1979: Iran and America

By Suzanne Maloney, January 24, 2019
Four decades have now passed since a mass political movement espousing the triumph of sacral authority over secular toppled Iran’s absolute monarch, Mohammad Reza Pahlavi, and his seemingly impregnable state. Just as definitively, the revolution that abrogated the Pahlavi dynasty in 1979 scuttled a set of assumptions about religion, modernity, and political development that were previously considered axiomatic.
Widely considered unthinkable even as it was unfolding, the ouster of the shah and the assumption of authority by an inchoate coalition of leftists, liberals, and Muslim clerics captivated the world. The subsequent establishment of an Islamic Republic in Iran dramatically transformed the nation’s internal politics, economy, and society and its impact echoed well beyond its borders to reconfigure the regional landscape, the geostrategic balance in the Middle East.
For Washington, the revolution represented a devastating strategic loss. Since the British withdrawal from the Persian Gulf in 1971, Iran had become the cornerstone of America’s security architecture for protecting Western interests across the region. As both the “pivot in the price hike” and the sole regional leader willing to buck the Arab oil embargo, the shah had made himself equally consequential for energy markets and the global economy. Iran’s revolution reshaped the country, the region, and its interaction with the rest of the world, especially the United States. Forty years later, the legacy of the revolution lives on in both Washington and Tehran in the mutual antagonisms it brought to the fore.

The United States and Iran were not old allies, but Americans had played a crucial—and until 1953, constructive—role in each of the formative experiences in the birth of modern Iran. An American teacher died in the fight to advance rule of law during Iran’s 1905 Constitutional Revolution. American missionaries established dozens of hospitals and schools around the country, training a generation of future leaders and helping expand female education. In the final years of the Qajar dynasty and the early years of the Pahlavi reign, U.S. officials were seconded to help to strengthen the state’s fiscal management, advance administrative reforms, and reorganize its gendarmerie. Washington advocated on behalf of Iran, then occupied by the Allied powers, during the Paris Peace Talks after World War I, and again after the second, when Russian troops helped instigate secessionist movements in northern Iran and refused to withdraw as agreed.

This propitious start to the relationship, which positioned Washington more favorably than the imperial machinations of Britain and Russia, is all but forgotten today, thanks to the U.S. role in ousting Iran’s nationalist prime minister in 1953 and the subsequent embrace of Shah Mohammad Reza by successive American administrations. The coup was a momentous turning point for Iran; coinciding with a broader imperative around American engagement in the Middle East, the CIA’s role in preserving the monarchy meant that for the first time, Washington assumed a real stake in Iran’s fate. The generous American program of technical and financial assistance that followed the shah’s reinstatement enabled him to impose greater central control and reassemble the instruments of the state under his personal authority. Over time, it would become painfully clear that the costs of the coup in stoking paranoia, enabling repression, and undermining the Pahlavi’s legitimacy vastly outweighed its short-term benefits, but at the time the preoccupation with the Cold War obscured Iranian resentment fueled by the American intervention.

Instead, Americans and the world marveled as Iran made epic progress over the next quarter-century. Under the auspices of the shah’s “White Revolution,” a multifaceted set of political and economic reforms that, together with the oil boom, helped generate rapid growth and a dynamic, cosmopolitan society. Average annual growth rates between 1959 and 1972 were 9.8 percent—on par with the more recent experience of China. The number of primary school students increased from 286,000 to 5.2 million, and adult literacy rates shot from 16 percent to 36 percent in the monarchy’s final 15 years. Women secured the right to vote and run in parliamentary elections, and their political participation helped advance a progressive new family law. Iran’s middle class approached one-fourth of the labor force composed of an estimated 700,000 salaried professionals and an additional 1 million families associated with the bazaar and small manufacturers. For millions of Iranians, the shah’s development program generated tangible improvements in their quality of life and expectations of upward mobility for their children.
And yet Iran’s aggressive modernization triggered deep fissures that, over time, escalated to corrode the foundations of the monarchy. The launch of the shah’s reform agenda met with fierce opposition among influential constituencies in the clergy, the merchant class, and major landholders. They saw land reform as an encroachment on their income, the extension of women’s suffrage as an assault on their values, the legal protections afforded to Americans in Iran as an intolerable capitulation of Iran’s sovereignty. In 1963, Ayatollah Ruhollah Khomeini emerged as the most powerful voice of opposition, denouncing the shah as a “wretched, miserable man” and a puppet of American and Israeli masters. His arrest and deportation to Iraq a year later seemed to neutralize the threat; as would eventually become clear, Khomeini’s arms-length distance from the shah’s steady attenuation of Iran’s political opposition only magnified his influence.
Through the 1960s and 1970s, the embrace between the shah and Washington grew ever closer. With commercial ties expanding steadily, Iran’s great leap forward had direct beneficiaries in the United States. The floodgates opened—especially for military hardware—after the price of oil quadrupled in 1973. The shah launched a big-budget defense buildup, purchasing more than $16 billion in arms from the United States between 1972 and 1977, on top of approximately $3 billion per year in bilateral civilian trade.
The bilateral relationship transcended the obvious energy and military trade. Between 1973 and 1978, telephone calls between the United States and Iran skyrocketed by 1,600 percent. At least 60 thousand Iranians lived or studied in the United States, while 50,000 Americans were working in Iran. More than 50 American universities had campuses in Iran or partnerships with Iranian counterparts. Tehran, Isfahan, and Shiraz became chic destinations for tourists: Andy Warhol went there to paint the empress’s portrait; Elizabeth Taylor visited, drinking vodka with her caviar. And the shah invited his son’s favorite actor, the star of the 1970s television hit “The Six Million Dollar Man,” who brought his starlet wife, Farrah Fawcett. “This is an enchanted land in which modernity, thanks to an enlightened young ruler and the presence of an enormous supply of petroleum, harmonizes with one of the earliest civilizations known to recorded history,” gushed the New York Times in 1965. The Pahlavi’s Iran was distant but familiar for Americans—and firmly on the path to “modernity.”
The shah thought so as well. He abhorred traditionalism; as he declared in his memoirs, “I could not stop building supermarkets. I wanted a modern country.” Giddy with success and eager to expedite Iran’s transformation, he boasted that Iran’s economy would outpace that of Germany and France by the turn of the century, overriding his advisors’ objections and doubling government spending in 1973. But even with record oil revenues, the scope and pace of his ambitions outstripped the country’s absorptive capacity. Iran suffered all the predictable consequences of hyper-growth: rising inflation, corruption, and income inequality; rapid urbanization and inadequate public services; structural bottlenecks, vast inefficiencies, and an influx of foreign workers and associated cultural frictions. As Tehran sought to manage the disruptive impact of volatile energy markets, its remedies often exacerbated the problems, especially given the shah’s increasingly autocratic political impulses. Since 1953, he had taken care to eliminate any potential threats to his reign, through the much-feared secret police and restrictions on political activity. Soon enough, the monarchy found itself facing a steadily escalating barrage of protests, as an improbable cooperation among Iran’s traditional nationalists, radical Marxists, and a highly politicized faction of the clerical establishment came together to confront the shah.