From Shahs to the CIA: The History of Western Intervention in Iran (Part 1)


Tyler Durden | Zero Hedge – TRANSCEND Media Service

“Once you understand what people want, you can’t hate them anymore. You can fear them, but you can’t hate them, because you can find the same desires in your own heart” – concluded Andrew Wiggins in the novel Speaker for the Dead.

When Americans hear the word Iran, many have a sort of knee-jerk visceral reaction.  The very mention of the word conjures up frightful images of be-turbaned bearded imams leading mobs of Kalashnikov-carrying Muslim men and women whose faces are grotesquely contorted by intense anger as they enthusiastically wave banners bearing squiggly lines, no doubt saying, “Death to America”. 

Such specters are no frightful flights of fantasy, but reflect a real time and place in Iranian history. The year was 1979 and the place was Tehran. But the Islamic Revolution and subsequent American embassy hostage crisis which shocked the world, catching the West completely off guard, did not materialize in a vacuum. The chaotic domino effect which would lead modern Iran into the hands of the Ayatollahs was set off from the moment the CIA intervened with its 1953 coup d’état in Tehran, which became known as ‘Operation Ajax’.


The opening sequence from the 2012 movie ‘Argo’ features a brief history of aggressive Western intervention which shaped modern Iran.

But Western intervention in Iran’s affairs actually started many decades prior even to the CIA’s well-known covert operation with the establishment of the Anglo-Persian Oil Company, or today’s British Petroleum (BP). After this, the 20th century witnessed a series of external interventions in Iran – a pattern which could potentially be continued now at the beginning of the 21st century as officials in the US and Israeli governments are now calling for action in support of protesters. 

However, few officials and pundits in the West understand or care to know the tragic and fascinating history of Iran and Western interventionism there, even while feigning to speak on behalf of “the Iranian people”. To understand modern Iran and the chaotic events leading to the Islamic revolution of 1979, we have to begin with ancient history to gain a sense of Iranians’ self-understanding of their national heritage and identity, and then launch into the 20th century Iranian identity crisis brought about by foreign domination.

Anglo-Persian Oil Company (APOC, later called the Anglo-Iranian Oil Company, and future British Petroleum/BP).

Belief in “Persian Exceptionalism” and Revolution

Iranian historian and professor at Tehran University, Sadegh Zibakalam, once defined the idea of “Iranian exceptionalism” as the dominant cultural narrative of modern Iran. Zibakalam explained this as “One of the strange features of 20th century Iranian leaders has been a tendency to perceive themselves, their government, and Iran as serious challengers to the present world order. Given the fact that the present world order is very much a Western dominated system, the Iranian leaders’ historic “crusade” has been broadly anti-Western. Shah Muhammad Reza Pahlavi as well as his successors have perceived their respective regime as offering the world a different system of leadership – one that is far superior to that of the West in many respects. Thus, Iranian “exceptionalism” rests on two main pillars: the negation of the present world order and the belief in the inherent superiority of Iranian civilization.”

This self-perception arises from the Iranian people being descendants of well-known historical rulers and an ancient people that civilized the desert of what was known to the rest of the world as Persia, and to us in our day Iran.  The ruins of Persepolis hearken back several millennia to the days of the great Persian kings Cyrus, Xerxes, and Darius who in the magnificent Hall of Audience received the tributes of the various and sundry nations they conquered: the Elamites, Arachosians, Armenians, Ethiopians, Thracians, Ionians, Arabs, Assyrians, and Indians.  They constituted an empire in every sense of the word, dominating some of the richest lands from Greece in the Eastern Mediterranean through Turkey in Asia Minor, northward to Lebanon, Israel, Egypt and Libya and then to as far East as the Indus river, engulfing the Caucasus along the way.

