The Iranian Drama

Shah Mohammed Reza Pahlavi has left the United States, bringing the Iranian drama nearly to a close. The final act in the drama is not yet over as we go to press. We do not know whether the hostages who have been held in the American embassy in Teheran since November 4 will be “put on trial immediately,” as the Iranian students told ABC News, or whether they will be released and allowed to return home.

In the meantime, the Shah of Iran has taken flight. On Saturday, December 15, he mysteriously left his sanctuary at the Lackland Air Force Base outside of San Antonio, Texas, and with little fanfare arrived at a small island off the coast of Panama. Whether this will prove to be a permanent haven for the deposed ruler, no one seems to know. For months now, the international pariah has been bounding ceremoniously across the world from one temporary refuge to another: Egypt, Morocco, the Bahamas, Mexico, the U.S., and now Panama.

After he was admitted to a New York City hospital on October 23, for supposed “emergency” medical care, the Carter Administration began nervously looking for a refuge for the Shah, but at first had little luck. It was assumed that after receiving “medical treatment,” the Shah would return to Mexico, but on Thursday, November 29, the Mexican government announced that it would not renew his visa, throwing the situation into chaos. One by one, possible sanctuaries were eliminated. The Shah did not want to go to Egypt, or to South Africa. Switzerland would not admit him, claiming that they could not “guarantee his safety.” Bermuda’s Premier David Gibbons said that the Shah could not return there “for security reasons,” and both Brazil and Argentina pretended never to have heard of him. Presidential candidates made the situation even touchier: Ronald Reagan said that we should grant the Shah “permanent asylum” because he was our “friend,” while Edward Kennedy, who put his foot in his impressive mouth more than once during the crisis, insisted that the Shah should leave the country as he promised he would do. Carter decided to have it both ways: he insisted that the Shah would decide when he would leave, and then sent Administration officials scurrying off to find somewhere for him to go. Finally, Panama agreed to give him refuge on an offshore island, and the Flying Dutchman landed, thanking the people of Panama and announcing his eagerness to get to know “Panama’s culture” better. It was quite a comedown for the “King of Kings.”

The roots of the crisis

If the Shah’s departure was dramatic and mysterious, even more so was the battle within and without the Administration from January 1979 on over whether to admit the Shah into the United States. For it was that decision, on October 22, which led to Khomeini’s heated denunciation of the U.S. on November 1, which in turn led the students to seize the embassy and their 60 hostages three days later.

When the Shah left Iran on January 16, 1979, handing over the reins of government to his Prime Minister, Shahpur Baktiar, it was assumed by many that he would go to the United States. He left Iran for Egypt, and the next day, January 17, President Carter announced that “he’s now in Egypt and he later will come to our own country.” But, deluded by the hope that his “extended vacation” would soon come to an end and upset with lack of support from the Carter Administration during his final weeks in Iran, the Shah instead left Egypt for Morocco, hoping to be invited back to Iran by the Baktiar government or by the military. It didn’t happen. Instead, the return of long-exiled Shi’ite leader Ayatollah Ruhollah Khomeini led to the toppling of the Baktiar government, dashing the Shah’s hopes. The Shah at that point hoped to come to the U.S., but by that time, the Carter Administration had decided to attempt to normalize relations with the new regime and felt that granting asylum to the deposed Shah would make that impossible. The Administration informed the Shah that the time was “not right” for his admission into the U.S. The Shah was angered and dismayed, and turned to two old and powerful friends for help: David Rockefeller, his longtime friend and banker, and our Secretary-of-State-in-exile, Henry Kissinger.

Kissinger claims that he was first involved at the request of the Administration itself: that in January of 1979, the Carter Administration asked him to help find a “suitable residence” for the Shah in this country, to hasten his departure from Iran. Working with Nelson Rockefeller, Kissinger arranged for the Shah to stay at the Palm Springs estate of the former Nixon ambassador to Britain and publisher of TV Guide, Walter Annenberg.

But it was not to be. When the Carter Administration decided to stall the Shah, his Imperial Majesty turned to the Rockefellers and Kissinger for help directly. In his report for the New York Times on “Key Events of Eight Months of Debate,” over the U.S. decision to admit the Shah, Bernard Gwertzman wrote that

By then, the Shah, often working through his former Ambassador to the United States, Ardeshir Zahedi, had begun asking the Rockefeller family and Mr. Kissinger for help. Through Nelson Rockefeller, the Shah had had the services since January of Robert F. Armao, a public relations man who served until August as an unpaid official greeter for New York City.

David Rockefeller, the chairman of the Chase Manhattan Bank, gave him the help of a close personal aide, Joseph V. Reed. Mr. Reed, whose usual duties include serving as advance man for Mr. Rockefeller’s trips, visited 26 countries this year alone and in several made inquiries on behalf of the Shah.

The problem was that Morocco did not want the Shah to remain, and other nations were not eager to have him either.

Mr. Kissinger volunteered to use his influence in Washington. In late March, it was leaked to a newspaper by sources close to Mr. Kissinger that the Administration was refusing the Shah admission. Mr. Kissinger was able to persuade the British to help get the Shah temporarily into the Bahamas, where he arrived on March 30 with Mr. Armao serving as his chief of staff. (New York Times, 11/18/ 79)

“The Shah is a symbol of the kind of unsavory relationship which the US has typically forged in its interventionist foreign policy, supporting dictators and tyrants in the name of an illusory ‘stability.’ ”

The Shah in glittering full dress regalia, symbol of the power given to him in part by the money and influence of his friend Nelson Rockefeller, then the Vice-President.

