Section III: Origins of the Country of Iran

The Iran of geopolitics today — a nation-state of roughly 90 million people on the Iranian plateau, organized as a theocratic Islamic Republic — is a creation of the long twentieth century. Its frontiers were drawn in negotiations Iranian governments were too weak to dictate, its modernization was driven by oil revenue Iranian governments did not initially control, and its trauma of foreign intervention is real even when later regimes have weaponized that trauma to justify their own crimes. To tell this story honestly requires holding two truths at once: foreign powers genuinely interfered in Iran's affairs, and the regime that took power in 1979 has used that interference as a license for atrocities that have nothing to do with the original injuries.

The Qajar Decline and the Sale of a Country

The dynasty that ushered Iran into the modern period was the Qajar (1789–1925). Founded by Agha Mohammad Khan, a chieftain of the Qajar Turkic tribe of northern Iran, the dynasty held nominal sovereignty over a vast territory but exercised effective power over very little of it (Amanat, 1997; Abrahamian, 2008). The nineteenth century was a century of accelerating decline. In two disastrous wars with Russia (1804–1813 and 1826–1828), the Qajars lost the entire Caucasus — modern Georgia, Armenia, Azerbaijan, and Dagestan — formalized in the Treaties of Gulistan (1813) and Turkmenchay (1828) (Kazemzadeh, 1968; Atkin, 1980). In the east, the Treaty of Akhal (1881) ceded Turkmen territory to Russia; in the southeast, the British essentially detached what is now western Afghanistan and Baluchistan. By 1900, Iran's effective territory had shrunk dramatically from its eighteenth-century borders.

Worse, the Qajar shahs financed their court extravagances by selling foreign concessions. The 1872 Reuter Concession granted a British subject monopoly rights over Iran's roads, telegraphs, mills, factories, mines, and customs collection — a deal Lord Curzon described as "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" (Curzon, 1892, as cited in Keddie, 2006). Popular outrage forced cancellation. The 1890 Tobacco Concession granted a fifty-year monopoly over Iran's tobacco trade to another British company; the resulting nationwide tobacco boycott — led by Grand Ayatollah Mirza Shirazi from Najaf — forced the Shah to cancel it in 1892, and is widely regarded as the first modern Iranian mass political movement (Keddie, 1966; Abrahamian, 2008). Russia and Britain divided Iran into spheres of influence in the Anglo-Russian Convention of 1907 — Russia taking the north, Britain the southeast, with a neutral zone in between — without consulting any Iranian (Yapp, 1987).

The Constitutional Revolution of 1906

Out of this humiliation came the Constitutional Revolution of 1906. A coalition of bazaar merchants, reformist clerics, and Western-educated intellectuals forced Mozaffar al-Din Shah to grant Iran's first written constitution and establish a Majles (parliament) modeled on Belgium's (Afary, 1996; Bayat, 1991; Ansari, 2023). The Constitution of 1906 declared Twelver Shi'ism the state religion but established constitutional limits on monarchy, an elected legislature, and basic civil rights. It was, in the words of the historian Janet Afary, "the first of its kind in the Islamic world, earlier than the revolution of the Young Turks in 1908" (Afary, 1996). The constitutional order was almost immediately battered — the next shah, Mohammad Ali, bombarded the Majles in 1908 with Russian help — but the constitution survived in form, and the revolutionary memory shaped Iranian political imagination through the twentieth century.

Oil at Masjed Soleyman, 1908

The other foundational event of the early twentieth century happened underground, literally. In 1901, a London-based mining speculator named William Knox D'Arcy obtained a sixty-year concession from the Qajar court giving him exclusive rights to prospect for and extract petroleum across most of Iran in exchange for a 16 percent royalty (Ferrier, 1982; Bamberg, 1994). After seven years of dry holes and dwindling funds, D'Arcy's geologists struck oil at Masjed Soleyman in Khuzestan on May 26, 1908 — the first commercial oil strike in the Middle East. Within a year the concession was reorganized as the Anglo-Persian Oil Company (APOC), and in 1914, on the eve of World War I, the British government — at the instigation of First Lord of the Admiralty Winston Churchill, who was converting the Royal Navy from coal to oil — bought a 51 percent controlling stake (Yergin, 1991). APOC, later Anglo-Iranian Oil Company (AIOC), and eventually British Petroleum (BP), would become the single most consequential foreign actor in twentieth-century Iran.

