the spiritual and political leader who was most
effectively challenging the Shah’s fitness to rule.
In Iran, the Shah kept a tight grip on the coun-
try, backed by the military forces on which he
lavished money and by SAVAK. He spent a quar-
ter of Iran’s income on purchasing the latest
weapons, tanks and planes from the US, though
the US administration and Congress were reluc-
tant to gratify all his wishes. The huge increase in
oil revenues, especially after the price rises of
1973, gave the Shah the dollars with which to
purchase whatever caught his fancy. The West,
meanwhile, was tempted to reduce the imbalance
of trade caused by the high cost of oil by selling all
it could to Iran and the Middle Eastern oil states
- who placed arms high on their shopping lists.
Successive development plans imposed reforms
from above. Land reform deprived absentee land-
lords of most of their land and more than doubled
the number of peasant proprietors of smallhold-
ings. Large agricultural cooperatives were formed,
and tractors and fertilisers used. But, as in the
Soviet Union, it proved exceedingly difficult to
improve agricultural productivity, which contin-
ued to rise more slowly than the increase in popu-
lation. The government official replaced the
landlord as the peasant’s boss. Industrial growth,
from a low base, was more impressive. New factor-
ies, steel mills and assembly plants for motor
vehicles were constructed. Education and health
services also benefited from large investments,
and many Iranian students were sent abroad
to Western universities. The statistics reflect a
remarkable economic development; what they do
not reveal is the unevenness of the distribution of
wealth and the social dislocation that these rapid
changes produced. The gulf between the privi-
leged elites – higher army officers, administrators
and leading merchants – and the masses of urban
poor, farmers and labourers remained huge. In the
northern parts of Teheran, the shops, hotels and
offices catered to the rich and exuded wealth. To
the south lay a different world of slums where
most of the city’s 4.5 million lived in abject con-
ditions. Many peasants had migrated to Teheran
and to other towns, where they turned to the mul-
lahs and the mosques for spiritual guidance and
self-respect. In the countryside the income of
three-quarters of rural families was so low that
malnutrition was widespread. Nor was the small
but growing middle class reconciled to the Shah’s
authoritarian regime. For thousands of students
no worthwhile prospects awaited them on gradu-
ation. All sections of society had reasons to resent
the Shah’s rule. Yet the speedy weakening of his
position, leading to his overthrow in January
1979, came as a surprise.
Despite criticisms of Iran’s violations of the
democratic process and of human rights, the US
still felt that the Shah’s regime was the best guar-
antor of Western interests in the Persian Gulf.
After the British withdrawal as protecting power
of the Gulf sheikhdoms in 1971, the Shah with
his well-equipped army and air force of some
350,000 men came to be seen as the indispens-
able policeman of a potentially turbulent region.
President Jimmy Carter, who entered the White
House in January 1977, shrank from criticising
the regime publicly, despite the prominence he
gave to human rights. In November 1977 when
the Shah visited Washington, with tear gas
wafting around the White House lawn from
protest demonstrations beyond the gate, Carter
fulsomely pledged US support. On his return visit
to Teheran in December he praised the Shah in
a New Year toast. ‘Iran’, he declared:is an island of stability in one of the more trou-
bled areas in the world.... This is a great
tribute to you, Your Majesty, and to your lead-
ership and to the respect, admiration and love
which your people give to you.Carter’s support was to cost him dear when the
Shah’s opponents came to power.464 THE ENDING OF EUROPEAN DOMINANCE IN THE MIDDLE EAST, 1919–80
Iran’s oil output and revenue, 1938–74
Output Revenue
(barrels per day) (US$ millions)1938 203,900 17
1950 635,000 45
1960 1,020,000 285
1970 3,845,000 1,013
1974 6,021,000 18,523