymmetric conflicts where it entered with immense confidence and exited, sometimes many many years later, with its wings clipped.
They invaded Afghanistan. It took them 20 years to be defeated, but they were defeated and they left with the Taliban—whom they had initially intended to eradicate with the original invasion—stronger than ever.
Iraq: “Shock and Awe.” George W. Bush walks in there, effectively takes Iraq in a day or two, declares victory on the aircraft carrier, if you recall, and then the attrition began [and continued] until, again, the United States was defeated.
I think the difference here is that the United States, if anything, faced a lot more opposition than it did in Afghanistan, in Iraq, in Libya, in Syria—countries that they devastated with ill intent from the beginning. The Iranian regime has been preparing for this. And it is quite interesting that they still are capable of striking Tel Aviv, striking American military bases in the Gulf area. And in the end, within a week or so, we now see that the United States government’s pain threshold seems to be much lower than that of the Iranian regime.
Glenn Diesen: If you look at the economics of this war, it also seems that, much like in Ukraine, the lesson is that industrial might is important, that one can’t rely on international supply chains anymore. It seems that the lessons from both Ukraine and Iran are that great powers need technological sovereignty, some supply chain security, and of course industrial might. Does this change our entire ideology now? Because, over the past decades, everything had to be free trade (i.e., if someone else can make your weapons, then you should outsource it). How do you think this is going to change the world?
Yanis Varoufakis: You make a good point. What followed the Vietnam War, after the early ‘70s and the demise of Bretton-Woods, was the era of financialization and neoliberalism—which, as you indicated, was an era during which the industrial foundations of the West were given away by Western elites, by Western ruling classes. They were shipped out. And then, essentially, they leveraged their financial sector. Now they are leveraging their Big Tech sector. They thought that they could get away without having an industry.
In the case of the United Kingdom, Margaret Thatcher—who actually led the neoliberal assault on industry in order to eradicate the trade unions, to defeat the working class, essentially, in a very nasty class war—was the first to pave the ground for this deindustrialization process and shipping out of industrial capacity to places like China, Vietnam, Southeast Asia, and so on.
Now the chickens are coming home to roost.
But I’m particularly surprised, Glenn, that Donald Trump fell for it. I would have thought, before the foolish decision to start a war against Iran without any exit strategy whatsoever, that he would try to do what he did in Venezuela: come in, do something really against international law, like abduct Maduro (or, in the case of Iran, kill Khamenei), then declare victory and go home. Because if he had just done that, then he would have been okay, in the same way that Venezuela, in the end, was just a very brief moment [after] which he could claim to have toppled a dictator.
But he didn’t do that. And I think that the reason why he fell into this trap of entering a war that is now sucking him in with devastating political effects on him is Israel. Benjamin Netanyahu proved yet again perfectly capable of dragging the United States government into a never-ending war, a permanent war, which is the strategy of Israel for the purposes of creating permanent insecurity in the mind of Israelis in order to constantly pursue another war in the region, whether it’s South Lebanon, or Yemen, or Syria, or now Iran. All that for one reason: to create a lot of noise, to have all Israelis hooked on warmongering and on this false notion that Israelis are fighting for their lives and for their survival. That false notion is necessary in order to continue the one thing that Netanyahu cares about, which is the annexation of the West Bank, the steady, permanent ethnic cleansing until there’s no Palestinian life left in Palestine (which, of course, goes hand in hand [with Israeli policy] since the days of Ariel Sharon, if you remember, with the conversion of Gaza into, first, the concentration camp it was and, now, the genocide site it is).
Let’s not forget that Trump, in his first term, successfully resisted Israel’s drive to co-opt him into a war against Iran. There was immense pressure on Trump, as there was on Obama and other American presidents, coming from Tel Aviv, coming from Israel, to unleash a war against Iran. Trump 1.0 resisted that, and very successfully.
How did he fall into the trap that he’s now dwelling within? Because there is absolutely no sense of why he’s doing what he’s doing. The only rational explanation, the only answer I can come up with, Glenn—and this is going to be the controversial part—is that Netanyahu had something on him, that Israel had some hold over Trump 2.0 that it didn’t have over Trump 1.0, and this explains why he got [involved], because there can be no other explanation.
You put it brilliantly when you said, “What were they thinking?” Did they really think that the Strait of Hormuz would remain open if they waged a never-ending bombardment campaign against Iran? So, in the absence of any other rational explanation of why they did this, the only conclusion I can reach is that Netanyahu had something on Trump, which he feared more than the quagmire in which he has now landed just before the November elections for Congress.
You mentioned the excuse that they are trying to “liberate women,” and this is a question that I think we have a duty to answer. Whether it is now or years ago when it came to Afghanistan, I feel I have a duty to answer when liberal imperialists say to me, “But what about the women, Yanis? You are condemning American imperialism but that was a solution for women, wasn’t it?”
No, it wasn’t.