Reza Shah and the Pahlavi Project

The Pahlavi dynasty arose from the wreckage. Reza Khan, an officer of the Persian Cossack Brigade, led a coup in 1921 that nominally restored a constitutional government while concentrating real power in his own hands as commander-in-chief and then prime minister. In 1925, the Majles deposed the last Qajar shah, Ahmad Shah, and crowned Reza Khan as Reza Shah Pahlavi (Cronin, 2003; Ghani, 2000). His sixteen-year reign was a top-down crash program of state-building modeled on Atatürk's Turkey. He built the Trans-Iranian Railway from the Persian Gulf to the Caspian; established a national army and the conscription that produced it; founded the University of Tehran in 1934; replaced sharia courts with secular tribunals; abolished the veil by decree in 1936; expanded women's education; and standardized the Persian script and modernized the language (Cronin, 2003; Abrahamian, 2008). In 1935, he formally requested that foreign governments use the name "Iran" — the country's own endonym, meaning "land of the Aryans" and in use among Iranians for at least two millennia — in place of the Greek-derived "Persia," which he viewed as both ethnically narrow (referring properly only to Fars province) and politically suggestive of a defeated past (Browne, 1928; Ansari, 2023; Iran Chamber Society, n.d.).

World War II ended Reza Shah's reign. Despite Iran's official neutrality, Reza Shah maintained commercial ties with Nazi Germany and refused to expel German nationals from Iran's railways and industries. In August 1941, Britain and the Soviet Union invaded Iran from the south and north in Operation Countenance, securing the Persian Corridor as a supply line for American Lend-Lease aid to the Soviet Union. The numerically and technologically outmatched Iranian forces collapsed within days. On September 16, 1941, Reza Shah abdicated under Allied pressure; he was exiled, first to Mauritius and then to South Africa, where he died in 1944. His twenty-one-year-old son, Mohammad Reza Pahlavi, was placed on the throne (Stewart, 1988; Skrine, 1962).

Nationalization, Mossadegh, and the 1953 Coup

The new young Shah inherited a country under foreign occupation and an oil industry still controlled by AIOC, whose royalty payments to Iran remained a small fraction of the British government's tax revenue from the same company. Resentment was widespread. In 1951, the Majles voted to nationalize AIOC and elected Mohammad Mossadegh — a constitutional nationalist, Western-educated lawyer, and committed parliamentary democrat — as Prime Minister (Abrahamian, 2013; Kinzer, 2003). The British government responded with an international embargo on Iranian oil; the British Treasury froze Iranian sterling assets; the Royal Navy turned away tankers from Abadan. Britain pressed President Truman to support a coup; Truman refused. When Dwight Eisenhower took office in January 1953, the British shifted their pitch from "Mossadegh is stealing our oil" to "Mossadegh is opening the door to Soviet communism." Eisenhower authorized a joint CIA-MI6 operation — TPAJAX on the American side, Operation Boot on the British — to overthrow Mossadegh. On August 19, 1953, after several days of chaos including a botched first attempt, royalist forces took control of Tehran, arrested Mossadegh, and restored the Shah to full power (Gasiorowski & Byrne, 2004; Kinzer, 2003; Wilber, 1969/2006).

This is the wound the regime invokes more often than any other. Honest accounting requires acknowledging that the United States and the United Kingdom did orchestrate the overthrow of a constitutionally elected Iranian prime minister to protect oil interests, and that this is not a matter of disputed historiography — the CIA itself formally acknowledged the role in 2013 with the declassification of its internal history (National Security Archive, 2013; Risen, 2000). It is equally honest to say that Mossadegh's domestic position had deteriorated significantly by August 1953, that his own confrontations with the Shah, the clergy, and the merchant class had narrowed his base, that the coup found local hands willing to act, and that the regime's later use of 1953 — to delegitimize every form of Western engagement, to justify hostage-taking, terrorism, and the killing of its own citizens — is not a payment America owes for the original wrong. America's debt for 1953 is to the Iranian people, not to the Islamic Republic that has spent forty-five years suppressing them.