In so doing, they spread their knowledge of science, poetry, painting, architecture, and their Zoroastrian faith to the ends of the  world.  This faith ingrained in them the idea that it is the responsibility of everyone, rich and poor, young and old, to strive to attain and establish justice here in this world in much the same way that the Hebrews sought it through their Torah and the Buddhists through their Tao.  The Persians were among those first great civilizations that turned men’s faces to the heavens and the stars challenging them to find meaning and purpose in a world replete with suffering and misery and to prepare their hearts, minds, and souls for the judgement that awaited them upon departing this life.  Rulers, great and powerful though they be, were not exempt from this the common lot of man and thus were expected to rule justly guided by the light of their revealed religion.  When they failed to do so, their subjects had the right to rise up and overthrow them.  In this they were not exceptional. This is pattern that repeated itself time and time again through the long history of the Persians.

Birth of Shi’ism and Its ‘Underdog’ Identity

These conceptions of justice and of the duties of rulers remained a constant in the lives of the Persians, even after Darius and his empire fell and was absorbed by Alexander the Great in his empire in 334 BC.  By assimilating and reshaping the culture of their conquers to fit their Zoroastrian faith, they continued  to flourish, so much so that by the third century AD they had gained enough strength to lay siege to and conquer Antioch, Jerusalem, and Alexandria, only to be repelled by the Byzantines at the walls of Constantinople in 626 AD.  The death blow, however, came not at the hands of the Byzantine Christians, but by the invading Arabs who in the name of their leader and prophet, Mohammed, devastatingly defeated the morally impoverished Sasanian rulers, thus marking the end of the pre-Islamic dynasties in Persia. 

Having been forcibly converted, the Persians set out to assimilate and reshape Islam, in much the same way they had done with the Greeks almost 1,000 years earlier, the result of which was a form of Islam different from the one their conquers had intended for them to accept, much to their consternation.  Out of the martyrdoms of Ali and Hussein, relatives of Mohammed and rightful heirs to the caliphate, so they believed, was born Shia Islam.  Thus, to their beliefs of justice and righteousness, were added the desire to cling dearly to those beliefs even to the point of death.

Corrupt Shahs Sell Out to Western Imperial Powers

For the next eight centuries the Persians endured, survived, and prospered even against the backdrop of the brutal rampages of the Seljuk Turks and the savage invasions of Genghis Khan’s hordes. Throughout those years, Iranians made great strides in music, poetry, architecture, and philosophy by sending their most learned  to the centers of learning throughout Europe where they discovered Socrates, Plato, Aristotle, Euclid, Archimedes, and Ptolemy. In 1501 the militant Shiite, Ismail ushered in the fruitful, albeit repressive, Safavid dynasty that lasted until 1722, when Abbas Shah, the greatest and last of the Safavid kings died.  Abas Shah was a great builder of roads and cities, and an indefatigable  promoter or industry and trades throughout his empire.

In the chaos that followed his death, Iran experienced foreign invasions and violent internal struggles for power for the next 75 years.  By the end of the century, the Qajar’s, led by Agha Muhammad Khan, wrested power away from the other competing factions and once again united the country.  The Qajars were weak and greedy monarchs who where all too ready to hand over their country’s riches to the country, usually Britain or Russia, that had the deepest pockets with little regard for the well being of their subjects. These corrupt rulers, more than any other internal factor, set the stage for the violent struggle the Iranians waged for freedom, democracy, and national sovereignty throughout the first half of the 20th century.

Nasser ud-Din Shah was one the first of the Qajar monarchs that the Russians and British intimidated, flattered, and bought.  By 1872, ud-Din had virtually depleted the money he had stolen from his subjects through oppressive taxation and illegal seizures of property, so much so, that he could no longer afford his decadent and luxurious life style. To raise cash quickly, that year, Nasser ud-Din made a secret deal with the British through Baron Julius de Reuter whereby, for a paltry sum, the British were granted the exclusive right to operate and manage Iran’s vast irrigation system, mine its minerals, lay its railroads, manage its banks, and print its money. With unimaginable glee, Lord Curzon wrote that his deal with Iran was “the most complete and extraordinary surrender of the entire industrial resources of a kingdom into foreign hands that has probably ever been dreamt of, much less accomplished in history.”  The concession had the predictable outcome of outraging common Iranians.

