Iran’s transformation into a regionally dominant power, rooted in the shah’s longstanding interpretation of his nation’s security needs, was made possible by both phenomenal oil profits and the 1969 Nixon Doctrine. As previously discussed in The Nixon Doctrine Empowers the Shah of Iran, the Nixon-Kissinger announcement provided supporters with a new justification to buy arms that would be used in the Washington interest, a policy which would also allow American defense companies to extract huge profits.

In May 1972, President Nixon personally promised all necessary weapons and technical aid short of nuclear capability to the Iranian regime. The president’s personal promise to the shah made possible large increases in sales to Iran. More importantly, it exempted “sales to Iran from the normal arms sales decision-making processes in the State and Defense Departments.”

Nixon agreed to sell Iran “‘virtually any conventional arms it wanted,’ supported by unlimited American technicians in Iran . . . . It was the first time that any non-industrial country had been allowed to reach the same level as the United States in the ‘state of the art.’ There had been no major review beforehand and Nixon’s decision was passed to the Pentagon with no chance to revise it. It opened the way for the Shah’s next massive expansion and thereafter . . . the Pentagon had difficulty maintaining any logical policy towards Iran, for Nixon’s decision was based not on what the United States thought best, but on what the Shah wanted.

The ability to acquire advanced weaponry solved the shah’s problem as well. As Bromley notes:

In any nation faced with sudden wealth, arms provided the easiest and quickest way to spend money, bringing prestige and new authority to the rulers. Hospitals, schools, or welfare provided huge problems of administration and social disruption, but arms companies brought their own infrastructure and training, making the links with high technology which rulers longed for. And commissions or other bribes increased the incentives, while redistributing part of the wealth on the way.

Moreover, the US was not inclined to discourage orders for arms.

The quickest way to recycle oil money or to ‘sop up the surplus,’ it was said was to sell arms in exchange — much safer and stabler than having the surplus of oil-money ‘sloshing around the short-term capital markets of the world.’

America’s foreign military sales program to the shah rapidly became the largest in the world both in terms of dollar value and in terms of the number of Americans involved in program implementation. Worldwide, America’s arms sales increased from $3.9 billion in 1973 to $8.3 billion in 1974. Of the 1974 total, nearly half — $3.9 billion — went to Iran. Government to government military sales to Iran increased from $524 million in Fiscal Year (FY) 1972 to $3.91 billion in FY 1974, lessening slightly to $2.6 billion in FY 1975. The preliminary sales estimate for FY 1976 was $1.3 billion. Overall, sales in the 1972-1976 period totaled $10.4 billion.

The number of Americans in Iran also jumped, rising from 15,000-16,000 in 1972 to 24,000 in 1976. In the absence of revolution, the number was expected to reach 50,000-60,000 or higher in 1980. Since this activity was predicated on the ambitions of the American defense industry as well as on US and Iranian security considerations, it is worth taking a look at the role that US civilian defense contractors played in Iran’s weapons acquisition program and their impact on urban development.

The operations of two of the major contractors — Bell Helicopter International (BHI) and the Grumman Corporation — were located in Isfahan. In fact, it was in this metropolitan area that oil and arms coalesced, creating conditions which contributed to urban transformation.

By the 1970s Iran’s rentier state had broad influence — politically, socially, and economically.

The shah had adopted a capitalistic program of industrial and economic expansion to be fueled by the regime’s expenditures on industry, construction and services. The program relied on the Third, Fourth, and Fifth Development Plans (1962-1977) for implementation and planning. The expenditures delineated in these plans were closely linked to shifts in the price of oil and, thus, to the world capitalist economy.

When the OPEC oil cartel raised prices in the early 1970s, the shah had a large influx of revenue that could be used for industrial and military modernization. When world demand for oil contracted from 1975-1977, projects had to be cut and many workers lost their jobs. Since the shah personally made all major decisions, resentment with such happenings was focused on his person. Moreover, the reliance on oil was closely intertwined with the activities of foreign transnational corporations and issues of national security.