The women of Iran do not need bombs coming out of F-35s being dropped upon them by, let’s not forget, a misogynistic, misanthropic, racist Washington administration—or, indeed, by the genocidal supremacists of Tel Aviv—to evoke the wonderful slogan of demonstrators (“Women, Life, Freedom”), especially after the murder of Mahsa Amini, the 17-year-old girl who died in custody in Iran for not wearing her hijab. The path to “Women, Life, Freedom” does not run through the smoking ruins of Iran. Gayatri Spivak, the philosopher, put it beautifully when she said that the notion that white, racist men will liberate Brown women by bombing them, their children, and their Brown men, and that this is going to be the path to their liberation from brown men—that is absurd.
Their liberation, the liberation of women in Iran—as in Afghanistan, as in Iraq before that—runs through the defeat of the very powers that have spent 70 years ensuring that Iran can never know peace or democracy. Remember the 1953 coup d’état that overthrew the democratically elected government of Mosaddegh? That was the CIA. So my point is that the people of Iran must first be liberated from the clasps of the hideous choice between the current regime and a fate that is worse than Iraq, Libya, and Syria combined, because this is what Netanyahu wants for Iran, and he’s the driving force in this. It’s not Trump. Trump has been corrupted for reasons we will find out about in 5, 10, 20 years. Netanyahu’s plan is to turn Iran into a failed state like Libya, like Syria. That is not going to mean the liberation of the women of Iran. We have to be very clear on this. This is a feminist point, I believe.
In the end, the United States hasn’t really changed much today. Do you remember, after My Lai in Vietnam, that American general who came out and justified the massacre of Vietnamese civilians by saying, “We had to destroy their village to save them from communism”? This is very much the same argument. “We had to kill those young girls in their school, bomb them to smithereens, turn them into a human pulp of flesh and bones and blood, in order to save women.” There is a continuity in the misanthropy of United States imperialism.
Of course the Iranian regime has been demonized. And I’m saying this as an opponent of theocracy. I’m saying this as a libertarian Marxist, as I call myself (to confuse people), and a feminist. But compare and contrast Saudi Arabia with Iran. Now, in which country do you think women are more oppressed? I would say it’s Saudi Arabia, and nobody’s thinking of bombing Saudi Arabia into smithereens. Indeed, Mr. Trump and his sons are doing brisk business in Saudi Arabia, and they are considered to be very faithful allies. Let’s dispense with all this nonsense.
Glenn Diesen: The way Iran is today, how do you assess their objectives, their goals? What do they want to achieve in this war? I know they didn’t choose the war, but now that they’re in this, if you’re advising them or someone else is advising them, what advice do you think they’re getting?
Yanis Varoufakis: I’m going to speak to you as a left-winger, because the left in the West needs to be reminded of what this regime is like. In 1979, Glenn, when the people of Iran rose up against, as you put it, the fascist dictatorship of the Shah and his Gestapo—the SAVAK, which the CIA had helped him build up, an intelligence and suppression agency that became synonymous with torture in Iran. So, first, you have the 1953 overthrow of democracy by the CIA and British intelligence services. They imposed this ruthless fascist dictatorship. So that’s when they lost all moral rights to be talking about democracy in Iran. And that created the spontaneous revolution of 1979, which was not just Islamic. There were progressives, there were socialists, there were communists, and they all recognized the importance of the figure of Ayatollah Khomeini, and they supported him.
When the United States realized under President Carter—who was supposed to be the most liberal, the nicest, of all the presidents of the postwar era—that the Iranian revolution was going to succeed in toppling the Shah, then the CIA, the Pentagon, the State Department immediately took the side of the most virulent Islamists within that movement. And, lo and behold, once the Islamists took over that revolution, the first thing they did was to murder the left. They took the whole central committee of the communist party—a party that had participated in the revolution of 1979 and had supported Khomeini—and murdered them.
Moreover, while being less plutocratic than the Gulf states, than Saudi Arabia, and despite having more of a social conscience than those Sunni regimes in the Gulf, nevertheless, very soon after 1979-80, the Iranian regime started adopting neoliberal policies (remember, this is the time when neoliberalism is beginning to establish itself in the West with Reagan and so on). Especially in the 1990s, there was a wave of privatizations, of subsidy removals, of effective austerity that was being imposed by the Islamic Republic regime upon the majority of the Iranians. And if you go to 2017-18, the first rebellions, then again to 2022, when Mahsa Amini was murdered in police custody, the undercurrent of that uprising was a social upheaval, a social rebellion against the neoliberal policies of the regime.
And anybody who has been watching the Western coverage of Iranian politics for the last 20-30 years will have noticed that in the West we talk about the “reformists” and the “conservatives.” These are, indeed, two factions within the Islamic Republic, and they have differences, but their differences are not so much regarding right-wing or left-wing. The difference is that the so-called reformists are keener to connect and integrate the private enterprises that they are controlling with the European Union and the United Kingdom, particularly, and the United States if possible, but they understand that this is hard. They were the ones who were so gung-ho about the Obama plan. Obama actually said to me personally, when he was still president in the White House in April 2015, that his number one priority before leaving office was to reintegrate Iran into the international capitalist financial circuits. And he had signed the agreement, he had the European Union on board. Then Trump comes in and tears this up.