Britain’s Thirst for Persian Resources

In 1891 the Shah found himself strapped for cash once again. This time he decided to sell his country’s tobacco industry to the British Tobacco Corporation (BTC) for a mere £15,000.  In so doing he stole from the Iranian his birthright to cultivate his native soil and enjoy the fruits of his labor thereby enriching his family, community, and country. There was no debate or vote since, by the rights of kings, he had the divinely ordained authority to dispose of his property, which is how he saw Iran, as he saw fit without consultation or even taking into consideration the effects such concessions would have on his people.  Such actions only served to awaken the Iranians to the gross injustice of their political system and the necessity to replace it with one that existed to benefit all Iranians, not just the ruling class.

Meanwhile, the budding nationalistic spirit of neighboring and European countries, found its way into Iran through its educated class that readily consumed newspapers and monographs of the subversive type.  These new and strange ideas challenged the belief in the absolute authority of the shah and revived once again the ancient Zoroastrian and Shia belief that rulers must be just and once they veer from that path, their subjects have the right and duty to remove them.  Through this cross pollination of ideas the Iranians joined the growing chorus of nations that rejected despotism and authoritarianism and demanded from their rulers greater control over their individual lives as well as control of their country and its resources through the democratic process or face violent revolution, such as those revolutions carried out by the French and the Americans before them.

Iran’s first real taste of nationalism and came shortly after the tobacco concession. A national boycott of tobacco was called to force the shah to renegotiate with the British Tobacco Corporation.  The boycott was a success and the shah had no choice but to inform the British that his earlier concession was in effect cancelled.  But to appease the ire of his wealthy masters, the shah agreed to saddle his Iranians subjects with crippling debt through the Imperial Bank of Persia, another British corporation.  Thus, Iran lay once again prostrate and humiliated before their colonial lords.  On May 1, 1896, after giving thanks for a his fifty year reign at a mosque in Tehran, the rotten tree that was Nasser ud-Din saw was violently hewn down by ultra-national pan-Islamists who saw the shah and his ilk as nothing more than “good-for-nothing aristocratic bastards and thugs, plaguing the lives of Muslims at large.”

Nasser’s successor, Muzzaffar al-Din Shah proved to be no better at being a just and faithful ruler than had his father.  He inherited from his father the expensive and humiliating habit of taking out large loans from the Russians and British to finance his lavish tours through Europe all the while ignoring the cries of his subjects for reform and relief from the intolerable  burden of food shortages, unemployment, and skyrocketing inflation. With those funds exhausted, Muzzaffar turned to his father’s practice of selling his country’s patrimony to finance his expensive tastes.  In 1901 the infamous British oil tycoon William Knox D’Arcy gave Muzzaffar a miserable £50,000 and a promise of 16 percent in royalties from annual profits.  In return, the Shah gave him the exclusive rights for 60 years to do what he wanted to with the sea of oil that flowed beneath the Iranian sand.  Like his father before him, he managed Iranian resources with little regard for his subjects whose livelihoods were dependent on those resources and with an eye to enriching himself.  He stole from his own people and sold what was not his to sell.

Prelude to a Coup: Enter Future Prime Minister Mohammad Mosaddegh

The Iranians, themselves, were keenly aware of this grave injustice and at the end of 1905, they took to the streets to protest the rise in food prices – demonstrations which often unraveled into riots and clashes with military forces.  They demanded that the Shah listen to the voices of his people and establish a form of government that was governed by a constitution and that would allow their voices to be heard and obeyed.  In the words of the revolutionaries they demanded “national consultative assembly to insure that the law is executed equally in all parts of Iran, so that there can be no difference between high and low, and all may obtain redress of their grievances”.  These riots forced Muzaffar ud-Din to do what no other Iranian monarch had heretofore done and on the fifth of August 1906, by royal decree establish a parliament, or majles, thus laying the foundation for a constitutional monarchy.  Among those young reformers that pressed their case for a constitution was the young Mohammad Mosaddegh, the man who would make Iranian nationalism his life’s work and obsession and which put him on a collision course with two of the world’s superpowers some 40 years later.

