Not long after the fall of the Berlin Wall, a chorus of influential opinion-makers in Washington began to sound an alarm about a new ideological threat posed to the West: the spread of "Islamism", a virulent brand of political Islam whose adherents demonized the culture, governments and even the citizens of Western democracies. In recent months, the streets of the West Bank and Gaza have seemingly validated that judgment, as discontented Palestinian youths, infused with religious fervor, revolted against an equitable peace proposition and chose to vent their frustrations against their Israeli neighbor and its distant American ally. Yet, despite sporadic manifestations of terror and fury, the "Green Peril" never made it into the weight class of the "Red Menace." While two decades ago Iran's self-confident mullahs professed to lead an Islamic crusade, today Islamism is everywhere on the retreat and U.S. pundits appear to have forgotten that many of them had recently deemed it an immediate peril. So where did it go?

Radical Islam exploded on the scene at a moment when the Middle East was undergoing a profound identity crisis. The failure of Arab nationalism, revealed most starkly by Arab defeat in the 1967 war with Israel, led its disillusioned ranks to a new ideology, one rooted in religion. For all their professions of piety, however, the new activists eschewed the mosque and sought the guidance of lay intellectuals such as Egypt's Sayyid Qutb and Iran's Ali Shariati, who had recast Islam as a revolutionary creed. In fact, a manifest strain of anti-clericalism pervaded the Islamism of the early 1970s; its followers rejected the apolitical stance of the Muslim clergy and condemned the clerical estate for its political quietism. In the Islamist telling, Islam was, not unlike Marxism, an all-encompassing ideology that would restructure society and revolutionize the polity. As one of Tunisia's leading Islamist thinkers, Rashed Ghannoushi, put it,
"Islamism is the sum total of intellectual, social, economic, cultural and political activities which spring from the comprehensive Islamic viewpoint, in order to support them in theory and apply them in practice in all spheres of life with the objective of establishing a new political and cultural entity."

Such exaggerations are not exclusive to Islamist visionaries. In the pages of this very magazine, Daniel Pipes, a perennial critic of political Islam, nonetheless perceived in Islamism "a way of navigating the shoals of modernization."

The foremost problem, as the Islamists saw it, was that the Arabs had forsaken their patrimony and adopted Western ways. As a substitute, the Islamists advocated imitating the ancestral ways of the initial Islamic community under Prophet Muhammad. Reclaiming this mythical heritage would lead to the renewal of Islamic civilization. For the new disciples of God, the Quran offered all the solutions to properly guide modern civilization. Sayyid Qutb warned that the "Scientific Revolution has finished its role. It is now the turn of Islam." Islamism initially proved seductive to those on the margins of society, excluded from wealth and power. Yet, unlike Marxism, which described the historical stages that would conceive a new society, Islamism was merely an ideology of wrath, confining itself to fulminating against the debilitating Western culture and the debased, acculturated Arab elites.

In a sense, the Islamists misunderstood the demands of their constituents. The Arab masses desired not a return to the seventh century, but political modernization and economic progress. Before an ideology can transform itself into a governing dogma, it must first offer an appealing platform, and this Islamism plainly lacked. For example, the Islamists claimed to have devised a new economic system that would render obsolete the twentieth-century models of capitalism and Marxism. Supposedly, it would reconcile the imperatives of social justice with the demands of efficiency and productivity. Alas, when pressed for detail, Islamists claimed simply that a society devoted to salvation would produce virtuous citizens willing to subordinate individual gain to the collective good. Abol Hasan Bani-Sadr, a leading Islamist economic thinker, predicted, "We will produce according to our capabilities and consume according to virtue." Typically, Ayatollah Khomeini, one of the progenitors of Islamism, declared that the "Revolution is not about the price of melons."

The reason Islamist economic theory is so cursory is that Islamists are preoccupied with politics. Nevertheless, Islamists have not excelled at governance. They have, for example, proven incapable of devising and sustaining national coalitions. Their incendiary rhetoric and uncompromising approach to statecraft have alienated the very middle classes that earlier sympathized with their critique of corrupt elites. In Egypt, Islamists committed a remarkable strategic blunder as they terrorized the tourism industry, directly imperiling the livelihoods of millions of Egyptians. In Algeria, the Islamist campaign of terror against intellectuals and journalists frightened the middle class, which soon came to prefer martial law to unchecked bands of Islamist militants. In a similar vein, Iran's clerics have insisted on a degree of ideological and social conformity that has alienated large segments of the population, particularly the educated classes.

Indeed, Egypt, Algeria and Iran have been the main laboratories of Islamist experimentation. Although militant Islam made inroads in every state in the Middle East, its ultimate triumph always depended on success in these three countries--the "bookends" of the Muslim world--and in each it has failed. In Egypt, militant Islamists opted for the formation of a vanguard party, which was to destabilize the state through sporadic acts of violence. Their efforts met with abject failure. In Algeria, the Islamist challenge began with the formation of an Islamist party and its participation in multiparty elections, but ended in an unspeakably vicious civil war, which the Islamists have clearly lost. In Iran, a radicalized segment of the clergy came to power through a populist revolution only to witness the rapid disintegration of its once formidable power base. As different as the Islamist experience was in these three countries, in each case the reason for defeat was the same: Islamism never amounted to more than a shell of an ideology.