To compare, the arrival of the American multinational in Taipei in the early 1960s had the effect of fueling extraordinary economic growth. Not only did MNCs provide labor intensive employment for thousands of Taiwanese (especially for young women), they inaugurated a proliferation of SMEs since the state required the use of local inputs wherever possible.

The role of the transnational corporation in Iran, on the other hand, was quite different. Two major sectors — oil and defense — had the most substantial impact over time.

Although oil had been Iran’s link to the global economic system since its discovery in 1908, in the context of the Cold War conflict it became a strategic commodity.

American administrations were forced to come to grips with the strategic nature of oil because, as Simon Bromley notes:

. . . oil alone, at least in the postwar period, played such a large and central role in military mobility . . . . Because of this strategic quality, US control over the international oil order played a vital role in the constitution and maintenance of its postwar hegemony.

Oil represented both the military and the economic aspects of American grand strategy.

In Taipei, the penetration of the multinational corporation, while facilitated by cooperation between the US military and the KMT government, had been dictated by the economic needs of the capitalist enterprise — a search for cheap labor and high profits.

In Iran, the penetration of the multinational oil corporation was determined by both the strategic necessity of ensuring access to oil for military purposes and by the competitive nature of the capitalist system. Consequently, the pressures on American oil companies from the US government were at least equal to those emanating from the Iranian state.

In the case of oil . . . US policy in the Middle East — specifically, in Saudi Arabia during the 1940s, in Iran in 1953-1954, and with respect to OPEC until the winter of 1973-1974 — was primarily concerned with the stability and general pro-Western orientation of the conservative oil-producing regimes, a task rendered problematic by the United States’ simultaneous support for Israel. US policy in the period leading up to the events of 1973-4 maintained this stance despite the objections of the major oil companies to price increases and nationalizations.

Still, while American oil companies were sometimes pressured by the US government to make concessions to Iran, acting in the interest of US national security rather than according to their preferred corporate strategy, unlike the case of Taiwan, the Iranian state had not been able to dictate MNC entry on its own terms.

In order to successfully resolve the Mossadegh crisis of the early 1950s, Iran had opened its doors to American oil companies under less than optimal conditions.

Regardless, by the mid 1970s, Iran had gained control. The reasons for this were twofold.

While the stated goal of the United States government was the containment of communism, oil was also of growing importance to the general coherence of world capitalism and the unity of the world market. Importantly, in the case of Iran, oil also became linked to the international arms trade.

As oil revenues grew almost exponentially, profits were used to obtain the world’s most technologically advanced weaponry which Iran was now encouraged to purchase in order to implement the Nixon Doctrine.

Cold War Iran becomes a rentier state.

Iran’s oil income began rising in the 1950s when the resolution of the oil crisis made increased state revenues possible. (For background on the oil crisis see Cold War Iran in the Aftermath of the 1953 Coup.) The first large jump in sales (236%) occurred between 1954 and 1955 when the British embargo of the Mosaddegh period ended.

As a consequence of subsequent rapid growth, oil sales comprised over 41% of total government revenues by 1960, compared to only 11% in 1948. Expanded production and more favorable contracts resulted in spiraling profits over the course of the 1960s.

By the end of the decade, observers were describing Iran as a rentier state, a state which receives

on a regular basis substantial amounts of external rent. These rents, in the form of reverse flow from the sale of oil in the case of petroleum-producing countries, have very little to do with the production processes of their domestic economies. Rentier states, in short, feature economies with undeveloped agricultural, industrial, and manufacturing sectors, the inputs from any such sectors being not significantly related to earnings from the sale of oil.

Oil income continues to rise.

A second large escalation occurred in 1974 when oil prices quadrupled. By this time, also, the political consequences of Iran’s reliance on oil were evident. Since the growth of this income lessened the need for taxation, the relationship of the populace to the state was transformed and there was little semblance of a participatory political project. Because the shah controlled the distribution of the oil profits, he dictated the social, economic, and political direction of the country.

Unlike the case of Taipei where the owners of small and medium-sized enterprises (SME’s) began to contest the traditional elites and to financially support an organized opposition, Iran’s new industrial entrepreneurs didn’t insist on a political role, choosing instead to define themselves as apolitical technocrats. (You may remember that this group had gained their wealth over the course of the 1960s as a consequence of the adjustment to land reform. For ramifications see our post on 1960s isfahan.)

