TEHRAN, Iran — This place is rather like a madhouse in which a fire has been started. The occupants, in their moments of lucidity, are perfectly aware that the madhouse is burning, and that all will shortly be consumed in the flames. But all are paralyzed — by irrational fears and hates, delusions of grandeur, or simple inertia and stupidity — so that no one is capable of putting the fire out while there is still time.

There is not a great deal of time. The best current guess is that the fire in the Iranian insane asylum is likely to get out of control before the winter ends, probably some time in February. For at about this time, according to present projections, the Iranian government, should run completely out of money. The Iranian government will thus lack the means to govern.

Lives Off Currency

For the last several months the government of Dr. Mohammed Mossadegh, the chief incendiary in the Iranian madhouse, has kept itself going by a curious economic process, rather like a cow drinking its own milk in order not to starve. The government has been living off about 14 million pounds sterling, which previously formed part of the backing of the Iranian currency.

This reserve has been used as a substitute for the lost oil revenues. It has been used to pay Iran’s incredibly incompetent officials, as well as the army, the internal security forces, and the 70,000 idle oil workers. But now the cow is, inevitably, going dry. In a matter of a few weeks, the last pound in the sterling reserve will be spent.

For some weeks more, the Iranian government will undoubtedly be able to keep going somehow. Loans and taxation are planned — but it is incredibly difficult to separate a rich man from his money, and most Iranians with any loose cash are already sending everything they can scrape together abroad. It can dip into the gold reserve and the crown jewels which also form part of the backing for the currency. But of course this process will quite soon reduce the Iranian currency to utter worthlessness and the Iranian economy to complete chaos.

Iran Will Go Broke

Thus, bar a miracle — which can only take the form of American financial intervention — the day is certainly coming when the Iranian government will be absolutely flat broke. No one, of course, can tell precisely what is likely to happen then. But it is not too difficult to guess what might happen.

There will certainly be mass unemployment and mass misery in the cities, where the hordes of government officials will be turned loose, and in the oil areas where the 70,000 oil workers will suddenly find themselves without any means of livelihood at all. This circumstance will in itself give an enormous impetus to the Tudeh, the outlawed Communist party, the only really organized and disciplined political force in Iran.

This will happen at a time, moreover, when the internal security forces, including the army, will be tending to disintegrate, simply for lack of oil pay. There are those here who believe that in these circumstances a sudden coup d’etat by the Tudeh, more or less on the pattern of Czechoslovakia, will be the most likely outcome.

Tudeh Gains

Others consider more probable a somewhat more gradual and orderly shifting of this strategically vital country into the Soviet orbit. Partly because Mossadegh is sure of victory anyway, and partly because of an odd streak of idealism in his peculiar character, the forthcoming elections are expected to be, if not exactly free, at least less neatly arranged in advance than Iranian elections habitually are. He is thus considered entirely likely that a number of adherents of the Tudeh party, doubtless wearing transparent false whiskers, will be elected to the Iranian Majlis.

This will give the Tudeh the legal toehold which it has so far lacked. In the period of economic crisis which lies ahead, the Tudeh might thus gain power gradually, by more or less peaceful means. Assuming — and it is a reasonable assumption —a Soviet policy of all aid to the Tudeh short of open, armed intervention, the Communist take-over here might be both relatively nonviolent and very rapid. The danger to Iran is at least as real as was the danger to Greece in the spring of 1947.

It is not possible, of course, to predict either the timing or the precise form of a Soviet victory in this country. But it is as certain as such things can be that Iran is doomed to economic collapse and chaos. And it is absolutely certain that the capture of Iran has been a top priority Soviet objective ever since V. M. Molotov demanded “the Persian Gulf area” from the unspeakable Joachim von Ribbentrop, as the Soviet Union’s share of the loot during the time of the Nazi Soviet pact. The danger to Iran is at least as real as was the danger to Greece in the spring of 1947.

Remarkable Technique

Dr. Mossadegh, who is an exceedingly shrewd man in a mad sort of way, is counting on precisely this — the American realization of the danger to his country — to bail him out. It is, indeed, a remarkable technique which he has developed, a sort of blackmail by the threat of suicide. It is an extraordinarily effective technique, which has faced the Anglo-American allies with an awful dilemma. But at least one thing is clear. The threat of a Soviet take-over here can be dealt with in one way — by a strong, joint Anglo-American policy, firmly adopted before it is too late, before the fire in the Iranian madhouse gets wholly out of control.