The Silk Roads: A New History of the World (2016)

21

The Road of Cold Warfare

Before the Second World War had drawn to a close, the fight to control the heart of Asia was well under way. In a grandly named ‘Tripartite Treaty’ signed in January 1942, Britain and the Soviet Union solemnly undertook ‘to safeguard the Iranian people against the privations and difficulties arising as a result of the present war’, and to ensure that they received enough food and clothing. In fact, as the treaty went on to make clear, the issue had little to do with the security of Iran – and everything to do with commandeering its infrastructure: the treaty therefore declared that Britain and the Soviet Union would be able to use the country’s roads, rivers, pipelines, airfields and telegraph stations as they pleased.1 This was not an occupation, stated the treaty; it was a case of help being given to an ally. Fine words – but rather creative ones.

Ostensibly, the treaty was designed to prevent German expansion into Iran and to enable resources to be brought through the Gulf to help the Allies. Some, however, reckoned that the British also had an eye on the long term. The American minister in Teheran, Louis G. Dreyfus, for example, sent regular cables back to Washington commenting on the increasingly aggressive demands made of the Shah and on the accusations that there was a fifth column in Iran working against British interests. ‘I am convinced’, he wrote in August 1941, ‘that the British are using [the situation] as a pretext for the eventual occupation of Iran and are deliberately exaggerating [the] potency’ of the current circumstances.2

Britain’s aims of maintaining – and strengthening – its position in Iran were not made more attainable by the way its officials and troops treated the local population. A full decade before the war, one journalist had written a withering critique of Britain’s behaviour, arguing that Iranians were treated as badly ‘as the East India Company was said to have treated the Indians two hundred years ago’.3 Animosities were intensified by the way British officers insisted that Iranian officers should salute their counterparts when they passed them – without this being reciprocated. There were widespread complaints that the British behave as ‘the Sahibs, the White Men, and treat [the Iranians] like a colonised people’. This was in sharp contrast to Soviet officers who kept to themselves, rarely went out and did not demand salutes – at least according to one German intelligence officer stationed in the region.4

The attitudes of Sir Reader Bullard, the British ambassador at this delicate time, were typical. Food shortages and inflation during the latter part of the war had nothing to do with the failures of the occupying forces, or with the logistical difficulties of maintaining the Persian Corridor to take weapons and other goods north from the Gulf. The fault, wrote Bullard, lay with the Iranians themselves: ‘the Persian now has a double pleasure in stealing, raising prices to famine level, and so on; he always blames the British’.5 Remarking on ‘the low opinion that I have formed of the Iranians’, he flippantly added in one of his missives to London that ‘most Persians will surely become blowflies in their next incarnation’.6 Dispatches such as these caught the attention of Winston Churchill. ‘However natural Sir Reader Bullard’s contempt for all Persians’, wrote the Prime Minister, it ‘is detrimental to his efficiency and our interests’.7

What made things worse was that such deeply ingrained views of entitlement and superiority were out of kilter with the realities of the situation – where it was increasingly clear that the dominant position built by the British was at risk. Ugly scenes broke out in Teheran in 1944 when the Russians discovered that negotiations were under way to grant a concession in the north of Iran to an American consortium of oil producers. Flames were fanned by the Tudeh party, a collection of left-wing militants whose message of reform, redistribution of wealth and modernism was given considerable support from Moscow. Such was the Soviet Union’s commitment to derailing discussions that at the height of these tensions Russian troops took to the streets alongside thousands of demonstrators, ostensibly to guard the protesters. To many, it looked uncomfortably as though force would be used to enable the Soviets to get their way and have the agreement cancelled. This was emphasised by the thuggish Sergei Kavtaradze, Assistant Foreign Commissar, whom Stalin had sent to Teheran to warn that there would be consequences for angering the Soviet Union.8

In a denouement that dripped with high drama, it was left to Mohammed Mossadegh, a canny, articulate and consummate politician who had the knack of capturing the zeitgeist. He was a man, wrote one British official, who looks ‘rather like a cab horse and is slightly deaf so that he listens with a strained but otherwise expressionless look on his face. He conducts conversations at a distance of about six inches at which range he diffuses a slight reek of opium. His remarks tend to prolixity and he gives the impression of being impervious to argument.’9 Mossadegh was a ‘Persian of the old school’, according to a profile in the Observer that was added to Foreign Office files, ‘polite, prodigal of bows and handclaspings’.10 In fact, as it proved, the British seriously underestimated him.

