Oil Politics and Coup d’état against Mossadegh

Credit: Maysam Behravesh, PhD Lund University
From “The Formative Years of Anglo-Iranian Relations (1907–1953): Colonial Scramble for Iran and Its
Political Legacydome”

Upon his succession to the throne of Iran in September 1941,Mohammad Reza Shah found himself under enormous foreign, not least British and American, control that inclined him to design Iran’s foreign and domestic policies in accordance with the Western interests. The first sign of the Shah’s pro-Western policy was his open support for the involvement of American political advisors and companies in Iranian politics and economy, which was encouraged and approved by the British government, as Sir Reader Bullard, the then British ambassador to Tehran, reveals in a private letter to his wife.[1] The turbulent political ambience of the country generated by growing popular discontent with Mohammad Reza’s misguided policies, along with his Westernization plans, led to the election in April 1951 of Mohammad Mosaddeq as Prime Minister, a prominent member of the nationalist Iranian organization, National Front. An ardent advocate of an independent Iran, he set out from his early days in power to pave the way for the nationalization of the petroleum industry in the country. By then, calls for nationalizing oil or at least altering the terms of oil concessions were being clearly heard from Venezuela and Saudi Arabia, which sought a 50/50 share in the total oil revenues.[2] The 50/50 compromises took effect and succeeded in restoring a considerable degree of calm in most of the Middle East oil-producing countries. This was not, however, the case in Iran, at least not until Mosaddeq was heading the government and pushing firmly for the full nationalization of oil production and exploration.His disagreement with foreign control of Iran’s oil industry effectively started years earlier in 1943 when Iran was under Allied occupation and major oil companies—American “Standard Vacuum” and “Sinclair” as well as British-Dutch “Royal Dutch Shell”— were approaching the Iranian government for oil concessions in the South East provinces, mostly due to the Shah’s endearing policies toward the American and British governments.A year later,having become aware of the rival negotiations over new concessions,the Soviets put forward similar demands to carry out exploitation in the Northern provinces. Mosaddeq, then a lawmaker elected from Tehran, passed a bill through the parliament, banning all government negotiations with any foreign persons or entities, official or non-official, as well as related agreements unless they were ratified by people’s representatives in the Majlis.
Around the same time, Great Britain, which was precipitously losing its grip on the empire in the wake of Indian independence in 1947, was building up its efforts to maintain its far more lucrative oil empire with U.S. help (Engdahl, 2004; Mahdavi, 1995). Its conviction in the face of mounting pressure from Iranian nationalists in the Majlis for reducing foreign monopoly over oil was that employing a soft approach and thus appeasing Iranians via giving more concessions would only embolden them in their struggle for independence while demonstrating singleminded determination and fiercely resisting their demands would ultimately compel them to submit (Azimi, 1988). In fact, the British discounted the sweeping wave of political protest over their control of Iranian oil possessions and furthermore were, as Ansari (2007) argues, “contemptuous of Iranian nationalism” in spite of a sacred aura that had come to surround the struggle and to intensify the religiousnationalist sentiments about it as a result of the involvement of Iran’s ulema, not least Ayatollah Kashani, in it (p. 29). Notably, he cites a Western historian as noting that, “Mosaddeq…wasregularly described by the British Ambassador of the time in his dispatches to London as a ‘lunatic’ and characterized as being ‘cunning and slippery,’ with ‘short and bandy legs’ and ‘a slight reek of opium’ ” (cited in Ansari, 2007, pp. 29–30). Mosaddeq’s preoccupation with the nationalization of Iran’s oil sector, however, derived arguably from his belief that such a venture, once realized, could bring economic prosperity, national autonomy, and political sovereignty for the country in its wake.
The die was cast:The Supplemental Agreement of 1949—according to which oil payments to the Iranian treasury were to be raised—to appease the nationalists was rejected by the parliament. It also refused to ratify a 50/50 profit-sharing agreement in 1951 when, by virtue of Mosaddeq’s resolute endeavors and in the absence of Razmara, the pro-British prime minister who was assassinated by an Islamist group in March 1951, the Anglo-Iranian Oil Company (AIOC) nationalization bill was overwhelmingly passed by the Majlis into law.Ayatollah Kashani,then an influential Iranian cleric, even went so far as to suggest marking “a day of hatred against the British Government”as a national holiday (Yergin,1991,p.463; also cited in Farber, 2005, p. 53).
The loss of the Abadan Oil Refinery dealt Britain’s imperial prestige a stinging blow at a time when it was struggling to adapt itself to the disintegration of the Empire, and come to terms with the unpalatable ascendance of the United States in its stead in the Middle East and Persian Gulf. Another concern of the British government over the Iranian oil nationalization was its potential domino effect spreading throughout the region, which could encourage other oil-producing countries to follow suit.However,the Americans who favored tackling the rapid spread of communism over throwing their weight behind the British interests in Iran initially showed sympathy to the liberal nationalist government of Mosaddeq.[3] The divergence of British and American policies toward the Iranian government had worried London. Anthony Eden, then British Foreign Secretary, raised the point in August 1952 that “Mr. Acheson [the U.S. Secretary of State] and the State Department, in their anxiety to ward off communism in Persia, have long desired to assist Mussadiq [sic] at the expense of the rights and interests of the AIOC and Her Majesty’s Government” (cited in Fain, 2008, p. 39).
