William Jordan

A focus of US Relations with Iran under the Shah

Throughout the chronicles of US relations with the Third World, Iran has always been an

exceptional example. After World War Two its hard kept role as a Middle Eastern ally to the West was

particularly instrumental for the US during the Cold War. Iran’s natural resources: namely oil served as

the main function for US-Iranian relations. Through the complicity of the Shah of Iran, Mohammed Reza

Pahlavi, the US furthered its ties to Iran’s oil industry while campaigning against communism in the

Middle east. As a result of former Prime Minister Mohammed Mossadeq expulsion and the subsequent

pro-US government, Iran became a strategic location for the US to thwart the spread of communism and

to expand diplomatic relations in the Middle East. Above all, oil was the main cog to America’s

involvement in Iran; an exchange existed between the two countries where the US traded military goods

and intelligence for oil. Although the US was capable of building up its influence in Iran through the

Shah’s administration, it faced on overwhelming challenge with the rise of Islamic nationalism. The

events of the Iranian revolution and the hostage crisis gave witness to the rise of Islamic resistance to

the West.

In order to establish commercial relations with the Iranian government, the United States

funded and allegedly orchestrated the overthrow of Prime Minister Mohammad Mossadeq in 1953.

During Mossadeq’s tenure Iran was in the midst of nationalizing its oil industry. The US, along with the

British government acted to intervene in Iran’s oil industry. The British wanted to reestablish the flow of

revenue they once maintained through the Anglo Iranian oil company. Under a covert US supervision,

the CIA and MI6 helped shape a coup which led to the expulsion of Mossadeq through what US

intelligence called Operation Ajax. Western oil interests and a fear of communist support from the

Tudeh party (the Iranian left wing party) compelled the US to step up its relations with Iran. Mossadeq’s

successor was CIA-preferred Falollah Zahedi; as prime minister he and the Shah of Iran acted in strict

accordance to US oil interests, beginning an exploitative trade of arms and intelligence for oil with the

US lasting until the 1979 revolution.

Because of the Shah the US maintained a productive relationship with the Iranian government.

By the 1950s and 1960s US-Iranian relations were primarily based on trade. Anti communism also

played an important role as the US and NATO adopted the policy of containment. The loss of Iran to the

communist camp would have been a great defeat for the US if only communism appealed to the

Mullahs. As Muslims most Iranians-save the Tudeh Party and its supporters—were appalled by the

values of communism. The anti-communist sentiment of most Iranians and the Shad aligned well with

the US position to stop the spread of communism in the Middle East. The US found itself an ally in the

Shah; in return for is solidarity the US also gave military funding for the Shahs army and his secret police

‘SAVAK.’ With US support, the Iranian government became a military authority in the Middle East as the

US sustained open access to Iran’s oil markets through the Arab peninsula.

Under the tenure of the Shah Iran experienced the introduction of western ideals . US leaders

contended that the key to advancing Iran’s economy was “modernization.” Upon executing his ‘White

Revolution’ the Shah had introduced a land reform; which was an effort to purchase most of the land

from the ruling class and then sell it at “30% less to the peasantry.” The lower class was enchanted by

the Shah’s desire to build up agriculture. He also brought forth new reforms in profit sharing and the

privatization of government enterprises; which led to a growing class of factory owners and industrialist

who gave their employees part ownership (roughly 20%) of their profit and special consideration for

increased productivity. Other factors throughout the White Revolution aimed towards social reforms

such as extending the right for women to vote, which was strongly opposed by the clergy of the Shia

sect. Despite the growing animosity of the conservative elites, with the US supporting the Shah Iran was

becoming part of the modernized world.

Such American leaders as President John f. Kennedy encouraged the Shah to continue his style

of leadership despite social discontent. Even if there was a growing opposition to the Shahs motives,

American leaders saw them as marginal. The positive effects of a sound economy would serve as a basis

for other advances throughout the country. Kennedy urged the Iranian leader that a “vigorous and

expanding economy would provide the best backstop” for the basic reform programs which the Shah

had envisioned. US leaders believed that economic development would eventually lead the Shah to

triumph over the political dissent within his country. Yet contrary to the recommendations of such

leaders as JFK, many contemporary American politicians began to view the Shah’s position as shaky.

Increased resentment from the clergy, the Left and big landowners continued as the Shah kept close ties

with the US. The people’s perception of the Shah was quickly changing by 1963; the tenets of his White

Revolution had proved troubling for many Iranians; particularly those who felt that official policy should

be framed by the ayatollahs. US leaders estimated that an increase economic development would usher

in social justice and equal opportunity yet the majority of Iranians were opposed to the Shahs proposals;

many of them perceived his aims as a challenge to not only the power of the clergy but also the

principles of Islam. Conflict began to stir, most notably, when the ayatollah Khomeni lambasted the Shah

in a letter saying, the Americans are dishonorable; being “friends of the dollar” and having no religion or

loyalty.” (3) In his criticism of the Shah’s policies, the ayatollah Khomeni crystallized a negative

perception of the US, which the majority of Iranians would later come to embrace throughout the

1970s.

In spite of much virulent criticism from the clergy, the Shah and the US struggled to a diplomatic

relationship. Amongst the dissenters were those who alleged that Iran was becoming anti Arab, when a

US-Israel-Iranian alliance began to work against the Bath regime in Iraq. Many Middle Easterners

perceived this as anti Arab sentiment although the real motive was not anti-Arab since the alliance was

used to crush leftist government, which had aligned Iraq with the Soviet Union. At this moment it was

clear the US began to use its relation with Iran to fight against communism. To combat against a growing

increase of Arab radicalism and soviet adherence, the US and Iran supported counteractive regimes in

Northern Iraq. The Kurdistan Democratic Party was sponsored by Iran, the US and Israel to destabilize

the leftist political government in Iraq. However, in 1974 a Soviet led support of Iraq during a

counteroffensive proved too overwhelming for the Kurds. As an upshot of the Kurds defeat the Shah

made an agreement with the Bathist regime in that he would abandon the KDP in exchange for

concessions in Iraq and a curb of accepting Iranian exiles.

In light of many problems stemming from the Shah’s administration of Iran, the US tried to

maintain an effective relationship and had difficulty doing so by the late 1970s. As a result of inflation

the Iranian economy was in turmoil and the Shah was inconvenienced with a growing dislike of his

leadership. A poor economy made the Shah new enemies; not just members of the Left, the clergy or big

land owners, but also the new middle class, workers and industrialists. This created a volatile

atmosphere for the Shah and eventually led to his exodus. During the revolution in 1979 the US had to

find a better way of building relations with Iran. The rise of growing Islamic nationalism and US

resentment created a profound discord between Iran and the US that still resonates this day. The Iranian

hostage crisis is an example of how alienated and hostile each became once the Shah left. Iran’s

example is a confirmation of fact that not every facet of society will remain content with the US model

of diplomacy. Regardless of how uplifting the American involvement was supposed to be on the

economy, most Iranians at the time of the revolution saw the US as only considerate towards those who

served its interests.