Concurrently, the older generation of politicians who had been active during Mosaddegh’s era weren’t intuitive about the new realities. Some believed that they still had a say in politics when, in actuality, economic and social policies were designed without regard for social consent, and “social classes were adapting themselves to state policies that were beyond their power to influence.”

The Iranian populace is apolitical.

By the mid 1970s, it was apparent to most that the role of the populace was to act as “grateful beneficiaries of state handouts” controlled by the shah. Loyalty to his person

replaced loyalty to the state as the test of citizenship . . . . The establishment of an oil state meant a progressive erosion of the traditional linkages between the state and civil society.

As Theda Skocpol argues in her article on Rentier State and Shi’a Islam in the Iranian Revolution:

The state’s main relationships to Iranian society were mediated through its expenditures — on the military, on development projects, on modern construction, on consumption subsidies, and the like. Suspended above its own people, the Iranian state bought them off, rearranged their lives, and repressed any dissidents among them.

The state expands its control of the Iranian population.

By the mid 1970s, Iranians were becoming polarized around questions regarding the distribution of oil wealth. The issue of distribution was particularly critical in the urban arena where almost every resident relied heavily on the state for privileges, employment, and services. This topic and associated issues concerning moral decadence and conspicuous consumption were replacing the postwar discourse which had centered on political participation and rational decision-making.

The breakdown in linkage between the state and civil society was evident as the state “extended its control to all employers’ associations, trade unions, bazaar guilds, civil service associations, and rural cooperatives.” Political parties were no longer relevant.

As the 1960s ended, Western influences were beginning to penetrate and erode the traditional fabric of the city of Isfahan.

By the 1960s, Isfahan’s builders were abandoning the courtyard plan, favoring Western style block structures instead. Proposals were in work to import a capital-intensive building technology to replace processes reliant on labor and labor-intensive building.

[For those following my posts on Taipei, this is in direct contrast to that city. Planners there decided to concentrate on labor-intensive — rather than capital intensive — industry so as to employ more of their own population.]

Western-style changes didn’t happen by chance.

Western-style changes in Isfahan were formalized under the Third Development Plan (1962-1968) which maintained that master plans were to be commissioned for all major cities in Iran. According to the provisions of the plan, Iranian consultants would associate with a European or American partner and “in the absence of any local equivalent . . .  adopt the standards and regulations of a  foreign city.”

Many of the worst errors committed can be traced back to this unfortunate decision which ignored the simple fact that, in their environmental conditions, social attitudes and physical form, Iranian cities are fundamentally different to their European or American counterparts. Isfahan’s master plan, prepared by Organic and Beaudouin, shows the city overlaid with a network of roads which cuts through the arteries of the old quarters. Only a part of this has been realised, but its worst effect can be seen in Abdorrazzaq Avenue, which incredibly, breaks through the main route of the world-famous bazaar . . . drawing commerce away from the bazaar and speeding up the decline of that poorly serviced quarter . . . South of the river, Hakim Nazami Avenue . . . links up with a new bridge and forms part of a western thoroughfare [which] . . . cuts through the old Armenian quarter of Julfa, dividing the spiritual centre of the Cathedral area . . .

At the end of the 1960s, the destruction of Isfahan’s historical quarters was proceeding rapidly. This impacted the social reality of the city, affecting not only residential clusters, but the religious as well.

In the past, the sacred and the secular occurred in tandem with “a mosque, a takieh (a place of reunion for digital purposes) and often a tomb . . . found next to a water reservoir, shops and caravanserais.”

Throughout the 1960s, changes in central planning resulted in the weakening of the religious organization of these historic areas.

Now, instead of a local approach, administration was at the national level, increasingly influenced by global (primarily Western) approaches to urban management and land planning. Opportunities for local input in the shaping of the urban environment were almost non-existent

Change was not just physical. The social fabric of the city was also transformed. Three important groups were particularly impacted by the changes which were occurring — merchants/bazaaris, landlords, and clergy.

