The Iranian Revolution that occurred at the end of the 1970’s and the anti-American sentiment which played into the subsequent U.S. Embassy hostage crisis are relatively well known events. However, up until very recently I was never aware of where that negative sentiment stemmed from. One of the causes of this was actually revealed to me by Ben Affleck’s critically acclaimed movie Argo which briefly describes the role that the U.S. government played in the 1950’s coup that replaced the very popular, democratically elected Prime Minister Mohammad Mosaddegh with Fazlollah Zahedi and restored Shah Mohammad Reza Pahlavi to power, replacing Iran’s tenuous (at best) constitutional monarchy with an autocratic ruler. In this blog, I will attempt to explain one of the main motivations behind the U.S. supporting the coup and give an overview of Iran’s interaction with Western powers beginning with the last rulers of the Qajar dynasty in an exploration of one of the many factors that culminated in the revolution’s hostile environment towards the West: economic imperialism.
The background of the story starts with a series of concessions and capitulations Iran granted to the British and Russians at the end of the 19th century including the Reuter Concession which, according to a source quoted in Gelvin, was “the most complete and extraordinary surrender of the entire industrial resources of a kingdom into foreign hands that has probably ever been dreamed of, much less accomplished, in history.” It is actually quite ironic that the Shah of Iran repeatedly engaged in giving concessions and then ended up paying enormous sums of money to get out of them once he or the public realized they were not in his country’s best interests. For example, after giving a concession allowing a British citizen complete control over the tobacco industry in Iran for fifty years the Shah agreed to pay 346,000 British pounds to cancel the deal and ended up having to borrow 500,000 British pounds in order to do so. In an attempt to raise money to modernize the country Iran kept granting concessions that landed them in a massive pile of debt and only reduced its economic robustness and national sovereignty even more. This is a perfect case of defensive developmentalism that ended up going extremely wrong and sets the tone for the main topic of discussion.
Iran’s history of having been sorely taken advantage of by Western powers put in place the foundations for its very understandable resentment towards America, with the heart of the issue being the nearly complete foreign control of Iran’s most valuable natural resource: oil. In 1901, the Iranian government granted a huge concession with overarching ramifications to an Australian named William d’Arcy. The concession, which granted him absolute access to and undisputed power over the entire oil industry for fifty years, put in place the “modus operandi” for foreign interests to take an overwhelming majority of the profits from the industry, leeching Iran’s economic lifeblood and preventing them from being able to invest in further development.
The history of just the economic facet of the issue that follows is extremely complex and would take a book to explain; therefore I am just going to skim the surface of the topic. D’Arcy ended up selling his rights to the Burmah Oil Company which established as one of its subsidiaries the Anglo-Persian Oil Company. In order to further manifest its foothold in Iran and transform its navy from a coal burning fleet to an oil based one, the British government seized the opportunity and bought the majority of shares in the company. This move firmly established them as leaders in the oil industry. Time and time again, the Iranian government afterwards tried to renegotiate the terms of the agreement, now controlled by the British, with various degrees of success including a renegotiation in 1933 that actually ended up extending the d’Arcy Oil Concession by thirty-two years.
Finally, in 1951 Prime Minister Mohammad Mosaddegh (in the absence of the Shah who was at the time in exile as a result of widespread disapproval of his reign) successfully nationalized the oil industry with the backing of the Majlis, effectively cutting off foreign control and allowing the oil profits to stay in Iran. However, foreign interests, primarily the British and the United States governments, did not approve of this move and in 1953 orchestrated a coup referred to by the CIA as “Operation Ajax” in order to reinstate the deeply unpopular Shah. In the end, the attempt at handing the reins of power back over to the Shah was a success. However the reinstated regime’s widespread corruption, brutal oppression of resistance, and the Shah’s lavish lifestyle supported by funneling the country’s oil profits to his family were all factors that culminated in the Iranian Revolution. With its involvement in the coup, the United States marked itself in Iran’s eyes as only supporting democracy when it suits American interests. Subsequently the people saw the U.S. as being directly responsible for Shah Mohammed Reza Pahlavi’s continued rule and thus the problems of the country. Therefore it is little wonder that the revolution in the 1970’s was marked by a distinctive anti-American and non-Western sentiment.
This is just a very narrow analysis of an extremely complex and multi-faceted issue whose consequences are still playing out to this day.
Sources: Gelvin (Chapters 5, 10, and 19) and Wikipedia