Although the macro-economic policies of the country have changed from time to time in the Iranian contemporary history, still the nature and structure of state economy and the integration of the major parts of Iranian economy into the core of state capitalism and its semi-state satellites have been maintained. Therefore, the Iranian economy has experienced an identical process due to the lack of transition from state and semi-state capitalism to a logical and balanced synthesis of the functions of state and market in the economy. The primary concern and central objective of this article are to investigate the political-economic nature and causes of the non-development of privatization and to understand the continuous historical process during which the core of state capitalism has been acutely developed and reproduced in the contemporary history of Iran. In contrast, it endeavours to demonstrate, the private sector of Iranian economy has only enjoyed limited chances of and conditions for generating [property] ownership, capital accumulation, and economic growth, as well as for playing a key role in the power structure of political economy and development process in Iran. The article critiques the reductionist nature of the existing literature on the subject, and shows, by using a new theoretical approach called the “paradigm of power,” that it is not possible to understand the nature and internal logic of the tendency of the dominant elite in Islamic Republic paradigm of power towards the development of state capitalism and non-development of private sector in economy without taking into account the historical process of the formation, evolution, and establishment of this paradigm of power in society and particularly without considering their preferred nature of order in the areas of capital accumulation, hegemony, identity and legitimacy (as metonymic causations or the central and hard core of these paradigm of power).