The reforms of the Pahlavi state undertaken at American urging resulted in shifts in the traditional class structure of the society.

Historically, merchants had provided the state with financial backing in return for guarantees of internal security and the protection of their interests against foreign encroachment. Recently, however, while they had benefited from infrastructure and communications improvements, they had lost the independent political voice they has gained in the Constitutional Revolution. In addition, their business activities now came under partial state supervision, and the expansion of alternative trading outlets like the European style shopping centers popping up along Chahar Bagh Avenue meant that the bazaar was losing its monopoly over retail trade.

The position of landlords was also eroded.

As a consequence of the land reform of the early 1960s (see our post:  Iran 1960: Kennedy Pushes Land Reform), many of these individuals became industrialists, commercial agriculturalists, or urban real estate investors. Although they frequently amassed great wealth, they ceased to exist as a social group, losing their political voice in the process. Their change in status over time can be observed by looking at the occupation of Majles representatives in various legislative sessions.

In 1941, landlords held 58% of the seats. The percentage of landlords in the 21st Majles, elected in 1963, was only 35%.

Despite the losses of landlords and merchants, the group most affected by the shah’s reform effort was the clergy.

Members of the religious realm perceived some state actions to be assaults on Islam.

For example, the enfranchisement of women was denounced as a tactic to destroy family life and spread prostitution.

The group also felt threatened by a new election bill passed by the Cabinet on October 7, 1962, that was said to be contrary to the shari’a. The bill not only gave the vote to women, but replaced the Qur’an in the swearing-in ceremony by a phrase “my holy book” which recognized the holy books of other religions as well. Most clerics thought the law was opposed to Islam. Opposition was so strong that the government was forced to back down. However, the government didn’t do away with either the franchise for women or with land reform. Although the clergy were often divided, most were opposed to both of the above government actions.

In Isfahan the situation was compounded because the clergy were also large landholders.

The clergy in Isfahan were losers under land reform since a great deal of property belonging to mosques and religious institutions was confiscated. Other government policies, also, undermined their status and power over the years.

In the early 1960s, clerical students and teachers at religious educational institutions received monthly stipends from a clerical fund amounting to between 300 and 400 rials a month. Following bureaucratic reforms in 1964, the stipends were abolished and replaced by financial assistance from a newly created Endowment Organization. The funds available from the new source were far less than before. In 1973, the stipend was only 228 rials per month, making it impossible for many clerical students to survive.

The Endowments Organization also supervised the disposition of religious establishments, and land acquired by religious institutions through donations of individuals was placed under their control. They also illegally appropriated and sold religious properties. These policies — and growing secularization — contributed to a decline in the number of mosques, theological schools, and theology students.

Political Life in Isfahan

Isfahan’s  changing urban environment also held implications for the city’s political life.

The shah clamped down on all forms of participation, and civil society was curtailed under the watchful eye of the government’s internal security agency, SAVAK.

Perhaps the greatest change had to do with economics, however — specifically, the impact of Iran’s burgeoning oil income on urban life. We’ll talk about this on our next post on Iran.

Make sure to subscribe to Cold War Studies so you don’t miss future articles on Iran.

Check out a previous post on Isfahan  here.

Photograph by Lisa Reynolds Wolfe.

The Middle East war of June 1967 initiated a worldwide oil scare, driven especially by changing realities in the international petroleum market.  

The US was becoming increasingly dependent on oil imports, particularly from the Middle East, and oil exporting states were growing more and more empowered.  The situation bolstered the shah’s belief that he should be rewarded for providing a continuing and reliable source of supply to the West.

In 1966 the shah had successfully pressured the oil consortium (British Petroleum and eight European and American oil companies) to increase production rates in Iran.  Determined to come up with needed revenues for his Fourth Development Plan, he demanded another increase in 1968. Although American oil companies balked, the State Department — citing national security — pressured the oil companies to accept Iran’s terms, thus resolving the issue in Iran’s favor. As a result, following on the heels of Taiwan’s achievement of self-sufficiency:

. . . increases in Iran’s exports, in its Gross National Product, and in its industrial production led to the conclusion that Iran had reached the developmental “take-off” point. American aid was virtually terminated at the end of 1967, after having supplied Iran with nearly $1 billion during the preceding fourteen years. While the United States aid program in Iran had once been regarded as one of the “more inefficient and corrupted of American overseas aid efforts,” concluded The New York Times, Washington now pointed to Iran as “one of their more notable success stories.

