In the short history of the Islamic Republic of Iran two men have occupied the position of Rahbar, or "Leader;" a post that gets sloppily translated into "Supreme Leader." Ayatollah Khomeini, the spiritual leader of the Iranian revolution occupied this position first from 1979 to 1989. Upon his death, the position passed to Ayatollah Khamenei after some internal maneuvers by many powerful insiders. The 30+ years of the Islamic Republic never witnessed such a public disagreement between the Rahbar and the President like the current public confrontation. President Ahmadinejad fired the Intelligence minister only to have him re-instated by Khamenei. The resolution of this feud has been reached, somewhat, as Ahmadinejad backed down. For a concise and accurate description of events see Scott Peterson's article in the Christian Science Monitor.
What does this mean? What are the possibilities from here?
As I have said, many times, anyone who tells you that they know what will happen in Iranian politics with certainty is a fool or is lying. However, there remain some points that can be illuminated in this recent controversy. In some ways, the current developments show perhaps the best way to allow an authoritarian regime to dismantle itself.
The position of Rahbar encompasses the role of Velayat-e Faqih, the supremacy of the Islamic Jurist. Ayatollah Khomenei developed and expanded this concept in exile during the 1960s and 70s. In Shia Islam, although this became the standard for Iran, it is not without its' detractors. Most notable among them is Ayatollah Sistani--the Iraqi cleric who refused any direct role in government in the aftermath of the 2003 US invasion of Iraq. In Iran, during the early years of the Revolution, the concept of Velayat-e Faqih still required more development, and many Iranians, no doubt, did not think it would evolve into the absolutist system that resulted. Iranians overwhelmingly and freely voted for an Islamic Republic then. It cannot be underestimated, however, how the violence of 1979, constant worry about another US coup, and the Iraq War hardened the practical application of Velayat-e Faqih into near absolutism. The tradition, established by Khomenei, made the Rahbar the final authority, and the extent to which he would meddle in day to day affairs remained undefined--but the power to do so existed. Throughout the 1980s no President, Prime Minister or Cabinet Minister clashed publicly with the Rahbar. The only person to do so was Grand Ayatollah Montazeri. In 1988 he clashed with Khomeini over the execution of MEK prisoners and the fatwa against Salman Rushdie. Throughout the 1980s many considered Montazeri Khomeini's likely successor--this clash eliminated him from his position with the clerical hierarchy. Montazeri held positions on the various councils, like the Guardian Council; those positions were lost as well, and he spent the next 20 years in varying degrees of house arrest. His views, pronouncements and writings, however were frequently distributed and a he remained influential over a significant percentage of the clergy, as his legacy does to this day.
The position of President in Iran has not been without controversy. The first elected President Bani Sadr, eventually fled Iran with members and the leader of the Mujaheddin-e-Khalq (MEK). Bani Sadr, however, shares one thing with Mahmoud Ahmadinejad--they are the two Iranian Presidents who were/are not Mullahs. The other three presidents have been Ayatollah Khamenei (he was not an Ayatollah while president), Ayatollah Rafsanjani, and Mohammed Khatami. In any case, none of these Presidents ever publicly clashed or publicly disagreed with either Rahbar. Until 1989, there was also a Prime Minister, and this was a non-elected administrative position held almost exclusively by Mir Hussein Mousavi. Mousavi served due to Ayatollah Khomenei's wishes, even though he clashed frequently with President Khamenei and the more conservative elements within the Iranian Revolutionary Party (IRP). The Mousavi/Khamenei feud was so profound that when Khamenei became Rahbar, Mousavi resigned and Khamenei eliminated the position of Prime Minster. Mousavi retired from politics, not to return until 2009. During Khomenei's time the Rahbar presided over conflicting elements of the government, as factions within the IRP expressed differing visions of the future. This changed when Khamenei became Rahbar in 1989.
In the 1990s, with the Iran-Iraq War over, many expected standards to loosen and perhaps the normalization of relations with much of the outside world--maybe even the United States. The first Gulf War neutralized the greatest direct threat, Saddam Hussein, and yet very little changed. The landslide election of the smiling Mullah--Khatami in 1997 seemed to indicate that the excesses of the Revolution might be coming to an end. Khatami attempted efforts at symbolic reform, but he was rebuffed through a variety of judicial, and extra-judicial methods. Sadly, from 1997 to 2005, very little changed. Bush's war in Iraq gave a perfect opportunity for reactionary forces to entirely de-rail any "Reform" candidates in the 2003 elections, and by 2005 a very disillusioned electorate posted it's worst voter turnout which paved the way for Ahmadinejad's first term after a runoff election.
The period from 2005-2009 resulted in low-level in fighting between Old Guard conservatives, and Ahmadinejad's newer circle. No public confrontations resulted like the current rift, but various groups struggled for government positions, influence and Revolutionary Guard (Pasdaran) backed companies fought over government contracts between themselves and foreign entities. One of the most public scandals came over building a new airport in Tehran--a contract initially won by a Turkish firm--that was subsequently blocked by the Pasdaran and eventually awarded to a Pasdaran-backed company. All of these struggles were sidelined by the 2009 election controversy which was clearly interpreted by all the entrenched powers as an existential threat to the Islamic Republic. It took the remainder of 2009, and all of 2010 to effectively bottle-up the new Green Movement. In 2011, with Mousavi and Karroubi under house arrest, it should come as no surprise that struggles of the 2005-2009 period would come to the fore again and with renewed vigor. Ahmadinejad may seemed to have lost the current battle, however, the more Khamenei is forced to directly exercise power, the more that power is undermined. There is no way to know Ahmadinejad's strategy; he is doubtless playing a dangerous game. Nevertheless, Khamenei intervened in the 2009 election in Ahmadinejad's favor, and he cannot really undermine Ahmadinejad without undermining himself. The Velayat-e Faqih, already weakened by the 2009 election controversy, is on dangerous ground, and it really only retains legitimacy if it is used in matters of grave consequence. The current cabinet intervention does not rise to that level and it makes Khamenei and the position of Rahbar appear petty and diminished. The summer is going to be long and challenging. The dismantling of the subsidies for gasoline, and other essential food items will put tremendous pressure on the middle and lower classes especially with very high levels of unemployment. All of the ruling factions will be looking to blame each other for the trouble as the summer heats up.
For those thinking that an immediate collapse of the current ruling structure would be a good thing, do not be so sure. The Shia Clergy in Iran as a whole, is not nearly as monolithic as one might think. This is especially true if one considers the many Mullahs and Ayatollahs who are not part of the ruling elite and actually support the Green Movement. Even clerics in positions of power adhere to a religious hierarchy, while Ahmadinejad and his coterie are more comparable to a group of Southern Evangelicals--making up their own religious orthodoxy as they go along. I'm not sure a group like that with significant factions of Pasdaran supporters is a change for the better. The other side to that, however, is that the leadership of the Pasdaran is likely split between Ahmadinejad and Khamenei--with advantage going to Khamenei. Where is the Green Movement in all of this? Mostly dormant, or as they like to describe themselves--smoldering coals under a layer of ash. It remains impossible to predict how this will turn out, but the US should do nothing to deflect attention away from this internal conflict. When Ahmadinejad and Khanenei start accusing each other of being influenced by American agents, we'll know the end is near.