The Shah, the United States, and the 1953 Coup: Facts and Fictions Affecting US-Iran Relations Thirty Years After the Revolution

Gholam Reza Afkhami
FIS Annual Norûz Lecture
March 23, 2009

On Friday March 20, on the occasion of the arrival of Noruz, President of the United State, Barack Obama, broadcast a message of goodwill to the people of Iran and the leaders of the Islamic Republic. In his message he said all the right things that a president of the United States might say. He said:  “For nearly three decades relations between our nations have been strained. But at this holiday we are reminded of the common humanity that binds us together…Within these celebrations lies the promise of a new day, the promise of opportunity for our children, security for our families, progress for our communities, and peace between nations. Those are shared hopes, those are common dreams. So in this season of new beginnings I would like to speak clearly to Iran’s leaders,” he said. “We have serious differences that have grown over time. My administration is now committed to diplomacy that addresses the full range of issues before us, and to pursuing constructive ties among the United States, Iran and the international community. This process will not be advanced by threats. We seek instead engagement that is honest and grounded in mutual respect,” he said.    He added: “You, too, have a choice. The United States wants the Islamic Republic of Iran to take its rightful place in the community of nations. You have that right — but it comes with real responsibilities, and that place cannot be reached through terror or arms, but rather through peaceful actions that demonstrate the true greatness of the Iranian people and civilization. And the measure of that greatness is not the capacity to destroy, it is your demonstrated ability to build and create.”

And finally he infused the message with a vision that appeals to a majority of Iranians but, contrary to his intention, most likely will keep the leaders of the Islamic Republic away: “On the occasion of your New Year,” he said, “I want you, the people and leaders of Iran, to understand the future that we seek. It’s a future with renewed exchanges among our people, and greater opportunities for partnership and commerce. It’s a future where the old divisions are overcome, where you and all of your neighbors and the wider world can live in greater security and greater peace.” And he said “I know that this won’t be reached easily. There are those who insist that we be defined by our differences. But let us remember the words that were written by the poet Saadi, so many years ago: “The children of Adam are limbs to each other, having been created of one essence.”

The Supreme leader of the Islamic Republic, Ali Khamenei, dismissed Obama’s message as the same old repetitive sound, sometimes with fury sometimes without, signifying little. And he did this with a sense of confidence bordering on impunity. Over the past 30 years, with the exception perhaps of the second Bush, successive US administrations had tried different mixes of sticks and carrots to communicate with and befriend the Islamic Republic, to no avail. They had used the same to control, contain, weaken, or overthrow the Islamic regime. Instead, they had provided it with requisite national and political means of defense and sustenance. More recently, by placing Iran on the axis of evil, the Bush administration had on the one hand antagonized the Islamic Republic and, on the other hand, by subsequently deposing the Taliban in Afghanistan and Saddam Hussein in Iraq but failing to achieve its objectives of peace and democracy in either significantly empowered it. And more importantly, by tacitly accepting the Islamic Republic’s position on the US-Iran relations prior to the Islamic Revolution, the United States had effectively conceded the high moral ground.  My talk will be mostly concerned with this last point.


The unexpected victory of the Islamic Revolution and the subsequent resilience of the Islamic Republic helped make the Islamist discourse about the pre-revolution Iran the dominant discourse. This discourse posited the shah as a villain who followed the United States’ dictates and Khomeini as a saint who stood for the people. This picture has stuck despite the fact that any dispassionate and objective study of the shah and pre-Khomeini Iran points to a different reality. To begin with, the shah did not collapse because he was a monster or an American puppet against whom “the people” spontaneously rose up. And Ayatollah Khomeini, the revolution’s leader, did not triumph because he was a saint the people loved.