Taken together, oil, the termination of aid, and the shah’s new relationship with the Soviet Union encouraged greater American arms sales to Iran.

Although the Iranian army had already received M-1 rifles, 106 mm artillery, M-47 tanks, 3.5 mm  antitank rocket launchers, F-86 fighters, and C-47 transport plans, the shah wanted additional equipment. He insisted on a comprehensive radar system to guard against Soviet attack, a ground-to-air missile network to protect his Gulf coast, supersonic aircraft, and long-range surface-to-surface missiles.

American reliance on Iranian oil meant that the US was not in a position to refuse.

Both Senator William Fulbright, Chairman of the Senate Foreign Relations Committee, and the Defense Department’s International Security Agency (ISA) opposed the sales, but the provision of F-4D fighter planes was justified on the basis that the Soviets had supplied advanced fighters and bombers to both Iran and Egypt.

Fulbright argued that “. . . we are doing a great disservice to Iran by selling them these arms . .  . given Iran’s poverty, it should have other priorities.

In 1968, after a comprehensive defense review, the British announced their intention of withdrawing “east of Suez” by 1970.

The British departure meant the end of the security system that had operated in the Middle East for over a century, and strategic requirements moved Washington’s objectives even closer to those of the shah.

The US could not afford a power vacuum in a region that supplied 32% of the world’s petroleum and that, at the same time, held 58 % of the world’s proven energy reserves. Consequently, President Nixon and Secretary of State Kissinger decided to employ a Nixon Doctrine, allowing the US to supply arms to selected client states instead of sending troops.

As David Packard, the Deputy Secretary of Defense, stated:

The best hope of reducing our overseas involvements and expenditures lies in getting allied and friendly nations to do even more in their own defense. To realise that hope, however, requires that we must continue, if requested, to give or sell them the tools they need for this bigger load we are urging them to assume.

The Nixon Doctrine relied on strong local allies to act as regional policemen. This policy, of course, meant that the shah could achieve his long held objective of acquiring substantial quantities of advanced weaponry.

Quickly Iran became “the key guardian of Western interests in the Gulf.

Iran bordered the Soviet Union and it was by far the largest and most advanced state in economic and military terms.” As the shah asserted:

The safety of the Gulf had to be guaranteed, and who but Iran could fulfill this function?

Enjoy this post? Check out our previous post on Iran here. And make sure to subscribe to Cold War Studies so you don’t miss future articles on Iran.

In January 1966, Iran and the Soviet Union signed an agreement which provided that the USSR would advance credits of $286 million at 2.5 percent interest over a twelve year period for the construction of a steel mill, a gas pipeline to the Soviet Union, and a machine tool plant.

Regarding the steel mill, it was agreed that the Soviet Union would be responsible for the following: planning and exploratory work; the delivery onsite of any equipment, machinery, and materials unobtainable in Iran; sending Soviet experts to Iran to collect initial data; furnishing supervision and advice in the construction of the projects; giving technical-industrial training to Iranian citizens; assisting in the assembly, installation, and initial operation of the equipment; and receiving Iranian citizens for technical-industrial training in the Soviet Union.

The Isfahan Steel Mill: A Russian Turnkey Installation

The agreement envisioned a turnkey installation with

a complete metallurgical cycle and an annual capacity of 500,000 to 600,000 tons of steel, which might be increased to 1 to 1.2 million tons.

The gas pipeline was to go into operation in 1970, the steel mill in 1971.

The pipeline was designed to be more than 1,000 kilometers long and to carry up to ten billion cubic meters of gas annually to the Soviet Union.

The Soviets were to deliver increasing amounts of equipment for heavy and light industry, road building, and other infrastructure projects. In return, Iran was to deliver to the Soviets gas, cotton, wool, and nonferrous material.