Yet the British were hatching a third scheme that was believed to serve the strategic interests of both sides better. Eden (1960) notes in his memoirs that: I did not accept the argument that the only alternative to Mussadiq [sic] was communist rule.I thought that if Mussadiq [sic] fell,his place might well be taken by a more reasonable Government with which it should be possible to conclude a satisfactory agreement. I knew that the country was possessed of an elasticity and resilience which appearances did not suggest. Iranians have always been good at coming again. (p. 201; also cited in Saidabadi, 1998, p. 47) Britain, however, was careful not to antagonize the United States as far as Iran was concerned, which could enable it to retain its influence in Washington. Early 1953 witnessed the gradual convergence of American and British policies in Iran.As Fain (2008) argues,U.S.politicians had gained the erroneous impression that Mosaddeq was gradually inclining toward Soviet Russia by broadening his political base through affiliations with the communist Soviet-oriented Tudeh party.[4] The election of Dwight D. Eisenhower as the U.S. president, who held forthright views against communism, also contributed to the adoption of “less conciliatory and more confrontational” (Fain, 2008, p. 39) policies toward Iranian nationalists. A third reason for the convergence was the Anglo-American conclusion that a pro-Western government in Iran was indispensible to the development of a “northern tier” defense establishment in the region comprised of Pakistan,Iran,Iraq,andTurkey (Fain,2008, p. 39; Freedman, 2008).
A more cogent and compelling explanation for the consensual foreign opposition to the Mosaddeq administration appears to have been his maverick foreign policy of “negative equilibrium”—categorized within what Adibzadeh (2008) rather aptly calls the “strategy of two-faceted confrontation” as the emergent discourse of the time (p. 146)[5] that had its roots in his aspiration to cut foreign hands off Iran’s national wealth and bring independence, freedom, and democracy to it. According to Mosaddeq: Our nation aspires to political equilibrium, namely, an equilibrium that is to the benefit of this country, and that is negative equilibrium….The Iranian nation will never agree to positive equilibrium….Thenation knows that through this policy,it will not take long to lose all it has….TheIranian nation views the governments that betrayed the country negatively….Inmyopinion, negative equilibrium is achieved when elections are held freely…a dwhenever political balance is established; then concerns about not only one country but all surrounding states will be eliminated. If only the surrounding states…would treat us justly. (cited in Mahdavi, 1995, p. 162)
In another speech denouncing oil concession to the Soviets, he opposed the political equilibrium this could bring, stating significantly that: [G]ranting [this] concession is as if a person whose one hand has been mutilated consents for the sake of maintaining equilibrium to have his other hand cut off too, whereas such a handicapped person should seek an artificial hand at least to keep up appearances,and any handicapped person who wants to lose his other hand too, had better rid himself of life’s burden and commit suicide before his second hand is cut off. (cited in Mahdavi, 1995, p. 163)
With this in Mosaddeq’s mind, there was allowed little room, if any, for any foreign power to play a leading role in the country’s domestic affairs or steer its economic policies in its own strategic interests.The argument may safely account for why Mosaddeq has been hailed as the pioneer of “non-alignment policy”in the third world (Mahdavi, 1995, p. 165).
The Operation Ajax/Boot against his government,orchestrated by the U.K.and U.S. intelligence services on August 19, 1953, made it clear for many Iranian intellectuals that their historical victimization did not have solely internal origins as was primarily the case with Iran under the Qajar rule. It was not simply due to the political incompetence or imprudence of its rulers or the moral volatility of its masses, but that foreigners did have a central part in causing it, either by deception or by coercion. However, it should be admitted, as Gheissari and Nasr (2006) point out, that the Iranian public perception of national interests as increasingly diverging from that of Mosaddeq, most Iranians’ mounting concerns about his hard-headed rejectionism as well as their sympathies for the monarchy contributed to his fall,“though popular perceptions in later years would deny this” (p. 54). In any case, Mosaddeq struggled to remove from Iran’s political and economic theatre the very forces who removed him,by putting his faith in the national independence movement of Iranians that had started decades earlier with the Constitutional Revolution of 1906. During his trial after the coup, he avowed that, “[a]s Prime Minister, I relied upon the movement the nation of Iran had set up and the sentiments it expressed, and overcame the English government everywhere.I dismissed England from Iran”(cited in Bozorgmehr, 1983, p. 28; also in Mahdavi, 1995, p. 159).