But it was always understood by David Rockefeller and Kissinger that the Bahamas were only a temporary refuge. Kissinger met with Secretary Vance in early April to try to change the Administration’s mind. He was put off, and so flew to Mexico in April to persuade the Mexican government to admit the Shah. The Mexicans wavered, then granted the Shah a three-month temporary visa. Rockefeller and Kissinger immediately began working on the Carter Administration, pressuring it to admit the Shah. The Administration, in turn, passed the information about the pressure along to acting Ambassador L. Bruce Laingen in Teheran, who responded that admitting the Shah would not be advisable, and would jeopardize the embassy and its personnel. The continuing pressure was stepped up. Mexican authorities said they wanted the Shah out by October, so Rockefeller and Kissinger looked for a way out of the dilemma. Vice President Mondale was the first major figure in the Carter Administration to cave in, saying that the Shah should be admitted into the U.S. because he had been a “good friend.”

Almost as though it were too coincidental to be true, in late September, Joseph Reed began badgering the State Department, telling them that the Shah was becoming seriously ill, and that he needed treatment only to be had in New York City. The State Department seemed uninterested, so Rockefeller sent a prominent American doctor, Dr. Benjamin H. Kean, to visit the Shah in Mexico. Kean was told that the Shah had had lymph cancer for six years, something which allegedly came as a “complete surprise” to the State Department, and was suffering from jaundice, as well. Secretary Vance finally concluded on “humanitarian grounds” to let the Shah come to New York, damn the consequences.

And the consequences were known. In April, the Iranian government warned Mexico, without success, that bilateral relations would be harmed if it admitted the Shah. On April 23, Iranian officials warned Washington by diplomatic note that any grant of asylum for the Shah from the United States would be considered an “unfriendly act.” According to Don Oberdorfer, writing in the Washington Post, a number of other statements of the same sort came from the Iranian government. Vance sent a message to the American embassy in Teheran on July 26, reporting that the Shah could remain in Mexico only until October, and asked the embassy its assessment of the effect which the entry of the Shah might have “on the well-being and security of the American residents in Iran and especially the employees of the embassy and the relations between us and the Iranian government.” Acting Ambassador Laingen replied with a concern for the possibility that Americans could be taken as hostages. Laingen contacted the government in Iran—at the time, Prime Minister Bazargan and Foreign Minister Yazdi—and told them that the admission of the Shah was being “considered seriously.” The Iranians warned him that the admission of the Shah was “not acceptable.” Then, in late October, U.S. diplomats informed the Iranians that the Shah would arrive in New York City late that night. The Iranians protested, and asked at least to see the Shah’s medical records, or to have independent doctors examine the Shah, to see if the medical reasons were in fact valid. The proposals were rejected in official Washington. A few days later, when Bazargan and Yazdi left Iran for a meeting with Brzezinski in an Arab country, their government fell. Khomeini took to denouncing the U.S., the crisis erupted, and the rest is history.

That the admission of the Shah into the U.S. was in the main not a medical but a political decision can now be confirmed. Administration officials tried desperately to give the impression that the Shah was terminally ill, which proved to be a ruse, and doctors at the New York Hospital-Cornell Medical Center quickly leaked the news. The Shah’s cancer, which he had had for six years, was not terminal; and it had

“It is in fact American foreign policy that was responsible for sending Iran careening backwards to a dogmatic Islamic Republic, headed by the fierce and fanatical Ayatollah Khomeini.”

The Ayatollah Khomeini (left) in the cemetery where he made his first political speech in 15 years, and (right) surrounded by followers while still in exile in Paris.

not prevented him from brutally governing Iran, or from skiing for that matter, and the type of treatment he allegedly received was very mild at best—otherwise it would have interfered with his recovery from the operation for gall-stones. The gallstone operation, of course, could easily have been performed in Mexico City. David Rockefeller himself has claimed that the aim in aiding the Shah was completely a “humanitarian” one, and Henry Kissinger has echoed the same line.

But to question this canard is to raise the question of the real motives behind the admission of the Shah. And it is fitting that the two figures most involved in the decision, Rockefeller and Kissinger, are themselves virtually symbolic figures in the world arena. David Rockefeller is the symbol of amoral international finance, the partisan of State Capitalism, bankrolling the most oppressive regimes, from the Soviet Union to Iran, ever fomenting “business-government partnerships,” which blur the distinction between public and private sectors. A partner in business with the Shah of Iran—he was the Shah’s banker, remains so to this day—Rockefeller befriended the Shah for more than twenty years, forming a joint banking enterprise with him, named Chase-Iranian, owned in partnership by the Iranian government and Chase Manhattan. The Shah also required that all letters of credit issued to Iran be done through Chase Manhattan, which meant that the billions of billions of oil revenues which Iran received over the years—including those since the OPEC price hikes (led by the Shah) in 1973— would be funnelled through Chase. When Rockefeller intervened to aid the deposed Shah, Khomeini, knowing full well their relationship, tried to strike back and withdraw Iranian funds from American banks—mainly Chase Manhattan. But before he could make a move, the Administration, protecting Rockefeller, froze billions in Iranian assets in American banks—mainly Chase Manhattan. Chase then proceeded to what is called “off-setting,” and helped itself to Iranian funds to pay back loans made to the Shah, which Khomeini had balked at paying. The international battle between bankers and governments, scrambling like vultures over as much as $15 billion in Iranian assets, is continuing to this day.