Mossadegh began to expound a vision, first set out in parliament at the end of 1944, that Iran could not and should not allow itself to be manipulated and terrorised by outside powers. The Knox D’Arcy concession and the way that Anglo-Iranian (previously Anglo-Persian) behaved provided object lessons in what happened if leadership was not robust enough. Time and again, he said, Iran had been taken advantage of and used as a pawn by rival interests that brought little benefit to the country’s people. It was simply wrong that choices should be made as to whom Iran should do business with: ‘let us negotiate with every state’, he declared, which ‘wishes to buy oil, and get to work to liberate the country’.11

Mossadegh was saying what many people had long felt – that it was invidious that the fruits lying under the soil brought limited benefits for Iran. It was hard to argue with the logic. In 1942, for example, the British government received £6.6 million in tax receipts from Anglo-Iranian’s activities; Iran received barely 60 per cent of this figure as a royalty payment. In 1945, the difference was even more stark. Where the exchequer in London benefited to the tune of £16 million in taxes from the business, Teheran took £6 million – in other words, only just over a third.12 It was not just about the money; as one well-informed British observer noted, the problem was that ‘no material benefits could compensate for personal degradation and loss of dignity’.13

Such insight was unusual, as the author went on to admit. Laurence Elwell-Sutton had studied Arabic at the School of Oriental and African Studies before working for Anglo-Iranian in Iran before the Second World War. A gifted linguist who developed a passion for Persian culture, Elwell-Sutton was flabbergasted by the clumsy way Anglo-Iranian employees treated the local population. ‘Too few Europeans took the trouble to find out’ about Persians, finding it easier to ‘look on the “natives” . . . as dirty savages with peculiar habits that were of no interest to anybody, except perhaps anthropologists’. This ‘racial antipathy’ was bound to end in disaster; ‘unless it goes’, he concluded, ‘this company will’.14

In the circumstances, it was not hard to see how momentum built behind reformers like Mossadegh. The age of European empire had long since started to erode – as had been evident in Iraq when Gertrude Bell was reminded that independence was not in Britain’s gift to give. It was inevitable in Iran, and elsewhere, that there would be growing demand for countries subjected to domination and heavy influence from abroad to take control of their own destinies – and a pattern quickly emerged and accelerated as the war went on. As it did so, Britain became an empire literally in retreat as its Silk Roads collapsed.

Tidal waves of military pressure in Asia had caused a series of Dunkirks in the east – cases of shambolic retreat that served as poignant markers of the end of Britain’s golden era. Hundreds of thousands fled from Burma as Japanese forces fanned out across South-East Asia, seeking to take advantage of British and French preoccupations with problems closer to home to expand into regions that had long been of strategic and economic interest to Tokyo. Germany’s allies in the east were quick to realise that an opportunity had presented itself that enabled Japan to advance its own imperial credentials over a wide region. As the Japanese forces pushed forward, many suffered as a result. Some 80,000 died of starvation and disease. Scenes in the Malay peninsula were equally dramatic as thousands fell back on Penang and Singapore – with the lucky ones making it out before the city fell. One unmarried woman who was evacuated just in time wrote a few weeks later that the chaos of the British withdrawal was ‘a thing which I am sure will never be forgotten or forgiven’ by those who witnessed or took part in it.15

The recoil continued as hostilities in Europe and the Pacific came to an end. The decision to pull out of India altogether came after three decades of concessions and promises that had raised expectations about self-governance, autonomy and ultimately independence. By the end of the war, British authority was fading fast and threatened to spiral out of control as months of disturbances, anti-imperial demonstrations and strikes set in that brought cities across the north of the subcontinent to a standstill. Initial plans to make a ‘phased withdrawal’ from India which also sought to provide protection for the Muslim minorities were rejected by London as too costly and too lengthy.16Instead, the announcement was made in early 1947 that Britain would withdraw within sixteen months, creating panic as a result. It was a disastrous decision, as Winston Churchill, voted out of office after the war, told the House of Commons. ‘Will it not be a terrible disgrace to our name and record if . . . we allow one fifth of the population of the globe . . . to fall into chaos and into carnage?’17

When these warnings were not heeded, pandemonium broke loose in the subcontinent. Communities that had been stable for so long erupted with violence as families that had lived in towns and villages for centuries embarked on one of the largest mass migrations in human history. At least 11 million people moved across the new borders of the Punjab and Bengal.18 The British in the meantime drew up detailed evacuation plans to try to limit the number of their own nationals likely to be caught up in the fighting.19 This concern did not extend to the local population.

It was a similar story elsewhere as Britain stumbled from one crisis to another. In a bid to preserve the balance of the delicate situation in Palestine, so as to retain control of the refinery and port of Haifa, keep Suez secure and maintain friendly relations with leading figures in the Arabic world, active steps were taken to try to curb Jewish emigration from Europe. After plans had been drawn up by British intelligence to sabotage ships bringing refugees to Palestine – and pin blame on an apparently powerful but non-existent Arab terrorist organisation – the British took more direct action.20

The low point came in the summer of 1947, after ships on their way to load Jewish émigrés in French ports had been harassed. One vessel carrying more than 4,000 Jews, including pregnant women, children and many elderly, was rammed by British destroyers as it made its way east – even though the decision had already been taken to refuse entry to the passengers when they reached Palestine.21 Treating those who had survived concentration camps or lost family in the Holocaust in this way was a public relations disaster: it was clear that Britain would stop at nothing to maintain its interests abroad – and think nothing of others in the process.