The shah lost because of political failings: he depoliticized his regime, propped the people to expect beyond Iran’s capacity to deliver, opened the regime up politically and economically when he was most vulnerable, placed his forces in harms way and refused to allow them to defend him until they were demoralized and exhausted. Khomeini won because the shah’s regime left the path open for him, allowing him and his field forces systematically to intimidate other religious leaders, capture the mosques, control the streets, make it more costly for the people to resist Khomeini than to follow the shah, cow secular opposition leaders into submission, and succeed in making Khomeini appear invincible, endowed with superhuman qualities. The ayatollah became imam, immaculate during the revolutionary frenzy, seen on the surface of the moon not only by the simple folk but also by the literati, the scientists, the historians, and the philosophers who, dazed by Khomeini’s passionate intensity, looked for and saw his face on the celestial body. In other words, the revolution was a process—a how issue– that made a seemingly impossible event inevitable in a few months.

The revolutionary process taught the Khomeini field forces how to fight in the streets and how to move the masses but not how to govern. Ignorant of the changes that had occurred in Iran over the years, the new regime ignored or repudiated whatever the shah and his father had done, built, or stood for. The new dispensation, however, hit hard at the human and material foundations of development built in Iran over the previous fifty years. In the 1920s, Iran had been one of the world’s least developed nations. In the mid-1970s it had become a showcase of development among the Third World countries, boasting one of the highest rates of economic growth, a superior record of social services, a critical mass for take-off in science and technology, and making steady progress in fields ranging from women’s rights and environmental protection to intercultural and cross-cultural communication and literacy and life-long non-formal education, among others.

In the economic field, by 1976, Iran’s GNP had grown 700 times compared to 1925, when the first Pahlavi was crowned, per capita income 200 times, domestic capital formation 3400 times, and imports almost 1000 times.[1] Most of this happened during the shah’s reign. Between 1963 and 1976 the average annual industrial growth exceeded 20 percent and the size of the industrial work force doubled. The GNP increased 13 times from $4 billion in 1961/62 to $53.5 billion in 1975/76.

As a result of these and other changes, Iran was a “brain-gainer” in 1975, then unprecedented in the third world. The new regime disparaged every accomplishment of the Iranian society during the half-century of the Pahlavi rule, dispersed the critical masses that had developed over the years, devalued the culture of development, and caused the brain gain revert to brain drain. The Iran-Iraq war, which Iran’s diplomacy and military power before the revolution had rendered increasingly improbable, devastated the country. Whereas during the 15 years prior to the revolution Iranians’ per capita income had risen 12 times from $195 in 1963 to approximately $2400 in 1978, it plunged thereafter and was still less than $2400 in international currency in 2004, 25 years after the revolution.

One way to measure the true meaning of the revolution’s cost for contemporary Iranians 30 years after the revolution is to project any curve of change, in any of the generally accepted signposts of development, in any number of decades before the revolution, to the present time and to compare the result with the actual conditions prevailing in the present-day Iran. Alternatively, one might take the measure of the accomplishments of the young Iranians in the Diaspora in the past thirty years– their superior standing among the world’s best and the brightest– and compare it with how their countrymen of the same age are faring in Iran.

Clearly, Iran would be very different today had the revolution not occurred.  So would the rest of the Middle East. There would have been no Iran-Iraq war; Islamism would have been contained; untold number of Iranians, Iraqis and others would not have died, become maimed, or suffered displacement and exile; untold amount of wealth, property, or infrastructure would not have been destroyed; clashes of civilizations likely would not have been invented or if invented believed or implemented; the United States would not have been involved in war in the Persian Gulf, and, perhaps, globalization would have taken a slightly kinder turn.

These, of course, are mere speculations; what has been and what might have been, however, can alert us to our past misconceptions, present options, and future possibilities. Such speculations are worth making though they are rarely made because, I suspect, the shock of the revolution, which no one foresaw and subsequently very few studied dispassionately, has stood in the way. Conversely, the shah’s political failure and Khomeini’s emergence as the undisputed victor, have made Khomeini’s discourse on the pre-revolution Iranian society, economy, culture, and foreign relations, especially relations with the United States, the dominant post-revolution discourse.

