National Security & Defense

Iran: The Truth about the CIA and the Shah

Mossadegh with supporters in Tehran, 1951.
The common wisdom is wrong; a history lesson is in order.

A cousin of mine has finished his freshman year in college; like most freshmen, he now knows absolutely everything. He took it upon himself, this week, to announce (to my brother, who is a very patient man) that Iran’s Islamist dictators were “a predictable consequence of American imperialism,” which manifested itself through “the CIA’s international pro-fascist crimes.”

That’s nonsense, of course, but it’s widely believed nonsense — and not just among college kids who’ve read the first chapter of a Noam Chomsky book. There are serious men who are under the impression that the CIA led a coup to replace an upstanding, democratic reformer named Mohammed Mossadegh with a fascist Shah named Mohammad Reza Pahlavi, and that Pahlavi’s crimes were so atrocious that Iran was driven into the arms of the mullahs. None of that is true. And with Congress getting ready to vote on the Iran deal, everyone could use a little historical perspective.

Mossadegh, a popular parliamentarian, was appointed prime minister by the Shah in the spring of 1951. He quickly set about social-reforming: Serfs were freed, paid sick-leave was mandated, landlords’ revenues were tithed to pay for public works — and the British-owned Anglo-Iranian Oil Company was nationalized.

The story of Iranian oil dates back to 1901, when an English businessman named William D’Arcy negotiated an oil-exploration contract with the (then) Shah of Iran, Shah Qajar. In exchange for a large cash payment and shares in the ensuing oil company, along with 16 percent of all oil revenue, D’Arcy acquired exclusive drilling rights in most of Iran for 60 years.

At first, it seemed that Iran had gotten the (much) better end of the deal: After seven years of prospecting, D’Arcy had found nothing. He was almost bankrupt; he had recapitalized with a new partner, the Burmah [sic] Oil Company, which wanted to call it a day. D’Arcy was already in the process of closing up his Iranian shop when — lo and behold — he struck oil, in May 1908.

The British government, hoping to reduce its dependence on coal, invested heavily in in the D’Arcy–Burmah company, which was renamed the Anglo-Persian Oil Company, and later the Anglo-Iranian Oil Company. The AIOC turned a large profit for the British, and, with 16 percent of the revenue, Iran turned a large profit too. As time went on, though, Iran’s government came to consider the initial 1901 arrangement unfair; after lengthy negotiations, in 1933 — 32 years into a 60-year deal — the British agreed to sign a new contract. In the late Forties, Iran’s government again demanded a new contract, which led to a “supplemental” agreement in 1949, setting higher minimum payments to Iran. Nonetheless, in 1951, Mossadegh had all Anglo-Iranian Oil agreements terminated and the AIOC nationalized. He described the nationalization as a blow against British imperialism.

Extremely valuable property, legally owned by the British government and British private citizens, had been confiscated by a foreign government. Before the war, Britain might have invaded. Instead, it retaliated against Mossadegh by leading an international embargo of Iran’s oil and by withdrawing its technicians from the nationalized holdings. Without British know-how, the company could barely function; after the withdrawal, Iranian oil production dropped 96 percent. And the oil that was produced couldn’t be sold.

Oil money funded the Iranian government; without it, Mossadegh’s reforms were worthless, and his popularity plunged. Mossadegh called a parliamentary election in late 1951. When he realized he was going to lose, he had the election suspended.

(That should put to bed the notion that he was an idealistic democrat.)

Nonetheless, Shah Pahlavi allowed Mossadegh to form a new government, and in the summer of ’52, Mossadegh demanded authority to appoint a new minister of war and a new chief of staff, which would give him control of Iran’s military — thitherto under the authority of (and loyal to) the Shah. The Shah refused; Mossadegh resigned, and began to organize anti-Shah demonstrations. Iran was thrown into chaos, and, fearing collapse of the country, the Shah acquiesced, re-appointed Mossadegh, and gave him full control over the military.

(Quite the fascist was Shah Reza Pahlavi.)

Reinstated, Mossadegh — in the tradition of all great democrats — persuaded the parliament to grant him emergency powers, which he used to confiscate the Shah’s land, ban him from communicating with foreign countries, and exile his sister. Mossadegh also used his emergency powers to institute collective farming. According to Stephen Kinzer’s book All the Shah’s Men, “Iranians were becoming poorer and unhappier by the day. Mossadegh’s political coalition was fraying.”

You may have noticed that, up to this point, the dark and shadowy hand of the CIA has not made an appearance. In fact, the U.S.’s only role in the proceedings thus far was as an intermediary between Iran and Britain in an effort to reach a settlement everyone could live with — something that turned out not to be possible. (The U.S. also played an accidental role in aggravating the situation when an American oil company reached a 50-50 oil-revenue agreement with the Saudis, which made Iran’s 16 percent deal look shabby by comparison.)

After American mediation failed, the U.S. took Iran’s side, accusing the British of being unreasonably immovable. That changed, however, in 1953: According to a senior fellow at the Council on Foreign Relations named Ray Takeyh, as Iran’s economy collapsed, “Mossadeq responded . . . by behaving in an increasingly autocratic manner.” As Mossadegh’s policies drove Iran further and further into poverty, it looked more and more likely that he would turn to the Soviet Union for support. At least, that was the view of Dwight Eisenhower and Winston Churchill, two men who had more than their fair share of experience in the spread of Soviet socialism. It began to appear that the choice in Iran would be a Soviet-backed dictator — a Mao, a Kim, a Kun — or a pro-Western dictator who they hoped would steer the country toward democracy, as in South Korea or Taiwan.