The clumsiness was apparent in dealings with imageAbdullāh, the ruler of Transjordan, who was now lavished with attention and promised British military support, set out in secret agreements, for his regime after it became independent in 1946. He took advantage of this promise to embark on a plan to extend his frontiers to include all of Palestine once the British withdrew – obtaining a green light, albeit qualified, from London.22 ‘It seems the obvious thing to do,’ his Prime Minister was supposedly told by Ernest Bevin, the Foreign Secretary; ‘but do not go and invade the areas allotted to the Jews.’23 Whatever steer was given, the chaos that descended on yet another part of the world where Britain was pulling back was compelling evidence of the malign effects of imperial European power. The Arab–Israeli War of 1948 may not have been the result of policy being conducted through nods, nudges and winks, but it did represent a void opening up as a result of the changing of the guard.24

Things were little better in Iraq, where there was turmoil after the Prime Minister, Ṣāliimage Jabr, agreed terms with Britain in 1948 that extended the latter’s use of airbases in the country for a further twenty-five years. News of the agreement led to strikes, riots and eventually Jabr’s resignation as he was hounded from office by an angry mob.25 Animosity towards Britain had been stoked by a range of issues, including the occupation of Baghdad during the Second World War and the perceived failure of the British to support the Arabs in Palestine, especially when set against the attempts of London to retain a permanent military foothold in Iraq. This was all made worse by rampant inflation and food shortages that followed poor harvests – with the result that one astute observer recognised that the ‘internal situation in Iraq was dangerous’.26 Britain therefore took steps to help the ‘Iraqi Prime Minister . . . resist popular agitation by giving him concessions’. This included offering to share the airbase at Habbaniyah; the Iraqis should be happy with this ‘first-class example of co-operation’, policymakers in London asserted. Britain would ‘not be prepared to make [this offer] to any other state’ – and the Iraqis should be very grateful for being allowed to feel ‘superior to other states in the Middle East’.27

Compounding all this was the fact that, as was the case with other countries, Iraq had little to show for the oil that was pumped from its soil. In 1950, some 90 per cent of the population were still illiterate. Worse, Britain was held responsible for exerting too strong a grip on the country: when it came to borrowing funds to build and extend the railway network, for example, Britain demanded Iraq’s reserves as security. This raised the prospect that the oilfields would be taken over in the event of default – much as had happened with Suez in the nineteenth century when control of the vitally important canal and of its finances was seized by the British.28 Britain found itself in a lose–lose situation: it had spent all its political capital and was trusted by no one. Such was the suspicion that even agencies like the Middle East Anti-Locust Unit (MEALU), which had enjoyed considerable success after being established during the war, were wound down – removing technical expertise that was helpful both in dealing with damaging swarms and in protecting the food supply.29 The states of the Middle East were flexing their muscles and turning against the west.

In the meantime, the Soviet Union was also resurgent. A new narrative had emerged in the USSR following the defeat of Germany – one where Stalin’s role in the genesis of the war as Hitler’s ally was quietly forgotten, and replaced with a story of triumph and of destiny being fulfilled.30 The Revolution of 1917 had failed to deliver the global transformation anticipated by Marx and his disciples; thirty years later, however, it seemed that the time had come for Communism to sweep across the world and dominate Asia just as Islam had done in the seventh century. It had already begun to diffuse through China, where the promises of equality, of justice and above all of land reform brought support for the Communist party and enabled it to drive government forces back and eventually off the mainland altogether.

Similar patterns were starting to be seen elsewhere, as left-wing parties began to attract increasing support in Europe and in the United States. Many were persuaded by an ideal that promised a harmony in sharp contrast to the horrors of a war that had culminated in two atomic bombs being dropped on Hiroshima and Nagasaki – including some who had worked on the nuclear programme – and were disillusioned by the fact that two titanic struggles between European nations in little more than three decades had wrought devastating results across the world.

Stalin fanned these flames astutely in a speech that was widely reported around the world in the spring of 1946. The Second World War had been inevitable, he declared, ‘because of the emergence of global economic and political factors that were implicit in the concept of modern monopolistic capitalism’.31 The speech was a statement of intent: capitalism had dominated the world for too long, and was responsible for the suffering, mass murder and horrors of the wars of the twentieth century. Communism was a logical reaction to a political system that had proved itself to be flawed and dangerous. It was a new system that accentuated similarities rather than differences, that replaced hierarchies with equality. It was not just an attractive vision, in other words, but a viable alternative.

