Carter, the Shah and Blame

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This piece on the overthrow of Mohammed Reza Shah Pahlavi in today's LA Times smells a little fishy:

Analysts and historians often contend that President Carter, a Democrat, fumbled Iran, allowing the country to eventually become one of the chief U.S. opponents in the region. But the report suggests that his Republican predecessors not only contributed to the shah's fall but also were inching toward a realignment with Saudi Arabia as the key U.S. ally in the Persian Gulf.


The Saudis stunned OPEC by announcing at a December summit in Doha, Qatar, that they would boost production to 11.6 million barrels a day from 8.6 million barrels, driving down prices.

"We should get credit for what happened at OPEC," Kissinger told Ford. "I have said all along the Saudis were the key. . . . Our great diplomacy is what did it."

But it would prove to be a Pyrrhic victory in terms of one American ally. Iran was cash-strapped, having spent much of its reserves on American weapons and the shah's Great Civilization programs, which spurred inflation by flooding the country with money.

The shah was broke. Declining oil revenue amid continued inflation forced him to abandon ambitious plans to modernize his country.

"The collapse of the Doha summit, and the Saudi decision to undercut the price of crude and boost its output to try to flood the market, rushed the Iranian economy to the precipice," Cooper writes in his report.

The shah's government, shaken by the loss of oil revenue, imposed a harsh austerity budget that threw thousands out of work, collapsed investor confidence and panicked middle-class Iranians. Economic chaos and unemployment quickly spread.

Within a year of the Doha summit, the first mass demonstrations that grew into revolution broke out on the streets of the Iranian capital.

There's a lot of truth to this analysis, but I think the premise leaves a few gaping holes in need of plugging. While an unexpected plateau in oil prices did in fact hurt construction projects, it was more the perception of American heavy-handedness in the country (coupled with an obvious history of American meddling that needn't be broached here) that led to prolonged upheaval and revolt in Iran. By 1977, the Shah had "diversified" his global relationships. Prosperity in the first half of the decade emboldened Pahlavi, who used China and the Soviet Union as leverage against the United States as a warning to stay out of Iran's domestic affairs.

This created what amounted to an influence partition in the region. Sure, OPEC's decision to increase oil output hurt the Iranian economy, but the Iranian economy remained a heavily stratified one anyway. Poor domestic planning--especially in the area of agriculture--forced a booming population to head towards the cities for industrial work. Couple this with the Shah's own domestic terror campaign against all forms of public dissent, and what you ended up with was a network of mosques and Islamic religious circles serving as a de facto breeding ground for revolution. By 1979, nearly 10% (!) of the Iranian people were taking part in demonstrations against the regime. This is almost unheard of in the history of popular revolution. Job loss alone didn't foster such conditions.

This brings us to Carter. Unfortunately for our former president, much of the disdain for him in Iran was misplaced and cosmetic. The truth of the matter is, by 1978, the United States had less influence over Iran than it had during previous Democratic and Republican administrations. But what Iranians were seeing--most notably a growing American population in Tehran, and an all-too-cozy relationship between Carter and Pahlavi--made it seem as if it was 1953 all over again. The truth was a little more complex, and Carter's primary misstep was failing to gather better intelligence on the plight of Iranians at the grassroots.

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