Revolution #89, May 20, 2007

Background to Confrontation:

The U.S. & Iran: A History of Imperialist Domination, Intrigue and Intervention

Part 1: Iran and Imperialism's “Great Game” of Empire

For over 100 years imperialist domination of Iran has been enforced by the U.S. and other powers through covert intrigues, economic bullying, and outright military assaults, even invasions. This history is crucial to understanding the real motives for U.S. threats today—including the real threat of war, even nuclear war. 

This is the focus of this series. Part 1 begins in the mid-19th century, with Iran a prime target of rival powers in imperialism’s “great game” for global dominance and control.


In 1889 Lord Curzon, the British Viceroy of India, wrote that Iran and its neighbors were “the pieces on a chessboard upon which is being played out a game for the domination of the world,” and where “the future of Great Britain…will be decided not in Europe” (Amin Saikal, The Rise and Fall of the Shah, p. 13).

For over 150 years, with the global spread of capitalism and the rise of imperialism, Iran and the Middle East have been the target of a handful of Western powers who have wanted to gain control of the region and its resources, while preventing their rivals from doing likewise. 

The forms and battle lines in this struggle for dominance have evolved and changed, but capitalism remains a system driven by the interconnected compulsions of economic competition between rival firms and strategic competition between rival nations; securing ready access to markets, investment opportunities, and natural resources is essential.  And this demands control of vast stretches of the globe, particularly in the Third World, or oppressed, countries, where the overwhelming bulk of humanity lives.

In the Middle East, this has meant enslaving whole countries, robbing them of self-determination and wealth, imposing brutal tyrannies, impoverishing whole populations, killing thousands upon thousands, and crippling growth and development in all spheres.  In response, there have been waves of resistance, guided by various ideologies and programs, which have in turn sparked further imperial intrigues and aggressions.  Deep national, social, and class divisions run through the Middle East, but foreign domination has been—and remains—the main obstacle to a more just social order.

Imperial Battle for Control

At the turn of the 19th century, Iran was a backward, feudal society.  Most people lived in the countryside and toiled on the land, and the country included different tribes, loosely held together by a common religion and a weak central monarchy. The monarch’s word was law from which there was no redress.

From the late 1700s on, Iran had suffered a series of military defeats and had to give up territory to European powers, particularly Britain and czarist Russia. Beginning in the second half of the 19th century, Iran became a focal point of a prolonged struggle between Russia and Great Britain over who would acquire territory and gain political and economic control. For the British, Iran was a crucial communications link to the Indian subcontinent—the “crown jewel” of its empire—and a buffer against Russian expansionism.  Russia in turn viewed Iran as key to protecting its southern flank and preventing British encroachment.

Both powers sought to exploit Iran’s ethnic, religious and tribal differences and keep the central government weak and dependent.  Iran was robbed through economic and political concessions which sold the right to exploit Iran’s wealth and resources for a pittance. 

The Rise of Oil

Petroleum’s skyrocketing importance to global capitalism in the early 1900s made imperialist dominance of Iran and the Middle East more strategically significant than ever.

It was long known that oil could be found in the southwest part of Persia (which became Iran in 1935), and in 1901 William D’Arcy, an Englishman, purchased an exclusive 60-year concession covering 500,000 square miles, over five-sixths of the country today. The concession gave him the exclusive right to develop and exploit Iran’s oil. The very cheap price was: 20,000 British pounds in cash, 20,000 pounds in stock and 16% of profits to the Iranian government.  In close collaboration with the British state, D’Arcy established the Anglo-Persian Oil Company (which later became Anglo-Iranian Oil Company and finally British Petroleum) to exploit the concession. BP became one of the world’s largest oil companies; it was founded solely on Middle Eastern oil. (Larry Everest, Oil, Power & Empire: Iraq and the U.S. Global Agenda, p. 30)

In 1907 Britain and czarist Russia signed a secret treaty—the “Convention of St. Petersburg”—to partition Iran between them, with Russia taking the northern half, and Britain the southern, which—not coincidentally—included all major oil producing sites.  Iran’s government was not even consulted. 

Anglo-Persian began pumping oil in 1908, making Iran the first country in the Middle East where oil was commercially exploited on an industrial scale, but it was World War 1 that established oil’s centrality to empire in the modern age. At the time, navies were the prime instruments of global reach and power; oil-fueled ships were faster and ranged farther than the older coal-fired models. In 1912 Britain’s First Lord of the Admiralty Winston Churchill converted the British fleet to oil, making oil vital to British naval supremacy and global hegemony. After the defeat of Germany in World War 1, Britain’s Lord Curzon declared that the Allies had “floated to victory upon a wave of oil.”  (Everest, p. 31)

But the importance of petroleum for imperialist powers went far beyond its military significance. It became an essential economic input whose price impacted production costs, profits, and competitive advantage. It became an instrument of rivalry: controlling oil meant exercising leverage over those who depend on it and over the world economy as a whole. And Middle East oil became a source of enormous “super-profits” which were critical to the operation of capitalism in the home countries.  Iranian oil played an important role in stimulating Britain’s domestic industrial development. Winston Churchill called Iranian oil "a prize from fairyland beyond our wildest dreams." (Stephen Kinzer, All the Shah's Men, p. 39).