But only within a framework of the real can the United States and the Islamic Republic go beyond superficial statements of policy and begin to empathize and grasp the nature of the claims they have on each other.  This is critical now because we are at the dawn of a new administration in the United States and a potentially different approach to the formulation of US foreign policy.  Critical, especially because regardless of political pretensions, there are boundaries beyond which neither the Islamic Republic nor the United States can go. The more the two countries understand and respect these limits, the higher will be the probability of their approaching each other’s claims realistically and thus communicating more credibly. Issues such as Iran’s attitude to Israeli-Palestinian relations, pursuit of nuclear energy, or the regime’s fundamentalist claim that the true though often camouflaged goal of the United States is regime change in Iran cannot be successfully dealt with if the United States does not face, analyze, comes to an honest conclusion, and express itself formally on these points.

The main claims the Islamic Republic makes on the United States—claims that take off from Khomeini’s discourse– express clearly the harm the Islamic Regime believes the United States has done Iran under the shah. Generically, these claims fall in three categories: interference in Iran’s internal affairs; turning Iran into an American outpost; and stealing Iran’s heritage, that is, Iran’s wealth, culture, and soul. The catalyst for all this is claimed to be the shah, who willingly played the American stooge.  Specifically, the issue of interference is broached in terms of the 1953 events that led to the fall of Mosaddeq and return of the shah. The issue of Iran as US outpost is represented by the US-Iran diplomatic and especially military relations. And the issue of stealing Iran’s wealth and soul is claimed under the rubric of colonialism defined as westernization, explained as anti-Islamism, and expressed in more or less modern terms.

None of these claims stands evidential examination, though this fact by itself neither acquits nor faults either the United States or Iran. I have discussed these issues in some depth elsewhere.[2] Here I can only touch on them briefly. The economic, social, cultural, and geostrategic facts about Iran just prior to the fall of the Pahlavi regime belie much that the Islamic Republic claims. The economic and social conditions have already been discussed. Geo-strategically, Iran was in the best of possible places it could have been. The shah believed that Iran was destined to play a major role in the security of the Persian Gulf and potentially the Indian Ocean. This he thought would be possible only if he could keep the superpowers away from the area. The only way he thought he could do this was by guaranteeing what he understood to be their vital interest in the area. For the West, it was clearly the oil; for the United States, also Israel. For the Soviets, it was a promise that Iran would never be a beachhead for the United State to attack the Soviet Union. As I have documented it in The Life and Times of the Shah, to achieve these aims, he participated in the intellectual formulation and advocated the implementation of the Nixon Doctrine, which allowed Iran largely to define the character of that doctrine as applied to the Middle East. In fact, it may be said with reasonable assurance that the United States had largely accepted the Shah’s leadership in the Persian Gulf area and relied on his advice in matters that concerned the Middle East, including the Arab-Israel relations and the politics of oil. In the Soviet case, he established significant economic and commercial ties, especially in industries such as gas, steel, and machine tools, in lieu of military relations. He used the tension between the Soviet Union and China to befriend both. Indeed, until the last month of his reign, both the Soviets and the Chinese supported him, despite their own mutual antagonisms, and in the case of the soviets despite the fact that the Chinese leader Hua Quo Feng had made a well-received official visit to Iran in August 1978. With the Japanese, he had significant cooperation on nuclear energy in the area of NPT politics and, of course, in petrochemical industry. And despite his sometimes undiplomatic attacks on Europe’s penchant for consumerism, his relationship with Europe, including such major European states as France, Germany, United Kingdom, Italy, and Spain, remained friendly.

The same may be said of his relation with the Pakistani, Indian, and the Arab leaders. His friendship with Sadat is now legendary. He had established cordial relations with Saddam Hussein and Hafiz al-Asad. Despite significant tension with the Saudis, mostly about oil, his relation with the Saudi King Fahd remained friendly and mutually respectful.