Not long before, Churchill had gambled the future of the countries lying west of the Soviet Union’s borders. ‘Poor Neville Chamberlain believed he could trust Hitler,’ Churchill told a junior member of his staff immediately after the negotiations at Yalta about what the post-war world would look like. ‘He was wrong. But I don’t think I’m wrong about Stalin.’32 Chamberlain had indeed been wrong; but so too was Churchill – as he soon recognised. Nobody knows, he said on 5 March 1946 in his speech in Fulton, Missouri, ‘what Soviet Russia . . . intends to do in the immediate future’. However, the fact that its philosophy was expansive and evangelical, he noted, meant that it represented a threat to the west. ‘From Stettin in the Baltic to Trieste in the Adriatic, an Iron Curtain has descended across the continent.’33

The fate of the centre of the world hung in the balance. Iran was the fulcrum. US strategists were convinced that the Soviets wanted complete domination of Iran because of its oil, but also because of its naval bases and its location in the middle of a web of international air routes. The Iranian government had awarded the concession for the oil in the north of the country to the US only thanks to assurances from the American ambassador that the US would, if necessary, provide military support in the event of Soviet forces entering the country following fierce opposition from Moscow to the agreement.34

In the summer of 1946, tensions rose as strike action took hold across Iran. With rumour and counter-rumour swirling through the streets of Teheran, the country’s immediate future seemed to be at stake. Despite its strong desire to keep hold of its assets, it was painfully clear that Britain could do little to influence events where it mattered. Intelligence reports painted a gloomy picture of imminent military action by Moscow against Iran and Iraq, reporting detailed invasion plans which included information on the likely focal point of the ‘powerful Soviet cavalry and motorised forces’ in the event of an attack. The Soviet General Staff were reported to have reached bullish conclusions about occupying Mosul and were ready to set up a ‘popular Iranian Government’ once the Shah had been overthrown. Reprisals would then be taken, according to the British, against the previous regime whose leading figures would be branded as ‘traitors and collaborators’. Soviet paratroopers were ready to be dropped close to Teheran to lead an assault that would quickly be over.35

A sense of real alarm gripped Washington. The Americans had been watching Iran closely since December 1942, when the first of 20,000 US troops arrived in Khoramshahr in the Gulf to set to work on improving Iran’s transportation system. In order to oversee the logistics, a large American camp was built in Teheran itself, which became the headquarters of the US Persian Gulf Command as a whole.36 The British and the Soviets were putting their own interests first in Iran, and as a result were constantly undermining the war effort and the state of Iran at the same time. Iran was being pulled dangerously in every direction, General Patrick Hurley reported to President Roosevelt.37

The Americans who were deployed to Iran to support and monitor supply lines during the war initially experienced something of a culture shock. The Iranian army, found Major-General Clarence Ridley, was poorly trained, under-resourced and essentially useless. If it was to hold its own with hostile neighbours, heavy investment would be needed to train a new generation of officers and to buy good equipment. This was music to the new Shah’s ears, as he was desperate to make his mark on Iran by a programme of modernisation. The problem, as his (American) budget adviser told him bluntly, was that it was not possible to build an army along the lines of those in the west: if funds were diverted to military expenditure, he was told, ‘there would be little if anything for agriculture, education or public health’.38

Under-prepared, disorganised and weak, Iran seemed to have little chance of seeing off the Soviet Union at a time when Stalin’s posturing and behaviour were a matter of profound concern in the United States. Some who heard Stalin’s speech concluded that this was nothing other than the ‘declaration of World War III’.39 George Kennan, chargé d’affaires at the US embassy in Moscow who had witnessed Stalin’s purges at first hand, drew a similar conclusion, warning in early 1946 of a major global struggle ahead. ‘At the bottom of the Kremlin’s neurotic view of world affairs’, he wrote, is the ‘traditional and instinctive Russian sense of insecurity’. The Soviet Union, he concluded, was ‘a political force committed fanatically’ to engage in competition with the United States to the point that its aim was to ensure that ‘the internal harmony of our state be disrupted, our traditional way of life be destroyed [and] the international authority of our state be broken’.40

Iran’s political and strategic importance now propelled it to the forefront of US foreign policy. Systematic efforts were made to help bolster the country. In 1949, the Voice of America radio station began broadcasting in Farsi to the local population, with the first programme featuring President Truman commenting on ‘the historic bond of friendship’ between Iran and the United States, and promising assistance to help create a ‘prosperous and . . . peaceful world’ that was free from oppression.41 By the time war broke out in the Korean peninsula a year later, more direct help was being offered. As a State Department briefing put it, while the declining economy had ‘not yet reached catastrophic conditions’, if strong support was not now given there was a risk of ‘the complete disintegration of the country and its absorption immediately or eventually into the Soviet bloc’.42 Truman himself needed no convincing. ‘If we stand by,’ he observed, ‘[the Soviets will] move into Iran and they’ll take over the whole Middle East.’43

Radio broadcasts became increasingly pointed as Iranians were told that ‘free nations must stand together’, that ‘US security is bound up with the security of other nations,’ and that the ‘strength of the free world’ was continuing to grow. This went hand in hand with reports which emphasised the threat posed by the Soviet Union to world peace, which stated that ‘the aim of communist leaders is the universal suppression of human freedom’ and which even went so far as to claim that ‘Soviet teachers make their homes in broken-down freight cars which had been condemned as unfit to transport cattle’ and lacked heat, basic sanitary facilities and clean water.44

Financial aid began to pour into the country, rising nearly five times over the course of three years from $11.8 million in 1950 to $52.5 million in 1953. The aim was to encourage economic development in Iran, to stabilise its political culture and to lay the basis for reform, but also to provide military and technical assistance for its self-defence. These were the first stages in the building of an American client state in the Middle East.45