Thus, the accord included mutually beneficial technical and economic exchanges.

The Isfahan Steel Mill Site:  Aryamehr

A site for the steel mill was quickly agreed upon (near the Zayendeh River on the outskirts of Isfahan) and the facility was named Aryamehr. It was built using the latest technology, with Soviet engineers and technicians supervising both construction and the installation of machinery and equipment obtained from the USSR.

The complex employed 1,300 Russian engineers and technicians, 900 Iranian engineers and technicians, and 33,000 other Iranians, including 8,000 specialists.

Business was conducted in both Russian and Persian, so three years of language classes were provided for the technicians and other specialists.

Since essential ingredients for its industrial processes came directly to the site, new rail lines were constructed.

A cement block factory in the vicinity of the plant provided some of the required materials for the construction of housing for staff and workers.

The plant increased mining activity in the Isfahan region and, in addition to steel, produced secondary products which were beneficial to the city’s chemical industries.

The agreement also called for the construction of a mechanical engineering facility in the Isfahan area which was projected to have an annual output of 25,000 to 30,000 tons of metal products.

Overall, the total cost of the mill was estimated at $1.4 billion, an amount which includes the housing project and associated housing operations.

The Isfahan Steel Mill: Production and Associated Housing

Shortly after the first blast furnace came into operation in January 1972, production was rated at 750,000 tons per year. A later agreement with the Soviets (August 10, 1972) provided a basis for increasing capacity to 2 million tons and later to 4 million tons annually.

As mentioned above, a planned community, Aryashahr, was constructed to house workers and their families. The first stage called for the building of 200 multiple family units which were to provide housing for 50,000 inhabitants. A later phase would increase the number of residents to 300,000 and the number of dwellings to 800.

In addition to housing, Aryashahr, a modern community built in the Soviet manner, allowed for 4,200 hectares of greenspace, two schools, a dispensary, and a large 400 room hotel.

In sum, the Russians provided a turnkey operation with workers housed in a self-contained complex, a distance from the center of Isfahan. Buses were used to transport advisers and specialists for downtown shopping and other excursions.

In all instances, workers were supervised and there was little opportunity f9r the improper and highly visible activities that the Americans later became known for.

The American presence became highly noticeable and intrusive, in large part, because Americans lived and shopped in Isfahan proper. Although some had undergone cultural sensitivity classes in the US before leaving for Iran, most tried to live their lives as they would have at home.

The American openness and brashness ensured a higher profile than that of the Soviets, and  made them much more accessible to criticism.

Interestingly, many Isfahanis were not even aware of the Russian presence — or even of the mill’s existence. R.K. Ramazani says that

Ruffled political relations between Iran and the Soviet Union pushed the news of the Aryamehr Steel Mill off the front pages of Iranian newspapers.

The protest movement in Iran in the 1960s was neither sustained nor widespread. Still, it did serve as a precursor of future Iran Cold War events.

The National Front and the Tudeh Party had been basically destroyed in the 1950s, and the secular nationalists were overpowered by the religious leadership.

The demonstrations clearly illuminated the problems of the opposition. As John Foran says in his 1993 book Fragile Resistance:

The National Front and ulama did not work together, divided on issues of land reform and votes for women. Nor did they have a well-articulated political culture of opposition to draw on at this point, with demands stopping well short of the overthrow of the regime or structural economic changes. The protest movement was neither sustained nor widespread as a result; reforms divided and confused the opposition, repression crushed the leadership and discouraged its social base.

The shah emerged from the fray with his regime intact. Subsequently, he initiated a ruthless attack on religious institutions.

The monarch began referring to the opposition as a “black reaction.” He noted that civil servants and industrial workers, especially oil workers,  had failed to organize general strikes, and the army had kept its discipline.

Importantly. those abroad perceived a strengthening and consolidation of his rule. Having carried out the US mandate for internal reform, he was now ready to continue to press for actions consistent with his interpretation of  his country’s security needs.

The shah was willing to deal with either superpower to achieve his objectives. In fact, he dealt with both over the course of the decade.

So far as America was concerned, a 1964 US-Iran military sales agreement provided for up to $50 million a year of weaponry (increased to $100 million after two years). But there were strings attached.