So, unless geostrategic considerations are dismissed or peaceful interaction is rejected, it is difficult to see how Iran under the shah was only an outpost of the United States.
Because it is so, the Islamic Republic singles out 1953 and Mosaddeq’s overthrow as the case par excellence of the American interventionism in Iran. The accusation is correct insofar as the United States developed a plot, code-named TPAJAX, intended to overthrow Iran’s prime minister. But it is patently false when the claim is made that the United States in fact overthrew Mosaddeq, a “democratically elected leader.”
The Islamic Republic’s focus on the fall of Mosaddeq as the emblem of US interference in Iran’s domestic affairs is disingenuous. The Ayatollah Khomeini’s fellowship with Mosaddeq was of relatively late vintage, emerging during the Iran-Iraq war, but even then half-heartedly. During the nationalization saga, Khomeini and his Islamist followers had little sympathy for Mosaddeq. The Fadaiyan Islam, for example, had a tortuous relationship with Mosaddeq during the nationalization process. Mosaddeq was politically and culturally secular. Khomeini and Fadaiyan leader Navvab Safavi and their followers sought an Islamic government, though not yet in the final form Khomeini would give it in the 1960s. They cooperated with Mosaddeq on the issue of nationalization but opposed him on all others. Navvab thought Mosaddeq’s idea of “negative equilibrium” was misguided and ineffective in the 1940s. According to Mehdi Abd-e Khodai, a follower of both Navvab and Khomeini, Navvab Safavi believed “Mosaddeq had learned the idea of negative equilibrium from the politician-cleric Hassan Modarres in the 1920s, at a time when there existed an objective contradiction between England and Russia in Iran. This contradiction did not exist between England and the United States in the 1940s. Mosaddeq wished to employ US assistance to expel England, not grasping that times and conditions had changed. He still lived in the 1910s and 1920s. Navvab’s position (and Khomeini’s) — neither east nor west—rejected all the powers.”[3]

If Abd-e Khodai’s rendition of Navvab’s opinion is to be trusted, Navvab’s analysis of Modasseq’s mistake is right on the mark. Mosaddeq had received much of his information about the United States political system from US Ambassador Henry Grady, who was a typical liberal, anti-colonial, viscerally underdog-supporting American. He had great influence on Mosaddeq and probably misled him by imparting to him his own sentiments as those of his government’s. Moreover, Mosaddeq and his colleagues were singularly uninformed about international oil, US-British relations, and the fact that Iranian oil had been replaced by an increase of production by a factor of 3 or 4 a few months after nationalization. Increasingly, he maneuvered himself toward an impasse.

The leaders who were involved in the drive to nationalize oil were also very much concerned about the Tudeh Party and the Soviet threat. The drive for oil nationalization had begun as a result of the Soviet pressure during the Second World War to secure an agreement on oil in Iran’s Northern provinces.  In the course of the struggle to get the Soviet Union out of Azerbaijan, the idea took shape first of renegotiating and subsequently nationalizing the Anglo-Iranian oil concession. For those who were involved in the struggle, the Soviet threat dominated their strategic thinking, though not everyone was as sensitive to the ideology that differentiated the pre- and post-Soviet Russia, partly because at its inception in September 1941, the Tudeh was not allowed to appear as a revolutionary party. A communist party could not come into existence in the Soviet-occupied Iran without the Soviet embassy’s permission and directives. The Soviet government, however, was concerned primarily with the German military advances. It had no wish to antagonize the British, its main ally at the time, or the Americans. Motherland was taking precedence over Marxism-Leninism for the moment and the Tudeh Party was to be legal, formally and practically committed to Iran’s constitutional monarchy.

By the time the first Tudeh Party congress was convened in Tehran in August 1, 1944 (10 Mordad 1323), some three years after the party was established, the tide of the war had changed. The defense of Stalingrad had given the Soviet Union and the Red Army unprecedented prestige. The Soviets had pushed back the German army and were about to move into Eastern Europe. The Allies had landed on the European continent, freed France and parts of Belgium, Holland and Norway, and begun to enter German territory. The Allied army in southern Europe was moving north and the British had landed in Greece to preempt the Soviets. Germany’s defeat in the war was no longer a matter of conjecture. The question now was who would get what once the war was over. The east-west competition for supremacy had begun.