The motivation for doing so was based in part on the realisation that Britain was no longer able to prop up regimes in the way that it had done in the past, and in part on a frank recognition that Soviet expansionism required a response. Nevertheless, this was not the only reason for the close attention paid to Iran. In 1943, for example, during the major conference held by Allied leaders in Teheran, neither Winston Churchill nor President Roosevelt had bothered even to meet with the Shah. Put simply, both thought it would have been a waste of time to do so.46 Likewise, the following year, Saudi Arabia was dismissed by the US as a country of limited consequence, whose requests for economic help could be easily swatted away by President Roosevelt as being ‘a little far afield for us’; Roosevelt added that it would be better for Saudi concerns and requests to be directed to Britain than to the US.47 By the time the war ended, things were very different, with Saudi Arabia alone being considered to be ‘more important to American diplomacy than almost any other small nation’.48 The reason for this was oil.

During the war, a gritty oilman named Everette Lee DeGolyer, who had made his money in the American petroleum industry after studying geology in Oklahoma, visited the Middle East to assess the region’s existing oilfields and to advise on the long-term potential and significance of the resources of the region in its own right, and in relation to those of the Gulf of Mexico, Venezuela and the United States itself. His report, even though laced with conservative estimates and caveats, was astounding. ‘The center of gravity of world oil production is shifting from the Gulf-Caribbean area to the Middle East – to the Persian Gulf area – and is likely to continue to shift until it is firmly established in the area.’49 One of those who travelled with him put it more bluntly when reporting back to the State Department: ‘The oil in this region is the greatest single prize in all history.’50

This was not lost on the British, who reacted jealously to the prospect of the US paying greater attention to the region as a whole. The Americans should be told to stay out of the Middle East and away from the strong position Britain had built, Churchill was told by a leading industrialist; ‘oil is the single greatest post-war asset remaining to us. We should refuse to divide our last asset with the Americans.’51 This was articulated forcefully by Lord Halifax, the British ambassador to Washington, who took umbrage at the way officials at the State Department had tried to deflect him. British policymakers were also concerned about what was going on, fearing that ‘the United States is intending to divest us of our oil assets in the Middle East’.52 The Prime Minister himself got directly involved, sending a telegram to President Roosevelt stating, ‘I have been watching with some misgivings’ how the negotiations had been going on; ‘you may be sure I should only wish to arrive at what is fair and just between our two countries’.53

This meant reaching agreement over how to divide this crucial part of the world between Britain and the United States. A meeting between Halifax and President Roosevelt resolved the problem: as far as the US was concerned, the ‘oil in Persia was [British and] . . . we both had a share in Iraq and Kuwait and . . . Bahrein and Saudi Arabia were American’.54 It was like the agreements reached by Spain and Portugal in the late fifteenth and early sixteenth century, or the discussions held between the Allied leaders during and immediately after the Second World War, that divided the world neatly in two.

The Americans and the British set about dealing with this division in very different ways. From the US perspective, the key issue was that the price of oil had doubled between 1945 and 1948 – while the number of cars in the United States alone went up by more than 50 per cent and the value of motor-vehicle factory sales rose by seven times.55 In response, initially, the US took an approach to the situation that was reasoned to the point of enlightened: it was inevitable that countries that found themselves blessed with natural resources and being courted from all sides would seek to maximise their own positions. As such, it was sensible to renegotiate the terms of oil concessions – and to do so gracefully rather than under duress.

There were already rumblings and threats of nationalisation, which reflected the new world order. For one thing, new deals that were being made with oil-rich countries were increasingly generous and competitive – such as that struck with J. Paul Getty for a concession in the Neutral Zone between Saudi Arabia and Kuwait which paid almost double the royalties per barrel compared to what was being paid in other parts of the Middle East, and which created rivalry and antagonism in countries that had locked in to agreements at an earlier stage. This not only made them hotbeds for dissent over the way the resources were being expropriated, and prompted demands for nationalisation; it also made them vulnerable to Communist rhetoric and to overtures from Moscow.

A remarkable shift in revenues followed as the US softened its trading positions and renegotiated a raft of deals. In 1949, for example, the US Treasury collected $43 million in taxes from Aramco, a consortium of western oil companies, while Saudi Arabia received $39 million in revenues. Two years later, after changing the system of tax credits whereby businesses could offset their expenses, the business was paying $6 million in the US but $110 million to the Saudis.56 There was a domino effect as other concessions in Saudi, as well as in Kuwait, Iraq and elsewhere, reset their terms in favour of local rulers and governments.

Some historians have spoken of this moment of reworking the flows of currency as being as momentous as the transfer of power from London for India and Pakistan.57 But its impact was most similar to the discovery of the Americas and the redistribution of global wealth that followed. Western corporations that controlled concessions and whose distribution was largely concentrated on Europe and the United States began to funnel cash to the Middle East and, in doing so, started a shift in the world’s centre of gravity. The spider’s web of pipelines that criss-crossed the region and connected east with west marked a new chapter in the history of this region. This time, it was not spices or silks, slaves or silver that traversed the globe, but oil.