Kissinger, too, is a symbol, of amoral statecraft, the partisan of an interventionist foreign policy, supporting with arms and cash the most oppressive regimes, ever-ready to blur the distinction between private business transactions and the political economy of foreign policy manipulation, and to use foreign policy as a tool for business interests, or to sacrifice business interests as a tool for foreign policy. A strong supporter of the Shah of Iran—much of the Shah’s aggrandizement came during the Nixon and Ford years, i.e. the Kissinger years—Kissinger helped build the power of the Shah, cemented him onto his people’s backs. The Shah became the foremost instance of the Kissinger-inspired “Nixon Doctrine” in practice, whereby other countries would serve as “proxies” for the U.S., building up their own military power to serve American interests. While Rockefeller was involved in helping to bankroll the Shah’s domestic “modernization,” Kissinger was involved in helping to build him up as a military power in the Persian Gulf, instrumental in selling the Shah the arms he needed to make Iran into the superpower of the future that he so desperately wanted.

The Shah as a symbol of US foreign policy

Seeing Rockefeller and Kissinger as symbolic figures—the one, of state intervention in the economy (using political power to amass economic power), the other, of an interventionist foreign policy used to cement “American” interests (setting up a global political order in which power elites can freely interact with stable governments, no matter how oppressive)—can help us to understand a great deal of the background to the Iranian crisis. In fact, the two men exist in a symbiotic relationship. Kissinger, the intellectual, came to the Nixon Administration straight from obscurity through his advisory role to Nelson Rockefeller, and he is also an advisor on international affairs for Chase Manhattan. Rockefeller, the power-broker, is the financial backer. Kissinger, the architect of “world systems,” helped produce the situation in the Middle East which enabled the Shah to ram through 1973’s massive price increases for crude oil. (His foreign policy “achievements” helped produce the 1973 Arab-Israeli war, with the unification of OPEC and the oil embargo as results. Nixon’s wage and price controls further played into the hands of OPEC, by tying the hands of domestic oil producers.) Rockefeller’s Chase Manhattan, on the other hand, collected all oil receipts owed the National Iranian Oil Company (NIOC) because of the price hike. A cozy relationship, to be sure.

But I do not mean to imply that it is economic interest by itself which motivated Rockefeller and Kissinger in their schemes to aid the Shah. Far from it. The real concern of Kissinger and Rockefeller in their “humanitarian” aiding of the deposed tyrant, was the foreign policy implication of not granting the Shah asylum. It is the breakup of American foreign policy that they feared. Kissinger himself has stated this as clearly as anyone, in a lengthy op-ed page article in the Washington Post of November 29, entitled “Kissinger on the Controversy Over the Shah.” Kissinger pointed out that the Shah had been one of our closest allies in foreign policy, and had been seen as such by every recent president:

Every American president for nearly four decades had eagerly accepted the shah’s assistance and proclaimed him as an important friend of the United States. President Truman in 1947 awarded the shah the Legion of Merit for his support of the Allied cause during World War II and in 1949 praised him for his “courage and far-sightedness” and his “earnestness and sincerity in the welfare of his people;” President Eisenhower in 1954 paid tribute to the shah for his “enlightened leadership.” President Kennedy in 1962 hailed the shah for “identifying himself with the best aspirations of his people.” President Johnson in 1964 lauded the shah as a “reformist 20th century monarch,” and in 1965 praised his “wisdom and compassion... perception and statesmanship.” President Nixon in 1969 declared that the shah had brought about “a revolution in terms of social and economic and political progress.” President Ford in 1975 called the shah “one of the world’s great statesmen.” President Carter in 1977 praised Iran as a “very stabilizing force in the world at large” and in 1978 lauded the shah for his “progressive attitude” which was the “source of much of the opposition to him in Iran.”

Kissinger pointed out that such quotations could be multiplied endlessly. Precisely so. The Shah of Iran was a symbol of the kind of relationship which the U.S. had formed in its interventionist foreign policy, supporting dictators and corrupt tyrants in the name of illusory “stability.” Kissinger himself acknowledges:

I do not doubt that wrongs were committed by the shah’s government in his long rule; the question is how appropriate it is to raise them, after four decades of close association, in the period of the shah’s travail. I have been deeply worried about the foreign policy consequences of spurning him. What will other friends of the United States in the area, in comparably perilous situations and perhaps more complex domestic circumstances—leaders essential for a moderate evolution of the whole region—conclude if we turn against a man whom seven American presidents had lauded as a loyal ally and a progressive leader?

In short, Kissinger is striking at the heart of the matter: to give up the Shah, to refuse him refuge, is to give up America’s interventionist foreign policy, with its decades-long record of support for tyranny whenever convenient. We cannot expect brutal tyrants to trust the American government if, in the event of revolt, that government cannot or will not guarantee their safety.

In thinking that, Henry Kissinger is quite right. And so, to keep our foreign policy, Kissinger is eager to provide asylum for the Shah. He never considers the alternative: to be honest about the Shah precisely when it has become an issue, to face squarely who and what we have so gleefully supported over the past few decades, and to reexamine, and reject completely, the foreign policy which has led to the Iranian crisis in the first place. And more: the foreign policy which, if continued in an age of crisis and revolution, will lead us down the road to war.