The vast gulf between the imperialists and their victims was epitomized in Abadan--a sprawling city in southwest Iran where Anglo-Persian built its oil refinery operation. Iranian oil official Manucher Farmfarmaian described the two worlds colliding there:

“Wages were fifty cents a day. There was no vacation pay, no sick leave, no disability compensation. The workers lived in a shantytown called Kaghazabad, or Paper City, without running water or electricity, let alone such luxuries as iceboxes or fans. In winter the earth flooded and became a flat, perspiring lake. The mud in town was knee-deep, and canoes ran alongside the roadways for transport… Summer was worse… The dwellings of Kaghazabad, cobbled from rusted oil drums hammered flat, turned into sweltering ovens… In every crevice hung the foul, sulfurous stench of burning oil… In the British section of Abadan there were lawns, rose beds, tennis courts, swimming pools and clubs; in Kaghazabad there was nothing, not a tea shop, not a bath, not a single tree.” [Manucher Farmfarmaian and Roxane Farmfarmaian, Blood and Oil: Inside the Shah’s Iran (New York: Modern Library, 1999), quoted in Kinzer, p. 67]

The brutality and humiliation of colonial domination repeatedly gave rise to mass resistance by the Iranian people. In 1905 a democratic movement rose among the new urban middle class and by summer 1906 nationwide demonstrations demanded a democratically-elected parliament and an end to the absolute rule of the Shah. Iranian teachers, intellectuals, artisans, tradesmen, businessmen, as well as farmers and laborers, and even an influential section of the Islamic clergy, all participated. A constitution was drafted, and by the end of 1906, the Majlis (parliament) opened.  This “Constitutional Revolution” was reversed in 1908, when the Shah sent thugs, backed by the Russian-trained Cossack Brigade, to attack the Majlis. In 1911, backed by Britain and Russia, the Shah shut down the parliament and arrested many delegates.

World War 1: Dividing the Region and the Spoils

During World War 1, Iran was again a battleground of rival imperialist powers. It had declared neutrality in the war, but British forces quickly invaded southern Iran to guard Britain’s oil lifeline and there was heavy fighting in Iran.

The Western powers—the British and French in particular—claimed they were fighting World War 1 to free the Middle East from the yoke of feudal, authoritarian Ottoman rule. In fact, they were fighting to determine which European power would control the Middle East—for its strategic location and its vast oil potential. 

While promising independence to the region’s peoples, the British, French, and Russians were secretly negotiating to carve up the Middle East between them.  The world only knows of this because in 1917 Lenin’s Bolsheviks overthrew Russia’s Czar and, as an act of internationalism, published the Czar’s secret treaties, including the 1916 Sykes-Picot Agreement, which the revolutionaries discovered in the Foreign Ministry archives.

Russia’s revolutionary government repudiated Sykes-Picot—which had given Russia Constantinople (now Istanbul); land on either side of the Bosphorus Straits; and large chunks of the Turkish provinces bordering Russia. The new revolutionary government also annulled all Czarist claims on Iran, encouraged Iran to resist British domination, and pledged friendship to Iran and support for its independence and territorial integrity. 

The British, however, stepped up their intervention in Iran, resolving “to stop at all costs the spread of communism to Iran, and to use [Iran] as a front-line base in its anti-Bolshevik campaign,” including by aiding Russian counter-revolutionaries in northern Iran. (Saikal, p. 17)

In 1919 Britain imposed the Anglo-Persian Agreement on Iran, giving Britain exclusive control over "Iran's army, treasury, transport system and communications network.” To secure this power, the British “imposed martial law and began ruling by fiat." (Kinzer, p. 39) Beginning in 1921, the British supported a series of military coups by the ruthless Reza Khan, who ultimately declared himself the new Shah in 1926. This began the Pahlavi dynasty where Reza Shah, as a puppet of British imperialism, carried out brutal repression against any rebellion from among the Iranian people.

The U.S. Fights for a Share of the Oil Spoils

Because, up to this point, the United States had not been a major player in the Middle East, many in the region saw the U.S. as a reform-minded nation without an imperialist agenda.  This mis-perception was heightened by President Woodrow Wilson’s “14 Points” declaration which followed the war and verbally upheld the right of self-determination for nations.

Meanwhile, behind the scenes a fierce imperialist rivalry for oil and power was brewing.  After World War 1, fears rose of a global oil shortage. In 1920 the U.S. vigorously protested the monopolization of Middle East oil by Britain and France, and a huge struggle between rival oil cartels (and their respective states) ensued.

By 1928 the British were forced to give U.S. firms a cut of Iraqi oil, thanks to America’s rising global power and the leverage exerted by U.S. firms: Standard Oil (now Exxon) supplied half of Britain’s oil. Oil historian John Blair described the resulting “Red Line” agreement as “an outstanding example of a restricted combination for the control of a large portion of the world’s supply by a group of companies which together dominate the world market for this commodity.” (Everest, pp. 38-39)

NEXT—1953: The CIA puts the Shah in power. 

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