The country’s first parliamentary elections were held in the fall of 1906, in which only healthy “desirable” males were allowed to vote.  The first majles held its maiden session in October of 1906.  Their first order of business was to draft a constitution, but rather than trying to reinvent the wheel, the majles modeled their own constitution after the Belgium constitution which by the standards of the day was considered the most progressive in Europe. Right away the majles began to butt heads with the new Shah, Muhammad-Ali by denying him foreign loans for his personal use.  This was just the first of many clashes to come between the majles and the Shah.

By 1907 the country was engulfed in a civil war between the constitutional revolutionaries and those loyal to the Shah.  The violence came to a head in June of 1908 when the Shah’s elite fighting unit overwhelmed the revolutionaries and utterly crushed them.  Thus, after only two years Iran’s nascent constitutional democracy was snuffed out.  Though never legally abolished, the majles after 1908 was seen by the Iranians as a sham assembly of handpicked “desirables” that rubberstamped the shah’s capricious decisions.  Many of the revolutionaries were executed and those that survived fled to Europe, some to plan their return, others to forget the misery of their homeland.  Among them was Mohammad Mosaddegh.

Britain Takes Control through the Anglo-Persian Oil Company

With the bothersome majles out of the way, Muhammad-Ali Shah could once again turn his attentions to raising money for his personal expenditures.  He had to look no further than the deal his father made with D’Arcy in 1901. D’Arcy’s investment paid off in a big way when in 1908 the Burmah Oil Company, who bought D’Arcy’s lucrative rights, struck oil at Masjed Soleyman.  One year later the company changed its name and became the Anglo-Persian Oil Company (APOC, or later Anglo-Iranian Oil Company, and future British Petroleum). 

About the same time Winston Churchill, then the First Lord Admiral of the Royal British Navy, finalized the process whereby oil replaced coal as the fuel that powered the vast British navy.  With that, England’s need for oil sky rocketed.  To meet the soaring demand for oil, that same year the British opened the Abadan in Iran refinery and in 1914, and to ensure that the oil economically found its way to its military, the British government bought 52.5 percent of the shares in APOC.  This is one of the most ironic and hypocritical facts of the entire saga given that the British government had no qualms about nationalizing the oil industry in its own country, but were prepared to ignite war because Iran had made the same choice in the 1950’s.

“The Empire Must Go On”

Once Europe erupted in world war, the British dispatched their armed forced to refineries all over Iran in order to protect what they considered their property – Iranian oil.  After the cessation of hostilities in 1919, the British bribed and intimidated the new regime of Ahmad Shah into accepting the terms of the much hated Anglo Persian Agreement which in all but name, made Iran a protectorate of the British Empire.  No longer would the Iranians control their own army, transportation system, and communications network.  It all passed under the control British occupiers and with it the last vestiges of Iranian sovereignty. This once again ignited the fervent nationalist spirit across Iran and new rounds of protests and opposition.

Even the U.S. president, Woodrow Wilson, disapproved of the agreement.  But, true to their colonial and imperialist spirit, the British rebuffed such protestations and opposition by saying, “These people have got to be taught at whatever cost to them, that they cannot get on without us.  I don’t at all mind their noses being rubbed in the dust.”  The empire must go on.

* * *

Part II: The CIA’s covert intervention and Iran’s path to the 1979 Islamic Revolution.


Zero Hedge is an English-language financial blog that aggregates news and presents editorial opinions from original and outside sources. The news portion of the site is written by a group of editors who collectively write under the pseudonym “Tyler Durden” (a character from the novel and film Fight Club).

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