The British, however, who had failed to read the signs as clearly as their American counterparts, had other ideas. In Iran, Anglo-Iranian was a lightning rod for criticism. It was not hard to see why, given the huge imbalance in the amounts paid to the British exchequer compared with royalties disbursed to Iran.58 Although other countries in the region could also complain about the lack of benefits that were exchanged for their black gold, the scale of the unevenness in Iran made the situation look particularly bad. In 1950, although Ābādān was home to the refinery that was by now the largest in the world, the town itself had as much electricity as a single London street. Barely a tenth of the 25,000 children of school age were able to attend classes, such was the dearth of schools.59

As elsewhere, Britain was caught on the horns of a dilemma from which there was no escape: renegotiating the terms of the oil concession would be all but impossible, as the astute and well-connected US Secretary of State Dean Acheson observed. Anglo-Iranian was majority-owned by the British government and as such was seen as a direct extension of Britain and its foreign policy – not without reason. Like the East India Company, there were blurred lines between the interests of the business and those of the British government; and as with the EIC, Anglo-Iranian was so powerful that it too was effectively a ‘state within a state’, while its power ‘was in the end that of Britain’.60If Anglo-Iranian caved in and gave Iran a better deal, concluded Acheson, then it would ‘destroy the last vestige of confidence in British power and in the pound’. Within months, he predicted, Britain would have no overseas assets left at all.61

London’s heavy reliance on the company’s revenues made the situation precarious, as Acheson recognised. ‘Britain stands on the verge of bankruptcy,’ he wrote in a cable; without her ‘important overseas interests and the invisible items in her balance of payments . . . she cannot survive’. This was why the British were using all the tricks of the diplomatic trade, issuing shrill reports that constantly emphasised the imminent threat of a Soviet invasion. Acheson, for one, was having none of it. ‘The cardinal purpose of British policy is not to prevent Iran going commie,’ despite Britain’s claims to the contrary; ‘the cardinal point is to preserve what they believe to be the last remaining bastion of Brit solvency.’62

Things turned nasty, then, when new terms were offered to Iraq in 1950 but were conspicuously withheld from Iran at the same time. The fact that the Iraqi Oil Company was part-owned by Anglo-Iranian rubbed salt in the wounds, and provoked a furious reaction in Iran. Nationalist politicians sprang up to proclaim the iniquity of Anglo-Iranian’s virtual monopoly, spicing their criticisms with comments that were intended to ruffle feathers. All corruption in Iran was the direct result of Anglo-Iranian, stated a member of the Majlis.63 If nothing was done, it would soon come about that ‘women’s chadors will be ripped from their heads’, claimed one demagogue.64 It would be better, said another, for the entire oil industry of Iran to be destroyed by an atomic bomb than to allow Anglo-Iranian to exploit the people and the country.65 Mossadegh put it less bluntly. If he became Prime Minister, he purportedly said, he would ‘have no intention of coming to terms with the British’. Instead, he went on, he would ‘seal the oil wells with mud’.66

Anti-British rhetoric had been bubbling for a generation; now, it entered mainstream consciousness: Britain was the architect of all Iran’s problems and could not be trusted. It considered only its own interests and was imperialist in the worst sense of the word. The elision of Iranian identity with anti-western sentiment took root. There were to be profound long-term implications.

Mossadegh seized the moment with both hands. Enough was enough, he declared. The time had come to ensure the prosperity of the Iranian nation and to ‘secure world peace’. The radical proposal was put forward at the end of 1950 that the proceeds should not be shared with Anglo-Iranian or with anyone else, but rather ‘that the oil industry of Iran be declared as nationalised throughout all regions of the country, without exception’.67 Ayatollah Kashani, a populist cleric who had only recently returned from exile and was already a well-known and vocal critic of the west, gave his wholehearted support to this call to action, urging his supporters to use every method they could to deliver change. Within days, the Prime Minister, imageAlī Razmārā, was assassinated; shortly afterwards, so too was the Minister of Education. Iran flirted with anarchy.

Britain’s worst fears were realised when Mossadegh himself was chosen as the new Prime Minister by the Majlis in the spring of 1951. He at once passed a law nationalising Anglo-Iranian with immediate effect. This was a disaster, as both the press in London and the British Cabinet realised. It was important, declared the Defence Minister, ‘to show that our tail [can]not be twisted interminably’. If Iran was ‘allowed to get away with it’, he went on, ‘the next thing could be an attempt to nationalise the Suez canal’.68 Plans were drawn up to drop paratroopers into Iran to secure the refinery at Ābādān if necessary. These were the death throes of a great empire in retreat, desperately thrashing to hold on to its former glories.