Either one acknowledges the socio-historical fickleness and inconsistency of the Iranian populace—what Eden seems to euphemistically call “elasticity”—as a sociological catalyst for the overthrow of Mosaddeq or not, the British-sponsored coup d’état against him was indeed the coup de grâce to its identity-image in Iran; a coup that served to revive the declining monarchical autocracy and to demoralize the emergent force for democracy in the country; a coup without which,as Azimi (2008) pithily puts it, “Iran might well have escaped the cataclysmic later revolution [of 1979]”(p.13).Indeed,it helped reinforce those deep-rooted feelings of Anglophobia in the Iranian collective psyche that had developed since the Qajar era.
Even before the 1979 revolution, pro-Western Mohammad Reza Shah also suspected the British (and others) for various reasons that often went beyond his own unique and characteristic blend of paranoia. Much like his father, he had been restored to power by a coup d’état and,as his father was forced to abdicate the throne by foreign powers, he saw his position susceptible to a similar fate. Such a deep suspicion appears to have been fueled, more specifically, by the British Broadcasting Corporation (BBC) radio’s Persian-language service that extensively covered revolutionary discontent in Iran along with Ayatollah Khomeini’s statements from France where he lived in exile at the time.This continued to take place in spite of the British government’s formal support for his regime—which it saw as a strategic ally in the Middle East and a defensive shield against the spread of Communism—as well as Tehran’s “endless” objections to the Foreign Office, then run by Lord Owen, through Iranian Ambassador to the UK Parviz Radji,only to be met by the assertion that BBC is “independent”and “we [do] not control their policy”(Radji,interviewed in Cloke & Cameron, 2009).
Thanks in part to the complicated history of Anglo-Iranian relations, there has been developed a moribund political culture of suspicion in Iran marked by the abundance of conspiracy theories and threat perceptions about foreigners in general and the British in particular (Behravesh, 2011). While a great majority of the IRI officials view the United Kingdom and its policies,however favorable or friendly they might turn out at times,from a threat-based perspective,there are a good number of Iranians among the general public who believe that even the Islamic Revolution of 1979 was primarily masterminded by Britain and America. Others take a further cynical stride and, in spite of the strained relations and almost constant tension between the Islamic Republic and Great Britain since, maintain that the ayatollahs themselves are originally a British product,and that bilateral cooperation on how best to take advantage of Iran’s national wealth goes on behind the scenes.
With this in mind,drawing a crude comparison between the Iranian and Indian experiences of British presence in the respective countries might enable one to set out twoprimaryreasonsfortheprofusionofconspiracytheoriesamongtheIranianpublic. First, in contrast to the United Kingdom’s evident and apparent colonization of the Indian Subcontinent and its colonialist practices there—which lasted for over two centuries—theBritishpresenceinIranprimarilytooktheformofhiddenintervention and surreptitious exercise of influence—a practice that can work to raise unresolved questions in the public opinion and is more likely to leave a lasting imprint upon the collective memory of a nation than obvious control would be.Second,whereas India is an established parliamentary democracy,where power is exerted through transparent democratic mechanisms and processes, the Iranian system of governance is too complex and personalized at the highest levels of national decision making to deliver such a transparency,which in turn gives rise to speculation as to who really orders the thingsandpullsthestrings,predisposingthepublictojumptothemostoversimplified and at-hand conclusions on the basis of their historical memory and life experience.[6] All told, Iranian–British relations, as they stand currently, are arguably a victim,
inter alia, of their history. Given Iran’s post-revolutionary politics, however, what matters more now—over three decades after the 1979 Revolution—is that the conspiracy-minded and thus demonization-prone[7] political culture such a history has helped produce in Iran lends itself most conveniently to abuse and instrumentalization by its leaders for political gains. How Iranians should free their relations with the Western world from the discontents of its history, and more significantly, how they should emancipate themselves from the ill and insidious politico-cultural legacy it has bequeathed are fundamental questions the progressive political scientist and historian of contemporary politics should endeavor to answer.


Notes & References:
1. For excerpts from and further details on the letter, see Saidabadi (1998, p. 38) and Mahdavi
(1995, p. 88).

2. For a concise account of how the 50/50 agreements were reached between companies and home
and host governments, see Parra (2004, pp. 14–21).

3. For details on the Harry Truman administration’s position and Averell Harriman’s mission to
Iran to negotiate with Mosaddeq, see Farber (2005, p. 53).

4. To get a good grasp of Mosaddeq’s relationship with the Tudeh party, see Behrooz (2000,
pp. 3–16).

5. According to Adibzadeh,this strategy consisted of two tactics,with the first being opposition to the (dominant) status-quo power—its internal or domestic facet—and the second opposition to foreigners—its external or foreign-policy facet. For further details, see Adibzadeh (2008, ch. 6, p. 146).

6. I should acknowledge the intellectual contribution of Dr.Zhand Shakibi,Lecturer in Comparative Politics at the London School of Economics and Political Science (LSE), to this argument during a personal conversation.

7. For a rigorous examination of the politics of demonization in Iran, see IRANalyst (2010).

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