The Pahlavi dynasty

His Imperial Majesty Mohammed Reza Pahlavi, Shah of Shahs, King of Kings, Light of the Aryans, was born a commoner, the son of Reza Khan, in 1919. Though he often staged vastly expensive ceremonies to celebrate the Iranian monarchy and the Pahlavi dynasty—one, in the early 1970s, cost more than $100 million—the dynasty itself lasted barely 53 years.

Reza Khan was born on March 16, 1878, son of Abbas Ali Khan, a major in the Savadkuh Regiment of the Persian army. Reza Khan joined the Russian-officered Cossack Brigade at the age of fifteen, and rose steadfastly from the ranks to officer level, taking part in a number of military campaigns against unruly tribes in the mountain areas of Gilan, Mazandaran and Azarbayjan—this last, the same area that was recently in revolt against Khomeini’s rule. He rose to the position of commander of his majesty Ahmad Shah’s Cossack division in 1921, gained in power, and helped stage a coup against the Shah, whom he considered a weakling. In short, Shah Mohammed Reza Pahlavi’s father got the Iranian throne by seizing it. On October 31, 1925, the Majles (lower house of the Iranian legislature) passed a bill deposing the Qajar dynasty, appointing Reza Khan head of state.

On December 12, 1925, the Constituency Assembly voted to vest the monarchy in the person of Reza Shah Pahlavi—he had taken the name to link himself to Persian tradition—and his male successors. Four months later, Reza Shah Pahlavi placed the crown on his own head, and his six year old son became the crown prince.

Born in violence, Reza Shah’s reign continued in the same vein. With Reza Shah we begin the path, followed by his son, of so-called “modernization” aided by continual growth in government revenue from oil. Reza Shah is known by many as the “father of modern Iran,” and there is more than a germ of truth to the claim. He began the process of shaping Iran into the image of the West, using violence and brutality to create replicas of Western institutions.

This indeed is the continuing contradiction which lies behind so much of the “modernization” or “Westernization” which is taking place in the Third World, one with which Western development economists have never come adequately to grips. There are in fact always two routes to progress: the path of free, spontaneous deveopment, of free men and women engaging in voluntary exchanges, producing economic growth through their own voluntary saving and investment, changing their own social mores through their own growing understanding; and the path of state coercion, violence, and planning, which imposes a preconceived notion of progress on men and women at the point of a gun. The Pahlavi dynasty has always followed the second route, backed by Western governments anxious to use Iran’s oil resources for their own benefit.

Building a “Modern State”

We can see how Western partisans of the Pahlavis’ “modernization” perceive the situation in Iran by glancing at the Hoover Institution’s Iran Under the Pahlavis, edited by George Lenczowski. The book is dedicated to “the people of Iran whose ancient and unique civilization is experiencing in the mid-twentieth century a spectacular resurgence and progress for the benefit of their own and the world at large,” and never once, in its comprehensive, twenty-page index, condescends to mention the word “torture.” Reza Shah’s accomplishments, according to the study, “could be summed up under three headings: building up the infrastructure of a modern state, asserting independence from foreign domination, and launching socio-cultural reforms.” He laid down “the foundations without which a modern state could not function. These included assertion of government authority and national unification in the face of various centrifugal and anarchistic forces; the creation of a reliable army under national command; establishment of a modern fiscal system based on rational organization; and development of the minimum of communications and transportation facilities compatible with the requirements of a modern state.”

The facts are that Reza Shah seized a quarter of Iran’s arable land as his own, “becoming probably the biggest landowner in Asia at the time” and brutally crushing anyone who resisted his land theft, as William Forbis writes in his newly published work Fall of the Peacock Throne: The Story of Iran (Harper & Row, Publishers). The “assertion of government authority” and the advancement of “national unification in the face of various centrifugal and anarchistic forces” of which the Hoover Institution study writes, in reality came down to the fact that the Shah tried to smash the nomadic tribes in Iran, bringing them under central government control. He poisoned their water, a heinous crime in any desert area, and attempted to drive them into populated regions where they could be controlled. He instituted the draft—that “creation of a reliable army” we read about—and used his army to combat his people’s “anarchistic tendencies,” which meant their desire to live free of central government control. The “establishment of a modern fiscal system” amounted to the systematic imposition of taxation and the creation of central banking, which would later lead to the explosion of inflation under his son. He did indeed build “the infrastructure of a modern state,” but in this age of totalitarianism, that is an ominous accomplishment.

Reza Shah’s positive reforms—the status of women was improved—are very real, but they pale in comparison with his crimes. His son was to follow in his footsteps, this time enlisting all the aid which Western technocrats, econometricians, and Welfare-Warfare State “progressive reformers” had to offer.

Reza Shah was caught in the crossfire of World War II, and it led to his downfall. He was sympathetic to the Axis powers, and Iran was occupied by the Russians and the British during the war. He was forced to abdicate on September 16, 1941, and handed over the frayed reins of power to his son, Mohammed Reza Pahlavi, who was all of twenty-one years old. Installed by the Allied powers during the war, the young Shah was a virtual puppet and had almost no power for several years. He had been educated in Western ways in Europe, and slowly set about consolidating his power over his countrymen. Western statesmen were to help: Franklin Roosevelt began the process in 1943, when he began to think of Iran as a “showcase of American development aid after the war,” as Forbis writes. But more important still was the growing importance of oil.

