The details (see below in the Notes) involved formation of a One-party state, the Algiers Agreement with Iraq, the military buildup funded by the US, economic disruption, political repression and social changes (the Family Protection Act, annulled in 1979 after the Islamic Revolution when Sharia law was re-introduced).
In 1953, the CIA- and MI6-backed 1953 Iranian coup d'état overthrew Iran’s democratically elected Prime Minister, Mohammad Mossadegh, who had nationalized the country's oil industry to reclaim sovereignty from British control (Wikipedia).
US firms gained control of Iranian Oil production and the CIA helped fund Iran's Secret Police (SAVAK). The US, however, became mired in the Vietnam War and was unable to maintain it's global interests in the Middle East (Nixon Doctrine). At the same time, opposition to Pahlavi Iran brought Ruhollah Khomeini to power as leader of the opposition, where he has remained today as the clerical leader of Iran.
I will decompose these evens more fully in a future post (here) when I look into more detail about how the Iranian economy worked in the Late 20th Century. What I want to emphasize now is that after major shocks and Economic Bubbles created by the US, Iran returned to the BAU attractor path (or at least cycles around it) up to the present.
You can experiment yourself with the IR BAU model (here). There are many questions remaining to be investigated before an understanding can be developed about how the Iranian Economy works. The IR BAU model is unstable in the growth component; how would stabilizing the model have affected Iran's development in the past and in the future? The Iranian system was under weak feedback control, particularly with respect to Globalization, Unemployment and Environmental issues. Would stronger feedback control help in any way or would it have made things worse?
And, as a more general issues, how does our conventional understanding of economic models (exogenously drive technological change, instantly adapting free markets, etc.) make it difficult for us to understand Iran and make informed policy choices? So many questions...
Notes
Iranian Revolution a series of events that culminated in the overthrow of the Pahlavi dynasty in 1979.
Strait of Hormuz a strait between the Persian Gulf and the Gulf of Oman. It provides the only sea passage from the Persian Gulf to the open ocean and is one of the world's most strategically important choke points.
Iran-Contra Affair a political scandal in the United States that centered on arms trafficking to Iran between 1981 and 1986, facilitated by senior officials of the Ronald Reagan administration
Iran Nuclear Program one of the most scrutinized nuclear programs in the world, has sparked intense international concern.
Pahlavi Iran the Iranian state under the rule of the Pahlavi dynasty. The Pahlavi dynasty was created in 1925 and lasted until 1979 when it was ousted as part of the Iranian Revolution, which ended the Iranian monarchy and established the Islamic Republic of Iran.
Iran-Iraq War an armed conflict between Iran and Iraq that lasted from September 1980 to August 1988. Active hostilities began with the Iraqi invasion of Iran and lasted for nearly eight years, until the acceptance of United Nations Security Council Resolution 598 by both sides.
Iranian Economy a mixed, centrally planned economy with a large public sector. It consists of hydrocarbon, agricultural and service sectors, in addition to manufacturing and financial services, with over 40 industries traded on the Tehran Stock Exchange.
- Seven Futures for Iran BAU is the best
- A Deep Dive into the Iranian State Space It's unstable.
- How Does the Iranian Economy Work? Not like a Neoclassical, free-market economy.
- Will US and Israeli Attacks on Iran Hurt the World-System? Yes!
- What was the Impact of the Iranian Revolution? Elimination of Cycles!
