How did our friend Iran become our enemy? Jim Powell

Before the United States goes to war with Iran, as many Americans seem anxious to do, we should first understand how Iran became our implacable enemy. U.S. presidents from Eisenhower to Carter viewed Iran as our friend. The CIA didn't see this coming, and neither did our State Department.

The story goes back to the early days of World War II.  In 1941, Great Britain and the Soviet Union invaded Iran, because the ruler, Rezā Shāh, seemed incapable of countering Nazi influence.  They forced him to resign.

He surrendered his wealth that included multi-million dollar bank accounts, some 2,000 villages as well as myriad other properties that he had expropriated.  Rezā Shāh’s son Mohammad Reza Pahlevi was installed as Iran’s political leader, because he appeared likely to do the bidding of the Allies.  He became the Shah and served as a constitutional monarch with very limited powers.

After the war and the humiliating invasions, an Iranian nationalist movement clamored to eliminate foreign intervention in their country.  Great Britain withdrew its forces, but the Soviets stalled.  Extended negotiations resulted in an agreement that an Iranian-Soviet oil company would be established.  Soviet forces eventually withdrew, in part, because U.S. President Harry Truman sent a stern warning to Moscow.  Nationalists orchestrated demonstrations against the proposed Soviet oil deal, and it was rejected.

Then nationalists targeted the British government-controlled Anglo-Iranian Oil Company that monopolized oil production.  There were negotiations aimed at increasing Iran’s share of oil revenues, but the company refused.  Britain was desperate to maximize its oil revenues, because of its dire financial situation after World War II.  The ambitious intriguer General Haj-Ali Razmara, who favored the British, was assassinated — a warning to those who defied Iranian nationalism.

The wily nationalist Mohammed Mosaddeq emerged as leader of the campaign against the oil company.  The Shah favored nationalization, and despite British threats, he nominated Mosaddeq as prime minister in April 1951.  Mosaddeq cancelled Britain’s right to extract oil from Iran and ordered the seizure of its assets.  The company shut down the refineries, withdrew their employees, oil production collapsed, and British navy blockaded Iran’s ports, throttling the export of oil or the import of food.  Diplomatic relations with Britain were severed.

Economic crisis led to political turmoil.  Mosaddeq demanded more power, especially control of finances and the military.  When Mosaddeq wasn’t pushing the British for an acceptable deal, he was trying to undermine the Shah’s position in the government by excluding him from meetings and preventing other politicians from contacting him. 

From time to time, Mosaddeq flirted with the Tudeh (Iranian communist) party or even the Soviet Union as he maneuvered among his political rivals.  Meanwhile, Mosaddeq pursued Soviet-style expropriation of landed estates, and he established collective farms.  As negotiations with the British dragged on, the Iranian economy deteriorated, and the Tudeh party displayed its strength by organizing riots and strikes.

Crowds began denouncing Mosaddeq, and the Shah became weary of Mosaddeq’s constant scheming.  On August 19, 1953, the Shah boldly dismissed him.  Amidst escalating violence, the Shah fled to Iraq.  While he was gone, loyal General Fazlollah Zahedi restored order and made it safe for the Shah to return.  He demanded to be involved in political and administrative decisions.  He insisted on exclusive control of the military.  He gained supreme power in his country.  Mosaddeq was imprisoned. Diplomatic relations with Britain were restored, Britain’s Iranian oil monopoly ended, and Iran offered a financial settlement for nationalized properties.  The Iranian government began to receive oil revenue again.

Well, it turned out that the uprising against Mosaddeq and the pro-Shah military maneuvers were organized by British and CIA secret agents.  A major concern was that Iran might be drawn into the Soviet orbit.  Only a few years earlier, Soviet mass murderer Josef Stalin had seized control of Eastern Europe, and the Chinese mass murderer Mao Zedong had converted his country into a totalitarian communist state. If a communist takeover in Iran was as serious a threat as feared, the coup might be considered successful.  But for the rest of his days, the Shah was viewed as a tool of Western interests – and to a significant degree, he was. 

Moreover, as far as many people were concerned, by installing and continuing to support the Shah, the U.S. as well as Great Britain implicitly bought into his policies.  Certainly U.S. presidents and other Cold War friends of the Shah were very discreet about publicly criticizing him.