“As late as 1978, the Carter Administration regarded the Shah as a force for ‘stability’ and ‘progress,’ but by 1979, it took personal intervention by Henry Kissinger and David Rockefeller to get the Shah into this country.”

US foreign policy toward Iran is currently in the hands of these men: President Carter, The Shah, Secretary of State Vance, Vice-President Mondale and Secretary of Defense Brown.

Oil had been discovered for the first time in the Middle East on May 26, 1908, and, as Robert Graham, correspondent for the Financial Times of London wrote in his book Iran: The Illusion of Power, “the impact of this discovery was felt only slowly; and at first more by Britain than Iran. The formation of the Anglo-Persian Oil Company (APOC) in 1909 and first production in 1912 was a major factor in deciding the British Admiralty to switch from coal to oil on the eve of the First World War. Also, because Winston Churchill as First Lord of the Admiralty wanted Britain to own directly at least part of the nation’s oil needs, this led to the purchase of a British government stake in APOC.” Oil production and revenue increased dramatically, and after World War II, led to a power struggle in Iran which was to see Shah Mohammed Reza Pahlavi a Western-backed victor.

The real power in Iran at the beginning of the 1950s was in the hands of Mohammed Mossadegh, Prime Minister of Iran, who came to power on April 28, 1951, at the age of seventy. Mossadegh attempted to sharply reduce the power of the young Shah, whom he correctly saw as corrupt and ruthless, and led a battle against the control of Iran’s oil by foreign governments, notably Britain and the United States. The British Labour government had already begun, in Britain, the process of nationalizing industries, so Mossadegh decided to nationalize oil. All hell broke loose.

The Seven Sisters, major international oil companies—mainly British, French and American—who formed a state-backed cartel in controlling Iranian oil (and much of the other oil in the Middle East) set out to isolate and strangle Iran’s oil production. The British government blocked the sale of Iranian oil, and from 1951 to 1954 the Iranian oil industry virtually closed down.

A power struggle ensued between Mossadegh and the Shah. On August 16 the Shah attempted to replace him, lost, and fled the country. A few days later, the American CIA, taking the initiative, led a coup which deposed Mossadegh and returned the Shah to power, where, with CIA backing, he was to remain for the next 25 years. The second ruler of the Pahlavi dynasty had come into his own; he intended to rule with an iron hand. He had gotten grandiose ideas from his education in Europe, and intended to return Iran to its days of empire and glory.

State planning and the Shah

That his rule would be “harsh” was a foregone conclusion. He himself told interviewer Oriana Fallaci, in this respect: “Believe me, when three quarters of a nation doesn’t know how to read or write, you can provide for reforms only by the strictest authoritarianism.” The strictest authoritarianism it was to be, backed by the continual support of the United States. He decided to “modernize” Iran as quickly as possible, and adopted all the latest Western techniques. State economic planning, implemented with the help of Western-trained technocrats armed with the latest gadgets of macroeconomics, led to fine tuning, forced industrialization, centrally-planned investment, monetary inflation, price controls, and economic chaos. Even torture was aided by the West: SAVAK, set up as the Shah’s secret police in 1957, was trained in torture techniques by the CIA and Israeli Secret Service. Western technicians from Harvard, MIT, and a host of other elite establishment institutions flooded into Iran, tens of thousands of them, to help the “progress” along. Harvard meant business when, in 1968, it awarded the Shah an LL.D., claiming that “the shah is a 20th-century ruler who has found in power a constructive instrument to advance social and economic revolution in an ancient land.” In a deep, spiritual sense, the Shah was as much a Harvard man as Henry Kissinger.

Thrown in for spice was a rotten corruption which permeated the entire Iranian government, particularly the royal family, who over the years skimmed billions of dollars from the oil revenue and taxes. Iran was a veritable “kleptocracy,” to use Stanislav Andreski’s felicitous phrase, a country ruled by graft and corruption. No one did business in Iran without payoffs to the Shah and members of the royal family. And no one did business except by coordinating their activities with the Iranian state. The industrial “private” sector was usually financed by the government, and when it wasn’t the Iranian government, it was foreign governments: the United States, Czechoslovakia, Rumania, the World Bank, ad nauseam.

While the techniques of political control were adapted from the latest Western economic doctrines, the framework-

—a series of fluctuating, unstable and erratic five year plans—was borrowed intact from the Soviet Union. The plans made a shambles of the Iranian economy as they attempted to force industrial “progress” on the nation, complete with a Welfare-Warfare state which the Shah had wanted to use to turn Iran into a veritable superpower. Massive arms purchases were added to the industrialization, and the two combined to wreck the country. Stepped up after the Shah’s “White Revolution” of the early 1960s, which infuriated the clergy, and even more after the OPEC price hike of 1973 saw Iran’s oil revenue skyrocket, the plans worked the way state planning always works: disastrously.

In his book Iran: The Illusion of Power, Robert Graham reports on the successes and failures of the plans. In the area of housing, the Shah decided to make a major new effort, since it was seen as “an essential part of the transformation of Iran.” But “a large-scale housing program was only possible if the government prohibited construction in other sectors.” This it proceeded to do. Those in the private sector protested, but “there was no doubt that government projects came first, especially if military.” The private sector was devastated, and resorted to graft and the black market to get the construction materials it needed for the real, not state-determined, needs of the people.