The U.S. had helped turn Persian public opinion against Mossadegh. However: There was no coup. In 1953, Mossadegh was prime minister of Iran; like many heads of state, the Shah had the legal, constitutional authority to remove his prime minister, which he did, at the behest of his ally the United States. Mossadegh, though, refused to be removed, and he arrested the officers who tried to deliver the Shah’s notice of dismissal. The Shah was forced to flee the country.

At that point, it looked at if the U.S.’s anti-Mossadegh efforts had failed: The Shah was gone, and Mossadegh remained in power. After the Shah fled, says Takeyh, “the initiative passed to the Iranians.”

The man who the Americans, the British, and the Shah had agreed should replace Mossadegh was General Fazlollah Zahedi; Zahedi was a powerful man, and well-liked by much of the political establishment, the religious establishment, and the army. With the Shah gone, and the Americans more or less resigned to failure, Zahedi took over the anti-Mossadegh campaign himself, spreading word throughout the country that the Shah — who remained popular — had fired Mossadegh and appointed Zahedi in his place. Says Takeyh: “Pro-shah protesters took to the streets. It is true that the CIA paid a number of toughs from the bazaar and athletic centers to agitate against the government, but the CIA-financed mobs rarely exceeded a few hundred people in a country now rocked by demonstrators numbering in the thousands . . . in the end, the CIA-organized demonstrations were overtaken by a spontaneous cascade of pro-shah protesters.”

Mossadegh ordered the army to restore order; the army took Zahedi’s side, and Mossadegh fled, soon “[turning] himself in to General Zahedi’s headquarters, where he was treated with courtesy and respect. Before the advent of the Islamic Republic, Persian politics were still marked by civility and decorum.”

The CIA was happy to take credit, exaggerating its involvement in what was, at the time, considered a big success — but a private CIA cable credited Mossadegh’s collapse to the fact that “the flight of the Shah . . . galvanized the people into an irate pro-Shah force.” (A large portion of those galvanized people, it should be noted, were hard-core Islamists, who feared that Mossadegh’s slide to the left would include Communist atheism.)

So: Mossadegh was no democrat, and the CIA was not responsible for his ouster; the CIA did not install the Shah in his place, and it did not become involved because of oil. In fact, after Mossadegh was gone, Iran’s oil infrastructure remained nationalized, and eventually the British agreed to a 50-50 profit split.

There’s no question, though, that the U.S. was one of the Shah’s major backers. And according to many luminaries — Ron Paul, Ben Affleck, my cousin — the Shah was a real bastard. Ben Affleck’s movie Argo opens with a monologue that says the “Shah was known for opulence and excess . . . [he] has his lunches flown in by Concorde from Paris. . . . The people starved. . . . The Shah kept power though his ruthless internal police: the SAVAK.” It was an “era of torture and fear.”

With a brutal, American-puppet dictator in power, who can blame the Iranians for turning to the ayatollahs? Well, it’s possible that Argo overstated its case. According to historian Ervand Abrahamian, “Whereas less than 100 political prisoners had been executed between 1971 and 1979, more than 7,900 were executed between 1981 and 1985. . . . Prison life was drastically worse under the Islamic Republic than under the Pahlavis. One who survived both writes that four months under [the ayatollahs’ warden] took the toll of four years under SAVAK. In the prison literature of the Pahlavi era, the recurring words have been ‘boredom’ and ‘monotony.’ In that of the Islamic Republic, they are ‘fear,’ ‘death,’ ‘terror,’ ‘horror,’ and most frequent of all ‘nightmare.’”

Abrahamian also reports that some of the Shah’s political prisoners had access to “a radio, television set, reading room, Ping-Pong table, and indoor gym equipped with exercise machines.”

Even Mossadegh was a beneficiary of the Shah’s liberal attitude toward retribution: According to a contemporary New York Times piece, the court that tried Mossadegh “refused to accede to the prosecutor’s demand that Dr. Mossadegh be sentenced to death or at least imprisonment for life as a result of the Shah’s intervention. . . . Most persons had expected the defendant would be exiled or imprisoned for life.” Instead, thanks to the Shah, Mossadegh was sentenced to three years in prison followed by house arrest.

Reza Pahlavi was a dictator, but not one of the worst — he was Chiang Kai-shek to the Islamists’ Mao.

Reza Pahlavi was a dictator, but not one of the worst — he was Chiang Kai-shek to the Islamists’ Mao. The Shah curbed the power of the aristocracy, promoted rights for women, built new infrastructure and schools, spread literacy to peasants, and maintained a strong pro-democracy foreign policy — the Shah’s Iran was even a friend and ally of that noirest of bêtes noires, Israel. To boot, under the Shah, Iran prospered at Asian Tiger levels: During the last 14 years of his reign, Iran saw annual economic growth of over 13 percent.

Iran did not fall to the mullahs because of “the hated Shah,” as Ron Paul has said — it fell because the United States refused to defend progress from Islamism, as we refused to protect our successes in Iraq from the rise of ISIS. The Shah’s government could have been saved, but we refused to save it.

So why do so many people believe the imperialist-calamity version of modern Persian history? Because the world is filled with freshmen and sophomoric adults.

— Josh Gelernter writes weekly for NRO and is a regular contributor to The Weekly Standard.

EDITOR’S NOTE: This article has been amended since its initial posting.

Josh Gelernter — Josh Gelernter is a weekly columnist for NRO, and a frequent contributor to The Weekly Standard.

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