The conservatives were not keen to see the enterprises that they had appropriated through privatization be integrated with the West. They didn’t trust that the West would allow them to be integrated without ditching their project of creating an Islamic golden age. So they were more oriented towards China, towards Russia. That’s the split.
Now, ever since the Israelis turned the longstanding, long-term campaign of ethnically cleansing Palestine into a pure and undiluted genocide of Palestinians in Gaza, and following the bombardments of Iran last June by Trump and Netanyahu, the conservatives within the regime and the so-called reformists, I think, realized that there’s no room anymore for them to be at odds with one another, and they entered a new phase of survival. And they’ve been preparing for 30 years for that. They apparently have very large stocks of drones, of missiles. So, to answer your question, and to put it bluntly, in terms of survival and maintaining their regime, I think that they owe a debt of gratitude to Donald Trump.
Glenn Diesen: This is a common feature. Nothing creates more internal solidarity than an external power attacking you. But on top of the government holding onto control and enjoying enough public support, Iran is also able to absorb the pain, it seems, in terms of the attacks on military facilities as well as economic and other civilian infrastructure. So, given that they’re able to absorb this pain, and given that Trump more or less confirmed that they’ve run out of military targets to hit, who do you think will win this war? And what would victory actually look like?
Yanis Varoufakis: I know, certainly, who’s going to lose this war. The people who are losing every day are the people of Iran, the women of Iran that supposedly the West is liberating, the people of the United States, the working class of the United States. The working classes of Iran and the United States are losing. If you are a MAGA supporter who voted Trump into office, you are driving on average 100 miles to go to work and come back, you’re driving a very thirsty SUV, you are hardly making ends meet and now you have double petrol prices. So you are the great loser. You’re the great loser if you are an Iranian who is not connected to the crony capitalism of the regime, if you’re a woman. These are the people who lose.
So the vast majority of Americans, of Europeans, of Iranians, of people in the Global South, who now see increases in the price of food because fertilizers are going up, because oil is going up, because natural gas is going up—the workers of the world are united in being the losers of this war. And who is winning? I think if anyone is winning it is the leaders of the regime. Think of the younger Khamenei, who is now the supreme leader of Iran. From his perspective, he is occupying a high moral ground. His father was killed, his wife was killed, his mother was killed, his sister was killed, his son was killed. And he remains, to the extent that he’s still alive at least for now, embedded within an Iran where there is still very high support for the regime because that regime was not imposed from abroad.
Whatever one may think about it—and, as I said, I’m an opponent of that regime—it nevertheless is one that has popular support. Maybe it’s a minority support, but a large minority. And the most important thing is what I said earlier: amongst the rational, sensible dissident Iranians who, on the one hand, loathe this regime but, on the other, have a capacity to think things through, they can see that they don’t have a choice between democracy and theocracy. This is not the choice that they are being offered. If that was their choice, they would have chosen democracy, normality. But that’s not the choice. The choice that the Trump-Netanyahu illegal war is forcing upon them is between theocracy—the current regime—and a failed state, a Libya, a Syria. And they are reluctant to choose the latter just in order to get rid of the theocracy. And that is a great success story for the regime.
But can I say something on a personal note?
Glenn Diesen: Yes, please.
Yanis Varoufakis: Glenn, I’m tired. Once again, I find myself caught in the conundrum of opposing an illegal war unleashed by the United States on a country whose regime I vehemently oppose.
In 1999, having previously campaigned against Slobodan Milošević in Yugoslavia, I was forced to denounce NATO’s and America’s bombing of Yugoslavia. In 2003, after two decades of campaigning against Saddam Hussein—I was even arrested once in London for opposing Saddam Hussein when Hussein was the blue-eyed boy of the West—I then demonstrated against the American coalition’s invasion of Iraq.
In 2011, I was indignant with Gaddafi’s regime in Libya, and I opposed the American-led bombings of Libya that turned that country into a quagmire. I always called Bashar al-Assad a ruthless dictator, and yet, last year, I was lamenting the American-Israeli machinations that effectively turned Syria over to an al-Qaeda operative. And now, after having celebrated the “Women, Life, Freedom” rebellion, I find myself in a situation where I have no alternative but to condemn the American-Israeli plan to devastate Iran.
And there are many people who accuse me both of being a stooge of the Iranian regime and a stooge of the United States, saying, “Oh, you’re trying to be neutral, Yanis. What is this both-sidesism? You are taking both sides.” No. What I’m saying is that my duty as a Western leftist is very simple.
Our leadership now operates like a gang, both in the United States and in Europe. When the gang ruling our neighborhood launches an utterly unprovoked attack on a faraway gang that I also don’t approve of, killing innocent bystanders, I refuse to stay neutral. And at the same time, I refuse to pick sides. What I do is I try to call out both. But at the same time, I recognize a special overriding duty we have in the West to stop our gang. Because, again, it is our taxes funding their bombs. It is our silence that grants them consent. It is our governments that are doing the killing in our name. So we need to stop our governments from dropping bombs over Iran. And that’s our number one priority at the moment.
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