To fulfill production targets, a massive amount of cement was needed, so a revised plan in the early 1970s “blandly stated that ‘annual production of cement mills will increase from 3.6 million tons to about 20 million tons in the final year of the Fifth Plan.’” In fact, production rose only to a quarter of that goal. The government then issued permits to contractors “which theoretically enabled them to obtain the required quantity of cement at the official price.” But there wasn’t any to be had—no government plan has ever been able to command cement into existence. So, in practice, the much-heralded plan meant that cement was virtually impossible to obtain—except for military projects. In area after area, the plans paraded a set of pompous, unrealistic goals, which were almost never achieved. And when the targets of the plans were achieved, they were generally financial and organizational disasters, laced with corruption.

But there was money, from taxes and oil, and what Iran could not produce, thought the Shah and his advisers, they could buy. Once self-sufficient in food, Iran was reduced to-importing most of what it needed. But food was not all that was imported: Iran’s docks began to clog with thousands upon thousands of tons of imported material. Ships often had to wait weeks and months to unload. But again, there had been poor planning: material was unloaded—and left to rot and rust. There were not enough trucks to carry away the imported materials; thousands of trucks were imported. But there weren’t enough drivers. At one point, eight thousand Koreans were brought in to solve the problem. What resulted was an economy which looked like something out of the Keystone Cops.

In Fall of the Peacock Throne, William Forbis writes:

Pinning an exactly descriptive label to Iran’s economy is difficult. A long-time American adviser to the Shah mulled the question a moment and told me: “Public-sector management—maybe that’s it.” The economist Ali Fekrat observed that “the government has moved into center stage in leading the economy and in providing expanded social and economic service.”

Tens of billions of dollars were squandered in one area after another. The Plan and Budget Organization, the government’s main tool for “guidance,” as it is so quaintly called, was in the forefront of this “planning.” Writes Forbis:

Abustle with economists, sociologists, horn-rimmed administrators, and typewriter-pounding secretaries, the Plan Organization weighs and balances its goals and then prepares the government’s budget. In the $42 billion budget for the Iranian year 1978-1979, for example, the various goals received allocations as follows: economic development, $17.2 billion; the military, $10 billion; health, education and welfare, $8.5 billion. . . . The Plan Organization drew down criticism for insufficient stress on agriculture, communications, and literacy; fog deficiencies in contingency planning; for waste, white elephants, and pet projects. Worse, its largely foreign-educated staff were what one Iranian sociologist called, in Persian, masachuseti—technocrats who might have graduated from Massachusetts Institute of Technology. Massachuseti, he thought when I talked to him, were homogenizing Iranians, neglecting religion, relying too heavily on bureaucracy, and were, in fact, Marxian in their faith in planning growth, centralization, change, and preference for cities over villages. They were cold people, he told me: “They think about Iran as they would think about Ghana or Guatemala. Quantification is everything. Too much ‘macroeconomy.’ The horrible traffic in Tehran shows that they are wrong. I’m very happy about the traffic. It may bring-down the technocrats.”

Forbis draws the obvious conclusion: “Certainly the Plan Organization’s way of thinking was a major cause of the revolt against the Shah.” And, indeed, quantification is part of what led macroeconomic-oriented Westerners to admire Iran’s “progress.” “Progress” is measured by looking at the growth in GNP, and GNP is calculated by adding together consumption, investment, and government spending. The greater the oil revenues—and after 1973 they were fantastic—the greater the government spending. And the greater the government spending, the greater the measurable “well being” of the people. When the Shah spent billions on arms, their well being “increased.” When food rotted on the docks, the people ate better—because more money was being spent on food. When SAVAK spent money mutilating human beings, the standard of living of the Iranian people again shot upwards. Such are the measurements of technocrats, which found virtue in the American intervention in Iran and in the Shah’s “modernization.”

As the oil revenues flowed into Chase Manhattan, and from there to the Shah, the Shah, possessed of delusions of grandeur, recklessly began to escalate his spending on arms. When Britain decided in the late 1960s to pull out of the Middle East, the Shah, encouraged by Nixon and Kissinger to acquire the latest and best in American weaponry, decided that he would become the new superpower in the Persian Gulf.

Five and a half billion dollars was spent on arms in 1974, $7.6 billion in 1975, $8.2 billion in 1976, and $7.9 billion in 1977-78. In the four-year period up to 1976, $10 billion-dollars of arms were purchased. Pentagon planners and defense contractors, who are always quick to help out a customer, kept the Shah well supplied. The military budget for the Iranian year 1978-79 called for another $10 billion. These sums were all far more than Iran could absorb. Military facilities and infrastructures were grossly inadequate, and there were not enough trained personnel to operate, maintain, and support the weapons. Often, newly delivered equipment would lie unused for months. One of the military experts summed it up: “It’s like asking a five-year-old to drive a Cadillac. He can turn the key, but he doesn’t have the wherewithal to drive it.”

The spending led to inflation, especially as the revenues were concentrated in the hands of the royal family. The Shah’s expenditures created jobs in the government, the army, and the police. But real income per capita for the general population declined. The price of food rose 20% in 1977. At the same time, the Shah was spending billions on arms. The disparity of income and the declining real income for most Iranians led to a decline in health and nutrition. The average calorie consumption fell 30% between 1971 and 1976. The poor became even poorer. Slums grew around Tehran, and the population of unemployed and discontented exploded.