Mossadegh turned the screw, giving British employees of Anglo-Iranian a week to pack and to get out of Iran in September 1951. To top it off, Ayatollah Kashani declared a national day of ‘hatred against the British government’. Britain had become a byword for all that was wrong in Iran, one that united a wide spectrum of political beliefs. ‘You don’t know how crafty [the British] are,’ Mossadegh told one high-ranking American envoy. ‘You don’t know how evil they are. You do not know how they sully everything they touch.’69 This sort of rhetoric made him wildly popular at home; it also made him famous abroad: in 1952, he was on the cover of Time magazine as its Man of the Year.70

Britain’s heavy-handed attempt to force the situation did not help. Faced with losing control not only of Anglo-Iranian but of the income it brought, the British government went into crisis mode, organising an embargo on all Iranian oil. The aim was to hurt Mossadegh and force him to capitulate. Starving Iran of funds would soon have the desired effect, opined Sir William Fraser, the British ambassador in Teheran: ‘when [the Iranians] need money, they will come crawling to us on their bellies’. Comments like these that appeared in the mainstream press were hardly likely to help Britain’s cause in the court of public opinion.71

Instead they simply strengthened resolve in Iran, to the point that by the end of 1952 the British were no longer so confident that the tactic of using sanctions would pay off. An approach was therefore made to the recently established Central Intelligence Agency to support a plan ‘of joint political action to remove [Iran’s] Prime Minister Mossadegh’ – in other words, to stage a coup. Not for the last time, regime change in this part of the world seemed the answer to the problem.

Officials in the United States responded favourably to British overtures. Operatives in the field in the Middle East had already been given free rein to explore creative solutions to problems with local rulers who were either not well enough disposed to the US or seemed eager to flirt with the Soviet Union. A group of young gung-ho agents from privileged east coast backgrounds had already been involved in a putsch that saw the overthrow of the leadership in Syria in 1949, and in the removal of the corpulent, corrupt and unreliable King of Egypt, Farouk, in an operation unofficially known as ‘Project FF’ (or Project Fat Fucker) three years later.72

The zeal of men like Miles Copeland and two of the sons of President Theodore Roosevelt – Archie and Kermit (Kim) – was reminiscent of that of the British agents in Central Asia a century earlier who felt they could shape the world, or even that of more modern counterparts who felt that passing secrets to the Soviet Union would likewise have positive effects. After the fall of the government in Syria, for example, the young Americans went off to tour ‘Crusader castles and off-the-beaten-path places’, admiring the architecture and atmosphere of Aleppo on the way.73 Decisions were made on the hoof. ‘What’s the difference’, Copeland asked the dour polymath Archie Roosevelt, ‘between my fabricating reports and your letting your agents do it? At least mine make sense.’74 The way these men in the field played hard and fast was picked up on in the US with one senior intelligence officer admonishing them by saying that ‘irresponsible free-wheeling will not be tolerated in the future’.75 Nevertheless, when it came to the question of Iran, their opinions were in high demand.

Things began to move after a routine meeting in Washington at the end of 1952 when British officials airing their anxieties about the economic impact of nationalisation struck a chord with American concerns about the possible future path of Iran. The CIA station in Teheran was anxious about Mossadegh and advised Washington separately that the US should ‘prefer a successor government’ in Iran. Planners quickly concluded that the Shah had to be brought into the plot to provide unity and calm and so that the removal of the Prime Minister could be ‘made to appear legal or quasi-legal’.76

Persuading the Shah was easier said than done. A nervous and vain man, he panicked when first told of the plan, codenamed Operation Ajax. The involvement of the British in particular worried him, according to one of the American architects of the plan, who noted that he had ‘a pathological fear of the “hidden hand” of the British’, and feared that the operation was a trap. He required cajoling, bullying and warning: key words were dropped into BBC broadcasts from London to reassure him that the operation had been sanctioned at the very highest level; a radio speech in which President Eisenhower explicitly promised US support for Iran also helped convince him; meanwhile he was told in person that if he did not lend his support Iran would become Communist – ‘a second Korea’, as Kim Roosevelt put it.77

In order to ensure that ‘public opinion . . . be fanned to fever pitch’ as a prelude to removing Mossadegh, funds were sent from Washington to cultivate key individuals and turn them against the Prime Minister. Roosevelt cultivated leading members of the Majlis, almost certainly by bribing them (the aim, he wrote euphemistically, was to ‘persuade’ them to withdraw their support of Mossadegh).78

Money was spent liberally elsewhere. According to one eyewitness, the flood of American currency into Teheran was so great that the value of the dollar relative to the rial fell by nearly 40 per cent during the summer of 1953. Some of these funds were spent paying for crowds to march on the streets of the capital, organised by the CIA’s two main local operatives. There were other notable recipients too – above all mullahs like Ayatollah Kashani, whose interests were judged to be mutually compatible with the aims of the plotters.79 Muslim scholars had concluded that the precepts and anti-religiosity of Communism made the doctrine anathema to the teaching of Islam. As such, there was an obvious overlap for the CIA to strike deals with clerics, who were emphatically warned of the dangers of a Communist Iran.80

After British and American planners had converged on Beirut in June 1953, a plan was devised that was approved personally by Winston Churchill, the British Prime Minister, at the start of July and then by President Eisenhower a few days later. Ideas were then refined by intelligence agents for the best way of communicating to what they referred to as ‘rather long-winded and often illogical Persians’ that regime change was wanted by the west, and should take place smoothly and without mishap.81