This was a risky thing to do, because many seemingly stable governments collapsed amidst unexpected coups and revolutions. 

For instance, in 1952 Egyptian colonel Gamal Abdel Nassar led a revolution toppling the Muhammad Ali monarchy that had ruled Egypt since 1905 – far longer than the Iranian monarchy the Shah’s father had started in 1925.  Nassar promoted a witches’ brew of nationalism and socialism.  Then in 1958, the Hashemite monarchy in Iraq, which King Faisal I had established in 1921, was overthrown in a military coup led by Brigadier General Abd al‑Karim Qasim.  The king, a prince and three princesses were gunned down.  In 1960, Turkey’s democratically-elected government was overthrown by a military coup.

The Shah was determined to consolidate his power and establish a police state.  “My father’s dictatorship was necessary,” he was quoted as saying, “and my authoritarianism is also necessary.” 

He paid off journalists and established a newspaper that could be counted on to portray him and his policies in glowing colors.  The Iranian constitution was amended to increase the Shah’s power.  It established a new senate with 60 members, half of whom were appointed by the Shah.  He responded to demands for free elections by picking at least two candidates for each elective office, then letting voters choose between them.  Police observed as people cast their votes in open ballot boxes.

In 1957, CIA secret agents helped the Shah establish SAVAK.  Originally, this was intended to be an intelligence-gathering agency, but soon its mission became to help the Shah’s friends and destroy his enemies.  If widely-published reports are to be believed, SAVAK had as many as 60,000 secret agents, informers and collaborators.  SAVAK’s interrogation methods were said to include rape, extracting fingernails and attaching high voltage power lines to genitals.  Historian Gholam Reza Afkhami remarked: “SAVAK was more successful in antagonizing the supporters of the regime than in neutralizing its enemies.”

The Shah strongly believed in a government-run economy.  He insisted that government must control prices and that “key” industries must be government monopolies.  He was determined to limit the accumulation of private sector wealth that could enable people to challenge his regime.  He expropriated landed estates.  He seized Iran’s only private TV network, the oldest private university and the most valuable private mine, among other private assets.  From the standpoint of victims whose property was stolen, the Shah must have been hard to distinguish from a hardcore socialist or communist.

“The Shah had a statist vision of the economy where the state could and should become an economic leviathan,” observed Stanford University historian Abbas Milani.  The Shah practiced corrupt crony capitalism on a colossal scale. 

A British Embassy study revealed there were “few branches of economic activity” that eluded the greedy hands of the Shah, his family and friends.  They owned businesses in “banking, publishing, wholesale and retail trading, shipping, construction work, hotels, agricultural development and even housing.” 

The Shah reportedly had a part‑interest in cement, fertilizer and beet sugar production, as well as grain marketing.  The Shah was a valued partner, because he could clear away regulatory obstacles that plagued entrepreneurs who lacked royal connections.  But all this wasn’t enough.  The Shah and his cronies amassed even more loot simply by stiffing vendors with unpaid bills.

As a consequence of such statism and profligacy, the Iranian government was for many years in bad shape financially – despite all the oil.  That’s why the Shah repeatedly pitched American officials for cash. He complained that Iran didn’t receive as much U.S. aid as Turkey or Pakistan.  He wrote a long letter to President John F. Kennedy, pleading that Iran was “in need of assistance which only America can furnish.”  By continuing to bankroll the Shah and collaborate with him on military matters, the U.S. effectively supported his policies, helping to make his enemies our enemies. During the 1960s, the Shah began to make enemies among Shia clerics.  The traditional practice was for officials to take an oath of office with the Qur’an, like Western officials who used the Bible, but the Shah decided that various religious minorities could use their own holy books.  Clerics were outraged.  They insisted on the supremacy of the Qur’an. 

Moreover, the Shah believed that women should be able to vote and hold public office.  The clerics were against this, even though women’s ballots weren’t counted.

Among those outraged was Ayatollah Khomeini, the same cleric who was to play a leading role in the 1979 Iranian revolution against the Shah. He slighted Khomeini by addressing him as “Hojat-al Islam,” a lower rank in the Muslim religious hierarchy.  The Shah was angry when clerics joined landowners to form organized political opposition.  The Shah denounced the “little, empty and antique” clerics who tried to prevent Iran from becoming a modern nation.  Khomeini, enraged, reached out to a rapidly expanding Muslim underground network that included terrorists plotting against the Shah.  In 1965, there was another attempted coup and assassination.  The Shah’s armed forces killed some 200 people during Tehran riots.  The Shah blamed those riots on Khomeini.