The corruption, the inflation, the decline in real income, the waste of billions, the starvation amidst plenty, all added to the revolutionary fervor that led to the Shah’s downfall. In Iran, the people were suffering from too much modernization, not too little. Too much state planning, not too little. Too much Western intervention, not too little. The Shah’s collapse proves once again that massive injections of Western aid and expertise, when imposed from the top down and centralized, will destroy an indigenous economy and culture, and will bring about nothing but misery, poverty, and political unrest.

In his memoirs, the Shah laments that the people never understood him. “Our people are like a flock of sheep,” he writes. “They do not know what is good for them and what is bad for them. They have to be shepherded.” But these particular sheep, in their millions, finally rejected the Shah and his planning—and found a shepherd of their own choosing. Khomeini understood that Iran had been ruined by the Shah’s Western “modernization,” and he promised a return to Islam—not as it had existed in the time of the Caliphs, but as a mythical Golden Age. The people were so enraged that they would have followed anyone who promised to undo the Shah’s work. The return to Islam was simply an effective symbol for the masses to rally around. Khomeini and his revolutionary government are simply continuing the Shah’s methods, but now with an Islamic guise. Khomeini is an excellent example of the New Left that was so popular in the 1960s, a movement that is statist and totalitarian, and which believes that the State should be supreme.

And so Iran continues to be tormented by a totalitarian government, planning, and suppression. It remains to be seen whether the current government will, like the Shah, succumb to the pressure of its own “modernization” and collapse.

was spent on arms from the U.S. alone. In 1978, the Shah came to Carter with a request for $10 billion worth of new military hardware. As Michael Klare reported in The Nation,

According to Industry sources, the Shah’s “shopping list” includes: another seventy Grumman F-14 Tomcat air-superiority fighters (Iran currently has eighty); 140 more General Dynamics F-16 “NATO” fighters (160 are already on order); thirty-one advanced-model McDonnell Douglas F-4E Phantom fighter bombers armed with 1000 Shrike air-to-surface missiles; 150 Lockheed C-130 Hercules transport planes; and three Boeing 747 and twelve Boeing 707 aerial tankers. (10/21/78)

Klare noted that the particular types of weapons included in the above tally sounded an ominous note:

The items now requested suggest offense rather than defense. The F-4s, F-14s and F-16s, when combined with the fleet of Boeing tankers, would enable the Shah to mount air strikes against targets thousands of miles from Iran’s borders.

And since each Hercules transport can carry ninety-two fully equipped soldiers, the 150 C-130s could carry an invasion force of some 13,800 troops. The aggressive nature of these requests is further indicated by the 1000 Shrike missiles, which are intended to knock out air-defense sites during air assaults deep into enemy territory.

That all this arming was taking place in a nation bordering the Soviet Union did nothing to help U.S.-Soviet relations, and the speed of this burgeoning militarism must have given the Soviets cause to worry, adding fuel to the arms race. But the American-backed militarism was also disturbing to the people of Iran, who have had a long history of being manipulated by foreign powers. And a Senate study in 1976 pointed out that because of this foreign interference, “Anti-Americanism could become a serious problem in Iran . . . if there were to be a change in the government.” Precisely so—and now our weapons are in the hands of the Ayatollah Khomeini.

To pay for these massive shipments of arms, oil revenue was not enough, and so the Shah began to churn out money. By 1968, the Iranian equivalent of M1 was 105 billion rials. By 1972, it had increased to 210 billion rials. But the money supply’s growth then began to accelerate, to pay for the “modernization” and the arms: 273 billion rials in 1973, 375 billion rials in 1974, 452 billion in 1975, 664 billion in 1976, 821 billion in 1977, and an astonishing leap to 1398 billion rials by the time the Shah was deposed. This growth in the money supply led to fantastic inflation, as prices skyrocketed in Iran. The Shah responded in typical Nixonian fashion: he clamped price controls on the economy, and the bazaars suffered, as did small merchants who could no longer function. Shortages broke out, and harsh penalties were dealt out to those who dared to violate the Shah’s controls. It was at this point that the Shah lost the support of even those who had still supported him. It was all too evident that, with American help, he was wrecking their economy and their lives. Anti-Americanism began to rise. Demonstrations and protests began in late 1977 and early 1978, and the Shah brutally crushed the demonstrators, killing thousands over the course of the year.

SAVAK, too, stepped up its work, ugly work which saw torture become rampant. It had become one of the most feared secret police agencies in the world, numbering some 30,000 to 60,000 employees, holding tens—some say hundreds—of thousands of Iranians prisoner. People were picked up by SAVAK and swept away, never to be heard from again, in classical terrorist style. Americans had better promote.