The Shah's Era — White Revolution and Oil Modernization

The 1953 coup ushered in the second phase of the Pahlavi era — Mohammad Reza Shah's personal rule, 1953–1979. With AIOC reorganized into a consortium (Iran 50 percent, BP 40 percent, American majors 8 percent split, French and Dutch sharing the remainder), oil revenues began flowing to the Iranian state at unprecedented rates (Yergin, 1991). In January 1963, after a national referendum, the Shah launched the White Revolution: land reform that broke up clerical and aristocratic estates and distributed plots to roughly 1.5 million peasant families; women's suffrage granted the same year; literacy and health corps that sent young university graduates into the villages; profit-sharing in industrial enterprises; and nationalization of forests and water resources (Ansari, 2003; Abrahamian, 2008; Britannica, n.d.). Female literacy, which had stood at perhaps 8 percent in 1956, rose to over 35 percent by 1976; female enrollment in universities reached roughly 30 percent of the student body; women entered the bureaucracy, the professions, and even the military officer corps (Esfandiari, 1997; Afary, 2009).

The 1973 oil shock, in which OPEC production restrictions and the Yom Kippur War sent the price of crude from $3 to nearly $12 per barrel in a year, flooded the Iranian treasury with cash. Iran's GDP grew at double-digit rates in the mid-1970s; the Shah embarked on a vast military buildup, purchasing American F-14s, F-4s, advanced naval assets, and the most sophisticated air-defense systems in the developing world (Cooper, 2018; Mottahedeh, 1985). Yet the oil money also accelerated inflation, drove rural-to-urban migration faster than the cities could absorb, concentrated wealth in a narrow politically connected elite, and produced visible corruption that humiliated traditional society. The traditional bazaar economy was undercut by state-favored industrialists; the rural population that moved to Tehran's slums found neither housing nor work nor the dignity their village patterns had provided; and the clergy, whose lands had been redistributed in 1963 and whose authority had been subordinated to a Westernizing state, nursed grievances that ran from theological objection to material loss (Abrahamian, 2008; Keddie, 2006).

SAVAK and the Inheritance of Repression

Holding all of this together was the SAVAK — Sazeman-e Ettela'at va Amniyat-e Keshvar, the National Intelligence and Security Organization. Established in 1957 with American and Israeli assistance, SAVAK monitored political dissent, infiltrated student and labor groups, ran prisons including the notorious Evin in Tehran, and tortured opponents with techniques that drew international condemnation from Amnesty International and the International Commission of Jurists (Abrahamian, 1999; Amnesty International, 1976; Halliday, 1979). At its peak, SAVAK reportedly employed about 5,000 full-time agents and many more informants. Its excesses united three otherwise disparate opposition movements — secular nationalists who wanted constitutional restoration, Marxist guerrillas (Fedayan, Mojahedin), and Khomeini's Islamist network — in shared loathing of the Shah's regime (Abrahamian, 1999, 2008). When the 1979 revolution came, SAVAK files and SAVAK agents became prime targets; the new regime then turned around and built its own security apparatus, the SAVAMA and later the Ministry of Intelligence (VEVAK) and the Islamic Revolutionary Guard Corps intelligence directorate, drawing on much of SAVAK's former tradecraft and personnel to run a far more sweeping system of internal repression (Buchta, 2000; Ostovar, 2016).

This is the inheritance modern Iran carries into the twenty-first century: a civilization 2,500 years old, a nation-state about a century old, a half-century of oil wealth, a constitution from 1906 honored mostly in the breach, a coup from 1953 endlessly invoked, a White Revolution that genuinely modernized the country while alienating its traditional core, and a security state that the revolutionaries denounced and then perfected. The Iranian people who carry this inheritance are not the regime that misrepresents it. That distinction — between Persia and the Islamic Republic, between Cyrus's tolerance and Khomeini's velayat, between the Iran of Esther and Hafez and the Iran of Evin Prison — is the analytical foundation on which any serious American policy must rest.