The situation in Iran reflected the situation in Europe. Germany had lost all influence. The Soviet influence was rising. By the time the war was coming to an end, the Tudeh Party had become powerful enough to affect the longevity if not the composition of cabinets. The Party lost some of its power after the attempt on the shah in 1949 and subsequently in the initial months of the oil nationalization movement, when the national excitement of expelling the British thrust Mosaddeq and the National Front to the fore. But as the British persisted and Mosaddeq maneuvered himself increasingly into a political impasse, the Tudeh regained power and by the early 1953, it had become the single most powerful political force in the nation. The connection between the Tudeh and the Soviet Union was well-established and the memory of the Soviet threat to Azerbaijan and Kurdistan lingered, frightening not only the shah, the military, the anti-Mosaddeq politicians and statesmen, and Mosddeq’s erstwhile allies in the National Front, bazaar, and among the clerics, but also the Americans.

The British, however, remained intransigent. They did not like to have the Americans involved in an enterprise they considered to be solely theirs. They made it known that they preferred no deal to what they believed to be a bad deal. The Americans pushed them to agree to a position that would make it possible for the Iranians to accept. After the fall of Prime Minister Ahmad Qavam in July of 1952, they increased their pressure. After much disagreeable communication between President Truman and Prime Minister Churchill, they finally prevailed on the British to join with them in a proposal that not only accepted the oil nationalization law but also the law to implement the nationalization law, a nine-point protocol that in principle transferred the control of the whole oil operation to Iran. Mosaddeq refused the offer on the ground that the proposal did not specify the amount of compensation for the nationalization of what the British called “the enterprise of the Anglo-Iranian Oil Company in Persia.” About six months later, in February 1953, a new joint Eisenhower-Churchill offer was made specifying terms of payment, though not the amount, of compensation to be paid the British. Under Eisenhower’s prodding, on March 8, 1953 Eden and Dulles issued a joint communiqué an important part of which concerned the joint proposal. Eden said the British Government was determined to stand on the proposals presented to Prime Minister Mosaddeq on February 20, 1953. “These proposals were the result of many conversations and careful study of all the factors involved. In the opinion of the United States Government these proposals are reasonable and fair. If agreed to: a) Iran would retain control of its own oil industry and of its own oil policies. b) The problem of compensation would be disposed of in such a way that there would be no sacrifice of principles which form the very base of international intercourse among free nations, and the payment of compensation would be fully compatible with the rehabilitation of Iran’s economy. c) Iran would have full opportunity to enter into arrangements whereby it could sell its oil in substantial quantities at competitive commercial prices in world markets. d) There would be placed at Iran’s disposal sufficient funds, to be repaid in oil, to meet its immediate financial problems pending resumption of the flow of revenue from its oil industry.”[4]  Mosaddeq refused. The United States, at war in Korea, faced with the loss of China to communism, and afraid that the Soviets would now have an opportunity to expand into Iran as they already had established control in Eastern Europe, agreed to work jointly with the British on a British plan to overthrow Mosaddeq. In time the formulation and execution of the plan was transferred to the CIA.

Given the extent of the American assistance to Iran in the 1940s and 1950s, politically especially in the Azerbaijan case and developmentally under the Truman Point IV Program, it is unfortunate that the United States succumbed to British prodding to undertake the plan code-named TPAJAX to overthrow Mosaddeq. TPAJAX, however, was a complete failure; nonetheless, it left a malevolent effect on the Iranian body politic. The CIA presence distorted the facts, including the role CIA played in the event. The urge to prop up the fledgling CIA in 1953 and Iranians’ proclivity to assign responsibility to others made of the CIA a seemingly omnipotent force with the power to move heaven and earth. This false history, fostered by pro-Mosaddeq Iranians and liberal and leftist westerners, has diminished Mosaddeq, demonized the shah, and turned Iranians into traitors or wimps. In this history Mosaddeq, a hero supported by a nation that uniformly declares “Mosaddeq or death,” succumbs to an American armed with a bag of money. Is this because Iranians are villains, politically emasculated betrayers, or cowards? The alternative is to make the United States, in this case its stand-in, the CIA– omnipotent. The intellectual trick is to equate intention with results. It was the CIA that overthrew Mosaddeq because that is what the CIA set out to do, and the CIA, like the United States, like England and Russia before the United States, and like God before all of them, was able to do what it pleased. But except perhaps in spy novels, the CIA has never been as omniscient or omnipotent as it has pretended, or been made out, to be.