In his book The Crowned Cannibals, Reza Baraheni, whom Harper’s has called “Iran’s finest living poet,” described what he and others went through:

They tie you to the upper bed on your back and with the heat coming from a torch or a small heater, they burn your back in order to extract information. Sometimes the burning is extended to the spine, as a result of which paralysis is certain. There were also all sizes of whips hanging from nails on the walls. Electric prods stood on little stools. The nail-plucking instrument stood on the far side. . . . The gallows stood on the other side. They hang you upside down and then someone beats you with a club on your legs, or uses the electric prod on your chest or your genitals, or they lower you down, pull your pants up and one of them tries to rape you while you are still upside down. . . . Not every prisoner goes through the same process, but generally, this is what happens to a prisoner of the first importance. First he is beaten by several torturers at once, with sticks and clubs. If he doesn’t confess, he is hanged upside down and beaten; if this doesn’t work, he is raped; and if he still shows signs of resistance, he is given electric shock which turns him into a howling dog; and if he is still obstinate, his nails and sometimes all his teeth are pulled out, and in certain cases . . . a hot iron rod is put into one side of the face to force its way to the other side, burning the entire mouth and the tongue. A young man was killed in this way. At other times he is thrown down on his stomach on the iron bed and boiling water is pumped into his rectum by an enema. . . . A heavy weight is hung from the testicles of the prisoner, maiming him in only a few minutes. . . . In the case of women, the electric baton is moved over the naked body with the power increased on the breasts and the interstices of the vagina.

Last spring, according to Time magazine, “Anne Burley, an Amnesty International researcher, was shown by the government a SAVAK file that she deems authentic, containing pictures of victims who had been tortured to death. Several were women, she says, and ‘in each case the breasts were mutilated.’” According to the December 10 Time, the Shah, “under international pressure to liberalize his regime . . . gave the secret police a terse oral order in 1975: ‘Don’t take any prisoners. Kill them.’”

Remember this, the next time you hear David Rockefeller or Henry Kissinger prating about their “humanitarian” concerns for the poor deposed Shah.

The lessons of Iran

During the months that they labored to find a refuge for the Shah after the people of Iran had thrown him out like so much garbage, David Rockefeller and Henry Kissinger were desperately trying to save the foreign policy they, and so many other members of the establishment, had worked to erect over several decades. The American technocratic elite had worked with the Shah to achieve his “modernization,” helping to implement the five year plans, the forced industrialization, the breaking down of older ways of life, the militarization of Iran. This was not “progress,” and when the people of Iran revolted against it, there was a backlash against things foreign, and things American in particular.

American foreign policy had in fact sent Iran careening backwards—to an Islamic Republic, headed by the fierce, dogmatic, fanatical Ayatollah Khomeini. As we said last month, Islam has awakened, and America today quite simply lacks the power to impose its will on the Third World. We saw this in the series of riots and demonstrations which rocked American embassies all across Asia.

On November 20, Islamic extremists seized the Great Mosque in Mecca, Saudi Arabia, the holiest site in Islam. Khomeini falsely blamed this on the United States and Israel. “Moslems, rise up and defend Islam!” he thundered.

On November 21, angry Pakistanis stormed and burned the U.S. embassy in Islamabad, killing two Americans; Khomeini called it a “great joy.” For the next few weeks, embassies in one country after another were under assault. An American cultural facility was burned by a mob in Islamabad the same day, another was burned in Lahore, Pakistan; Islamic students attacked a U.S. consulate in Izmir, Turkey, on November 22; in Dacca, Bangladesh, Moslems demonstrated in front of the U.S. embassy. On Friday, th 23rd, Moslem mobs stoned both the U.S. and Soviet consulates in Calcutta, India, setting fires. A week later, on the 10th day of Moharram, one of the holiest days of the Shia Moslem calendar, bombs rocked the U.S. embassy in Thailand, and mobs were beaten back from the embassies in Kuwait and the Philippines in a flurry of anti-American violence. In tiny Kuwait, a mob of several thousand chanting Moslems marched on the U.S. embassy, only to be driven off by tear gas. On December 2, two thousand demonstrators stormed the U.S. embassy in Libya.

What they are demonstrating against is American foreign policy. The students in Iran told the American news media this precisely and explicitly: they like Americans, they proclaimed, it is only their government that they hate. And they hate that government because its foreign policy intervenes in their affairs, saddling them with tyrants who murder, torture and rob. Look at the outrage of the American people at the treatment of 60 American hostages in Teheran. Consider how much greater must be the outrage of the people of Iran. The U.S. installed a tyrant who killed an estimated 60,000 people and then made off with countless billions of dollars. Then, in a “humanitarian” gesture, two of the people most responsible for his recent crimes arranged to have the deposed Shah admitted to the United States for “medical treatment.” Is it any wonder that our embassies are being sacked? Can we expect anything less?

In an article in the December 10 issue of New York, Tad Szulc quoted a respected diplomat, who said a few weeks ago that “the eighties will be the crucible of intense crisis for the United States. You Americans are the target. And no matter what happens, the Middle East and the world won’t ever be the same again. A historical line has been crossed, and you lack the power to draw new lines.”

He was wrong. We do have the power to draw new lines. We have it in our power to take up Kissinger’s challenge: give up the Shah, and you give up our interventionist foreign policy, he said. The U.S. should resolutely renounce both. We should make it clear that the Shah is no longer welcome in this country, and we should make it clear to him why he is no longer welcome. We should stop supporting tyrants, and stop offering deposed tyrants asylum. And to seal the bargain, we should abandon the foreign policy which has brought us to the stage where Americans are vilified and damned and held hostage. We should set to work dismantling government coercion at home, and tell men like Kissinger that they are no longer needed to run our foreign policy and men like David Rockefeller that if they cannot make it in a world free from government privilege, then they cannot make it. Then, repudiating the ugliness of the past few decades, in foreign and domestic policies alike, we should once again become a beacon of hope and of liberty for all the peoples of the world.

Related articles by LR Editor Childs include “Energy and American Foreign Policy” (7/79), and “The crisis in Iran” (1/80).