In the event, things went spectacularly wrong. Covers were blown and timings went awry as the situation descended into chaos. Spooked, the Shah flew out of the country without finding time to put on his socks. When he stopped in Baghdad on his way to Rome, he met with the US ambassador to Iraq, who took the opportunity to make a proposal: ‘I suggested for his prestige in Iran [that] he never indicate that any foreigner had had a part in recent events.’ This had nothing to do with the Shah’s prestige, and everything to do with keeping options open and, above all, preserving the US’s clean reputation. The Shah, ‘worn [out] from three sleepless nights [and] puzzled by the turn of events’, could hardly think straight. Nevertheless, reported the relieved ambassador back to Washington, ‘he agreed’.82

As the Shah made his way to exile in Italy, Iranian radio broadcasts disseminated vicious reports, while the press denounced him as a whore, a looter and a thief.83 The trauma was not lost on his young wife Soraya (many whispered she was younger than the reputed nineteen when she married): she recalled strolling down the Via Veneto in a red and white polka-dot dress, discussing the spiteful politics of Teheran and listening to her husband mournfully contemplate buying a small plot of land to start a new life – perhaps in the United States.84

Mistakes and misadventures worthy of a theatrical farce followed the Shah’s flight. Rumours abounded in the streets that Mossadegh was seeking to claim the throne for himself, and the tide turned. And then, in a matter of days – and against all the odds – the Shah was on his way home, stopping in Baghdad briefly to put on the uniform of the commander-in-chief of the air force. Returning in splendour and glory, he presented himself not as a coward who had fled in fear, but as a hero coming back to take control of the situation. Mossadegh was arrested, tried and sentenced to solitary confinement; this was followed by a lengthy period of exile until his death in 1967.85

Mossadegh paid a heavy price for articulating a vision for the Middle East in which the influence of the west was not just watered down but removed altogether. His misgivings about Anglo-Iranian had developed into a view of the west as a whole that was both negative and damaging. This made him a troublemaker of the first order in Iran, and enough for British and American policymakers to formulate plans to remove him from the stage altogether. His loud protestations came at a time when others too were becoming vocal critics of western control of the networks linking east and west; in Egypt, rising animosity saw anti-British rioting and demands for the evacuation of British troops based at Suez. A report to the Joint Chiefs of Staff by a US State Department visitor to Cairo was unequivocal about the situation. ‘The British are detested,’ he wrote. ‘The hatred against them is general and intense. It is shared by everyone in the country.’ An urgent solution was needed.86

Times were changing. And in this sense Mossadegh was the most articulate of those setting out the vision of a new era, one that involved the recoil of the west from the centre of Asia. Although the precise circumstances of his demise were kept hidden for decades by the intelligence agencies, who stayed alert to the ‘damaging consequences’ declassification of material would bring, few had any illusions that the removal of Mossadegh had been orchestrated by western powers for their own ends.87 As such, Mossadegh was the spiritual father of a great many heirs across this region. For while the methods, aims and ambitions of a group as diverse as Ayatollah Khomeini, Saddam Hussein, Osama bin Laden and the Taliban varied widely, all were united by a core tenet that the west was duplicitous and malign and that liberation for local populations meant liberation from outside influences. There were different ways of attempting to achieve this; but as the case of Mossadegh showed, those who presented a problem for the west were liable to face the consequences.

Psychologically, then, the coup was a pivotal moment. The Shah drew all the wrong conclusions, and convinced himself that the people of Iran adored him. In fact, there was ambivalence at best for the Shah, whose cavalry officer father had taken the throne only thirty years earlier. His flight to Rome demonstrated a worrying lack of backbone. His conviction that he was the man to modernise the country depended on his ability to read the prevailing political winds and to stand independently of western, above all American, intervention. This was a lot to ask of a vain man whose roving eye and love of the finer things in life provided ammunition for his rivals and left little time for good judgement.

More than anything, though, the CIA-backed coup of 1953 marked a watershed for America’s role in the Middle East. Here was a ‘second chance’ to save Iran, reasoned John Foster Dulles, the new Secretary of State, a chance to make sure it did not slip out of the west’s orbit.88 Given that a ‘democratic independent Iran [did not appear] to be possible in the circumstances’, the US ambassador to Teheran told the Shah, there were two choices: a free ‘undemocratic independent Iran’ or a ‘permanently . . . undemocratic independent Iran, behind the iron curtain’.89 It was the direct antithesis of the loud and public message that the west was advocating in its struggle with Communism about freedom and about democracy.

It was the point where the United States stepped into the breach; it was the point where the United States came into serious contact with the region criss-crossed for centuries by the Silk Roads – and set about trying to control it. But there were dangers ahead. Posturing about democracy on the one hand while being prepared to sanction and even orchestrate regime change on the other made for uncomfortable bedfellows. It could be dangerous to play both sides – not least because in due course there would inevitably be a breakdown in trust and a collapse of credibility. As Britain’s star continued to fade, much depended on what lessons America would learn from what had happened in 1953.