When the Shah visited the United States during the 1970s, he encountered large numbers of Iranian students protesting his oppressive regime.  Historian Milani reported that the Shah “would never again travel to a Western European or American city without the specter of student demonstrations haunting him.”  Meanwhile, the political opposition gathered momentum at home.  Dr. Yahya Adle, one of the Shah’s friends, reportedly warned him: “You can’t keep your throne afloat on a river of blood.”

The Iranian businessman Abolhassan Ebtehaj gave a talk at Stanford University, warning that although the U.S. government had given the Shah’s government more than a billion dollars, the U.S. was “neither loved nor respected.”  He explained, “where the recipient government is corrupt, the donor government very understandably appears in the judgment of the public to support corruption.”

Major demonstrations against the Shah began in October 1977.  They intensified in January 1978 and were followed by strikes that substantially shut down the Iranian economy.  The Shah fled the country in January 1979.  Ayatollah Khomeini, his nemesis since the early 1960s, emerged as the principal leader of the revolution and the theocratic successor regime that appears to be even more oppressive than the Shah’s.  Evidently the CIA and State Department failed to anticipate this upheaval because they had limited contacts with people in movements opposing the Shah. Americans were stunned when suddenly, as it seemed, their Iranian “friend” became a bitter enemy, but political opposition had been gathering momentum for more than two decades as the Shah made more and more enemies. 

Middle class people disgusted at the blatant corruption of the Shah, his family and his cronies, Shia clerics offended by the Shah’s arrogance and secular policies, families outraged because loved ones were tortured or murdered by SAVAK, businessmen who became weary of competing against the Shah’s insiders with special privileges, landowners who suffered from expropriation, students who embraced revolutionary ideas – all wanted the Shah gone.  It didn’t help that former CIA secret agent Kermit Roosevelt bragged about his 1953 exploits orchestrating the downfall of Mosaddeq, thereby enabling the Shah to establish his dictatorship.

To be sure, the Shah did much to help the U.S. thwart Soviet aggression in the Middle East, but Iranian nationalists were bound to resist Soviet aggression as they previously resisted the Soviet and British presence in Iranian oil fields.  If the Shah had been on his own, undoubtedly he would have resisted another Soviet challenge to his power – he didn’t want to be somebody else’s lackey. 

If the Soviets had conquered Iran, higher oil prices would have stimulated more production and exploration, increasing oil supplies, so global markets would have resolved the oil issue.  In addition, the larger the Soviet empire became – it already extended across 11 time zones – the more over-extended and vulnerable it was.  Ultimately, of course, the Soviet Union collapsed, as the over-extended empires of Napoleon and Hitler had collapsed before.

Soviet aggression was a serious risk, but a nationalist backlash was a serious risk, too. The Shah’s enemies became America’s enemies, since the U.S. played a principal role sustaining the power of the Shah.  As if this weren’t enough, Washington doubled down by backing another dictator – Iraq’s Saddam Hussein – in an effort to check Iran’s power.

A reported 300,000 Iranians were killed and perhaps another 700,000 Iranians were injured in the Iran-Iraq War (1980-1988).  So, when the U.S. intervened in Iran and Iraq, it backed two dictators and ended up having to deal with two more enemies!  Now that Iran is scrambling to develop a nuclear capability, it’s hard to see how potentially lethal hatreds could be defused.

By now, we ought to understand that it’s dangerous to view the making of enemies as something that can be satisfactorily resolved later.  Hatreds, once provoked, have persisted for decades or even hundreds of years after people lost loved ones, surrendered territories or were otherwise humiliated by their enemies.  In Ireland, Germany, the Balkans, the Mideast and elsewhere, hatreds have led to chronic, explosive violence.

We need a national defense strong enough to deter attacks, together with a foreign policy that involves less intervention overseas.  Intervention and war ought to be the exception, not the rule.

Posted December 22, 2011 on Forbes.com

Jim Powell, a Senior Fellow at the Cato Institute, is the author of FDR’s Folly, Bully Boy, Wilson’s War, Greatest Emancipations, Gnomes of Tokyo, The Triumph of Liberty and other books.