Egypt

Beginning in 1992, Egypt faced one of its most serious crises as it confronted twin plagues of economic stagnation and armed insurrection. The nightmare of the Iranian revolution loomed. A 1993 U.S. National Intelligence Estimate predicted, "Islamic fundamentalist terrorists will continue to make gains across Egypt, leading to the eventual collapse of the Mubarak government." Yet, eight years later, the Mubarak government has not only survived, but has, through concerted economic and security measures, largely succeeded in crushing the Islamist challenge.

Islamic activism has deep roots in Egyptian society. Populist associations such as the Muslim Brotherhood have long played a role in creating alternative social welfare networks. Although the goal of these organizations was always the establishment of an Islamic state, until the last decade they avoided violence. Their militarization in the early 1990s was partly the result of the economic deterioration that gripped Egypt in the aftermath of the Gulf War. The average Egyptian's living standard was eroded by a 20 percent inflation rate, while the budget deficit hovered at approximately 18 percent of GDP. The state's inability and unwillingness to address problems of chronic unemployment offered an opening to extremist groups. Two radical organizations, Al-Jihad and Al-Jama Al-Islamiyya, spearheaded the new movement. The initial popularity of these groups derived from the fact that they offered Egypt's disenfranchised youth an idiom of dissent and a sense of community. Yet their radicalism ultimately contributed to their collapse.

As part of their attempt to overthrow the Egyptian regime, the Islamists launched an economic destabilization campaign, assaulting key financial institutions and production facilities. The campaign intensified in the early 1990s as Islamists began to target the tourism industry, the bloodline of Egypt's economy. But attacks such as the notorious Luxor assault in 1997, in which over one hundred foreign and Egyptian tourists were killed, prompted widespread public revulsion. An editorial in the influential daily, Al-Ahram, captured the public mood, declaring, "If this is what they will do to get into power then what are they going to do to us once they are in power?" Islamist violence, indeed, succeeded mostly in mobilizing the Egyptian populace behind the government's anti-Islamist platform.

Beyond their self-defeating campaign of terror, Al-Jihad and Al-Jama were unable to offer specific solutions to Egypt's seemingly intractable economic problems. The Islamist economic program was limited to slogans such as "God will provide" and the equally vague "Quran will feed the hungry." As with Islamists elsewhere, the whole emphasis was on achieving political power. Yet their conception of politics was similarly muddled. "Democracy is objectionable", Muhammad al-Ghazali, a leading Islamist intellectual, proclaimed, "because it treats equally the virtuous and the debauched, the strong and the weak, the believer and the infidel." Islamist discourse calling for the implementation of Islamic law offered powerful symbols, but it never addressed issues such as political empowerment, corruption and one-party rule. Despite their efficiency in providing social welfare services, the inability of the Islamists to proffer a coherent economic agenda and a palatable political program prevented them from emerging as an alternative to the established order.

To be sure, the brutal tactics that Hosni Mubarak employed to combat the Islamists did much to speed the loss of their influence. But their ranks were never replenished because Egypt's populace sensibly rejected the notion that the violent overthrow of the state would magically solve its problems. Support for militant Islam gradually dwindled as the Islamists failed to provide a rationale for even the most disillusioned youth to battle Egypt's security apparatus.

Algeria

More than any other Arab country, Algeria has encapsulated the hopes and fears of the Arab world's Westernized intelligentsia. During the period of post-World War II decolonization, Algeria captured the Arab imagination when its francophone elite resisted and ultimately defeated French colonial rule. The architects of this revolutionary triumph further kindled the hopes of the Arab Left by constructing a socialist state to spearhead the Non-Aligned Movement. Much to the despair of Arab salons, Algeria was subsequently torn apart in the name of Islam, its socialist ideology supplanted by a pre-modern faith.
As with many Middle Eastern states, the Algerian economy depends almost exclusively on exploitation of its petrochemical resources. The decline of the oil market in the late 1980s led to the failure of Algeria's command economy, as double-digit inflation and unemployment rapidly eroded living standards. To counter popular discontent, the ruling National Liberation Front (FLN) turned to political liberalization and multiparty elections. It was in this context that a coalition of Islamist forces entered the political arena under the banner of the Islamic Salvation Front (FIS), scoring successive electoral triumphs in municipal and parliamentary elections.

The FIS's surging political fortunes derived less from the appeal of its vision than from the bankruptcy of the FLN's state socialism and decades of authoritarian rule. The Islamist alternative to the prevailing order was always expressed in ambiguous terms, which initially attracted voters. The party avoided publishing a platform or issuing policy directives, while its economic program was limited to slogans claiming, "Wealth and Prosperity will come through Islam." As with their counterparts in Egypt, FIS leaders dismissed the importance of economics and stressed that God would never permit a society devoted to salvation to suffer scarcity and poverty. As well as this, the Islamists' professed attachment to pluralism and to democratization was always suspect, for the assertion of transcendent principles as the basis of the new political system did not leave much room for ideological diversity. FIS leader Ali Belhaj confirmed many fears when he declared that, "When we are in power there will be no more elections because God will be ruling."