I have documented in The Life and Times of the Shah the utter absurdity of the claim that the CIA plan caused the overthrow of Mosaddeq. The Secret Report explaining the CIA plan, and Kermit Roosevelt’s Countercoup, are facts fictionalized. The Secret Report posits the most obvious players: the shah, because he was the only person constitutionally authorized to dismiss Mosaddeq; Major General Fazlollah Zahedi, because he was the only person who had declared himself a candidate for prime minister; the military because it was loyal to the shah and also because without its cooperation no such plan could succeed; and the people in the streets because their support would legitimize and finalize the overthrow. All of these were involved in achieving the final result, but none because of any steps taken by the CIA. In fact, every primary document in relevant archives such as the British Public Record Office, US State Department archives, or the Foreign Relations of the United States attests that throughout Mosaddeq’s premiership the shah supported Mosaddeq. The CIA Secret Report on TPAJAX laments that the shah rebuffed every individual who approached him on behalf of the CIA. To Iranians who asked him to use his constitutional authority to dismiss Mosaddeq he invariably answered, as he had answered CIA envoys Schwarzkopf and Roosevelt, that he would take appropriate action when he thought his office allowed him, and he dismissed Mosaddeq only after Mosaddeq dissolved the 17th Majles, clearing the way for him. Mosaddeq at first accepted the decree but subsequently, advised by his colleagues, refused to accept the decree of dismissal, called it a coup by the Imperial Guard, and made no reference to the shah’s decree. The shah left the country, Mosaddeq remained prime minister and minister of defense as he had been for the past year. The CIA headquarters ordered its agents to leave Iran. The envoys were in hiding. They had no idea of what was happening in Iran during the four days between the shah’s departure and Mosaddeq’s fall. In the first three days the streets were in the hands mainly of the Tudeh. On the third day, the Tudeh demanded the establishment of a democratic republic of Iran. That morning US Ambassdor Loy Henderson met with Mosaddeq and expressed the United States’ worries about the turn of events. Mosaddeq, himself worried, ordered the police and the military to stop the Tudeh. As they attacked the Tudeh demonstrators, the police and the military shouted long live the shah. That evening the Tudeh retrenched and decided to stay away the next day, a decision several of its leaders would subsequently regret. The next day, on the 19th of August, a small group of pro-shah demonstrators took off from the bazaar and over the day grew to a larger size. That day, the Tudeh being away, literally no one rose to defend Mosaddeq in Tehran or across the nation.

The shah returned to Iran triumphant, by all accounts behaving and believing that he had received a new mandate from the Iranian people. Nothing in his treatment of Iranians or Americans suggests that he thought otherwise. The Islamist regime’s claim that the CIA overthrew Mosaddeq and brought back the shah is at best a political and diplomatic ploy. For the Americans who make such a claim, more often than not the claim results from a combination of hubris, ignorance of the facts, and/or, as in the case of Kinzer’s All the Shah’s Men, a means of opposing US intervention in other countries. For the Iranians, I believe that it is more honorable, and closer to the truth, to maintain that Iran stood up for its rights against an exploiting foreign country, fought valiantly, but faced with, and not sufficiently conversant with the weight of, the combined powers of the United States, Great Britain, and International Oil, fell short of success.

[1] Jahangir Amuzegar, Iran: An Economic Profile, Washington, DC, The Middle East Institute, 1977, ix.
[2] See Gholam Reza Afkhami The Life and Times of the Shah, Berkeley, University of California Press, 2009.
[3] See the Web site of Mohammad Mehdi Abd-e Khodai, member of Fadaiyan Islam and son of Ayatollah Sheikh  Gholam Hossein Tabrizi,  Also in Afkhami, Op. cit. 372.
[4] The Times, Monday March 9 1953.