The US remained concerned that military purchases were interfering with economic and social progress, so sales were contingent on an annual review of Iran’s economic development and social programs. The shah saw this policy as an unwarranted interference in his country’s internal affairs.

There were other differences also.

In the context of the Cold War, America’s focus was on Soviet activities. The shah was more concerned about regional threats from Iraq or Egypt. He distrusted the Arabs and was concerned about the legacy of the Iraqi coup of 1958.

When US and Iranian interests diverged, the shah decided he would have to act on his own by diversifying sources of foreign aid.

In an unprecedented move, in 1967-1968, the shah obtained some military equipment from the Soviet Union. He also went forward with a prior agreement for the USSR to construct a steel mill in Isfahan. But more about that later.

The White Revolution

In January 1963, the Shah of Iran held a national referendum to obtain approval for his total program which was known as the White Revolution  or the Revolution of the Shah and the People. His policy agenda was designed to achieve the following six goals:

1. land reform (see Iran 1060: Kennedy Pushes Land Reform)
2. sale of some state-owned factories to finance the land reform
3. the enfranchisement of women
4. nationalization of forests and pastures
5. formation of a literacy corps
6. institution for profit-sharing for workers in industry.

The most important of the 6 points was, of course, the land reform discussed above. According to Said Arjomand, during its first phase:

the landowning Thousand Families, including the tribal chiefs, lost their socio-legal base and were thus liquidated as a class. Though many of its members retained large holdings of land and became mechanized commercial farmers, joining the petrobourgeoisie in the prosperity of the 1970s, and many even remained in the Pahlavi political elite, there can be no doubt that the traditional peasant-landlord relationship which was the power basis of the landowning class and accounted for its prominence in the Majles, was destroyed. Furthermore, by failing to give any or enough land to the majority of the peasants, the land reform accelerated the massive migration from the rural areas into the cities.

Referendum in Iran: January 1963

While the referendum indicated overwhelming support for the reform movement, so much friction soon developed that, in the end, land reform in Iran was less comprehensive than a similar program in Taiwan, chiefly because it antagonized prime political constituencies.

Because the KMT government had no ties to local Taiwanese landowners they did not have to be concerned with the political impact of their land reform Since the shah’s plan emphasized economic development, it focused the public’s attention on the economic problems of the early 1960s.

Ayatollah Khomeini: A Formidable Opponent

One of the shah’s most outspoken opponents was a member of the clergy, Ayatollah Khomeini, who publicly accused the Shah of “violating his oath to defend Islam and the Constitution.” According to Arjomand (again), “the authoritarian rule of the Shah was denounced as a violation of the Constitution, and he was attacked for the maintenance of relations with Israel.”

Assuming a leadership role for the first time, Khomeini was adept at centering attention on concerns that resonated with the general public.

He denounced the regime for living off corruption, rigging elections, violating the constitutional laws, stifling the press and the political parties, destroying the independence of the university, neglecting the economic needs of merchants, workers, and peasants, undermining the country’s Islamic beliefs, encouraging gharbzadegi–indiscriminate borrowing from the west–granting “capitulations” to foreigners, selling oil to Israel, and constantly expanding the size of the central bureaucracies.

Public Protests

Protests against the shah’s reform effort began at the time of the Iranian new year in March (Now Rouz). The confrontation came to a head later that spring and summer.

Demonstrations were centered in the urban areas of the country, especially Tehran, Qom, Shiraz, Tabriz, Mashhad, Kashan, and Isfahan. Rallies occurred in the bazaar areas where “small traders, shopkeepers and artisans, students, workers, the unemployed, and political activists “participated.

The Iranian Army Responds and Khomeini is Forced into Exile

During the gatherings, the army fired on the crowds; casualties were estimated at several thousand by observers, but less than 90 by the government. Whatever the actual number, martial law, mass arrests, and a number of executions were required to quash the movement. Khomeini was first imprisoned, then kept under house arrest from October 1963 to May 1964; in November 1964, he was exiled to Turkey.

Photograph by Lisa Reynolds Wolfe

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