The nullification of elections and a military crackdown in 1992 led to the fragmentation of the FIS and civil war. The Islamist organization that now came to the forefront was the radical Armed Islamic Group (GIA). The GIA condemned the FIS's electoral approach and exclaimed that "power is within the range of our Kalashnikovs." The GIA's targets of assassination and bombing were indiscriminate: government institutions, universities, army barracks, industrial plants and impoverished urban centers. Such a self-defeating strategy not only alienated the populace, particularly the lower strata of the society that accounted for the bulk of Islamist support, but also provided ample justification for the regime's brutal counterinsurgency tactics.

After nearly a decade of civil war, the Algerian military has effectively defeated the Islamist insurgency. But, as in Egypt, the Islamist movement lost popular support well before its collapse. The Algerian state succeeded because its actions were supported by the citizenry. In successive presidential and parliamentary elections, Algerians have been given an opportunity to cast their ballots for multiple parties and candidates. The Algerian economy, through substantial international efforts and the revival of the oil market, has gradually recovered. In essence, the Algerian state rehabilitated itself by succeeding in two areas that the Islamists failed: providing a coherent economic plan and a mechanism for increased participation in the political process.

Iran

A generation after Iran's mullahs proclaimed the right of religion to rule, the world's only modern theocracy is edging toward implosion. Ayatollah Ruhollah Khomeini professed to have created a new order in which Islamic injunctions would be fused with democratic ideals and yield a new ideology. The Grand Ayatollah proved a master tactician, forging a coalition of liberal intellectuals, traditional clerics, Marxist guerrillas and members of the merchant class, a coalition that managed to end Iran's two millennia of dynastic rule. But, as the current state of the Islamic Republic attests, Khomeini's revolution died with him.
Revolutions must ultimately be judged by whether they translate their promises into achievements. Among other things, Iran's theocrats pledged to bring sustained economic benefits to the impoverished and to an overburdened middle class. Yet, after two decades of clerical misrule, Iran's economy is plagued by a bloated state sector, resource mismanagement, rampant corruption and excessive dependence on a volatile petroleum market. Iran now confronts 40 percent inflation and 20 percent unemployment. All these problems are compounded by demographic pressure, as the regime is unable to provide employment for a majority of the 800,000 graduates that annually enter the job market. And, despite its religious pretensions, the post-revolutionary state embraces a socialist approach to economic planning and remains devoted to the elimination of "capitalist exploitation."

The Islamic Republic's political system has been equally unresponsive to the demands of its constituents. Hardline clerics have withdrawn earlier pledges to create a pluralistic order and have constructed instead an autocratic regime. It is true that Iran's theocracy has featured regular elections, but the choice of candidates is limited to those who adhere to the Islamist ideology. Moreover, real power remains in the hands of the Supreme Religious Leader. Iran is, for all intents and purposes, a single-party state.

The attempt to reconcile Islamic imperatives with the exigencies of modern society has resulted in contradictions that Iran's theocrats seem incapable of resolving. Frightened of the possibility that the free market will unleash forces beyond their control, the clerics refuse to loosen the reins of Iran's command economy. Equally fearing the ramifications of a truly democratic political system, the regime controls both legislation and candidates for office. The mullahs now face a new generation that neither experienced the revolution nor has any evident commitment to its ideals. The demands of Iran's youth for the elimination of suffocating cultural restrictions, as well as for fundamental economic reform and political freedom, threaten the very identity of the Islamic Republic.
In fact, for Iran to avoid collapsing into civil strife it must adopt some basic secular tenets. This task may be possible, as growing numbers within Iran's elite seem to recognize Islam's limited utility as a template for governance. Whatever direction the country takes, this much is at least evident: Khomeini failed to establish a durable Islamic polity in Iran, and the clerics are ruling on borrowed time.

In the early 1990s, the turmoil in Egypt and Algeria and the apparent durability of Iran's theocracy led many to forecast radical Islam's eventual triumph throughout the Middle East. But the old order prevailed. It would be wrong, however, to attribute the failure of political Islam solely to the retaliatory power of the state. The primary cause of Islamism's failure was its ideological incoherence. It was not a product of theological disquisition but a reaction to the failings of a decrepit socioeconomic order. As an oppositional posture, it may have had its uses, but as anything more it has been tested repeatedly and found wanting.
Dilemmas of institutional decay, maldistribution of wealth, and the absence of democracy were simply beyond the ken of the Islamists' empty ideological formulations. When in power, as in Iran, the Islamists created a command economy that suffered from numerous and irreparable defects, and was plagued by corruption at every level. The Ayatollahs' intended political utopia quickly lapsed into a familiar pattern of Third World authoritarianism. The failure of Islamism in power has been matched by the intellectual poverty of Islamism in opposition. Lacking a coherent agenda, Islamist movements embraced terror as an instrument of political change. But their violence could not match the brutality of the states they challenged. The moment of political Islam has now passed. Genuine political liberalization and economic modernization remain the only viable means of transcending the Arab predicament.