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27. Memorandum From the Vice Chairman of the Policy Planning Council (Morgan) to the President’s Special Assistant for National Security Affairs (Bundy)0


  • Iran

I attach one copy each of two papers on Iran, prepared by the Department’s Bureau of Near Eastern and South Asian Affairs, which Mr. McGhee suggests be discussed at lunch Tuesday, March 28.1

The first of these papers, dated February 11, 1961, is a discussion of the internal situation in Iran, while the second, dated March 20, 1961, addresses itself to the problem of the urban middle class.

I am distributing additional copies of these papers to the persons indicated below.2


Attachment 13


Present Position of the Shah

The elections now being concluded have been a test of the Shah’s ability to control a difficult political situation through his prestige and the utilization of his security forces. The elections were largely rigged, and diverse opposition political forces have not been able to force their cancellation, despite several minor riots in Tehran and a few disturbances in other parts of the nation. There were no deaths in Tehran. The possibility, however, of a combination of circumstances in the future [Page 57]leading a combination of opposition political elements and disaffected members of the security forces toward an attempt to overthrow the regime cannot be discounted, and will probably increase over the long run if present political trends continue.

The Shah has been ruling through the security forces, which have been loyal to him personally, and through an alliance with a part of the traditionalist elements of Iranian society. He would like to enlist the support and enthusiasm of the restive urban middle-class and intellectual classes, but he cannot forget that under Mosadeq they attempted to unseat him, and he realizes the danger that they would raise popular and demagogic emotions against him if they were to be given footholds within the government.

At the present time, communist influence in the main opposition groupings appears to be limited—such influence as exists will probably increase slowly. The communists by themselves pose no direct threat to the regime, and are unlikely to do so in the foreseeable future. Their primary potential lies in the infiltration of opposition groups. This potential is accentuated by the absence of first-class political leadership or a unifying political issue among groups opposed to the present regime.

Opposition Groups and Leaders


The Mosadeqists. The most dynamic and powerful opposition to the regime is represented by the heirs to the Mosadeq political tradition. This group, which is parallel to similar groups in most countries of the non-Western world, consists of the great majority of those urban elements who are caught between a traditional culture which they have rejected and a Western tradition which they cannot wholly accept. They are prone to xenophobia, to demagoguery, and to searching for scapegoats, and are personally frustrated and unhappy. Most of them dislike the British, the Russians, the traditional Iranian elite, and are increasingly distrustful of the United States. They tend to believe that the present regime is hopelessly inefficient and corrupt, that it is dominated by the military and security chiefs, and that it serves the interests of the West rather than the interests of the nation. Their influence over the urban masses is great, and is expanding with the spread of literacy, modern communications, and those economic and cultural processes which weaken the traditional culture.

The primary political manifestation of this group is the National Front and a smaller companion body known as the National Resistance Movement. A very recent and burgeoning element in these organizations arises from college and secondary school students. The established, though loosely organized, leadership of these movements consists of moderate-minded colleagues of Mosadeq, exemplified by Alayar Saleh and Karim Sanjabi, Ministers under Mosadeq. These men [Page 58]are still in part the heirs of the old Iranian constitutionalist movement, believing in the forms of democracy and fearing the communists as much as they fear “imperialism”. They tend to be idealistic and impractical. They have great popular respect and prestige in the larger cities of Iran. The draft platform of the Front is neutralist, democratic, and socialist. They are not opposed to the institution of the monarchy.

There are increasing indications that these older leaders are losing their former tight control over the loyalties of their followers, and that younger, more radical, and more demagogic leaders are emerging, particularly in the new student movement, who regard the moderate leadership of the Front as ineffective, timid, and old. These newer leadership elements are much more prone to violent action, are more anti-United States, and are relatively vulnerable to communist penetration. They are encouraged and agitated by a powerful all-wave Soviet radio propaganda barrage which identifies the Shah with the United States, with militarism, and with corruption, and which urges the overthrow of his regime by violence.


Rightist Opposition. While the Shah has found it easier to deal with the traditional elements of society than with the emergent urban groups, and while most landlords, many tribal leaders, senior bureaucrats, and large merchants are relatively content with the regime, the Shah does face serious rightist and reactionary opposition from the vested traditional elements which governed Iran before the advent of Reza Shah and during the 1941–1951 era. They consider the Shah to be a blundering upstart and would like to shove him aside in favor of the traditional ruling group. This group is concentrated among the feudal landlords, the religious leaders, and some discontented tribal leaders. Their power is in rural areas, religious cities such as Qom, and among the more ignorant elements in the provincial urban centers. They lack good leadership and do not pose a serious threat to the regime, since they fear the Mosadeqists more than they fear the Shah. One group of dissident tribal leaders is inclined to Mosadeqists.

There are two small but more positive rightist opposition groups. One consists of some very xenophobic religious leaders in the cities who once cooperated with Mosadeq but who split with him later, and who tend to cooperate now with Amini or Baqai (see below). These religious fanatics are given to assassination as a means of political expression. Ali Amini leads a very loose group, recently penetrated and weakened by the Shah, which has looked forward to a union between moderate Mosadeqists and moderate conservatives under a Shah with reduced powers (the Shah is now the dictator of Iran for all practical purposes). Amini has considerable prestige among conservatives, including some high-ranking officers of the security forces.

The Guardians of Freedom. A third opposition element, much less important than the other two, is a tightly-knit but small urban group, mostly from the workers and extreme lower classes, held together by the personal magnetism and ability of Mazafer Baqai, who is probably the best practical political tactician in Iran, with a proven unlimited capacity for demagoguery. Baqai has some fascist tendencies, and has connections with like-minded Army colonels. He broke with Mosadeq, and is hence anathema to the more moderate followers of the National Front, but his political acumen makes him attractive to the students and other younger groups. He has a bad personal reputation, and is a seeker after power, pure and simple, with no political principles whatsoever. He respects but fears the communists.

Pro-Westernism and Neutralism

The Shah and his supporters, both military and civilian, are strongly pro-Western at present. The majority of the Mosadeqists hate the United Kingdom but are still not overtly hostile toward the United States and Germany. This group resents Iran’s openly pro-Western foreign policy and military alignment, however, and there is a growing tendency, particularly among the younger and more radical elements, to identify the United States with the Shah and with the security forces and to hold the United States responsible for the Shah’s misdeeds and mistakes, real and alleged. The general tendency of opinion among these groups is neutralist along “Indian” lines, with a strong admixture of the traditional Iranian distrust and fear of Russia. Leaders of the traditional elite are divided between a minority favoring formal Iranian alignment with the West and a majority favoring the traditional Iranian policy of playing off big powers against each other and avoiding commitments to any large power, while extracting the maximum in aid from all sides.

Iran’s formal alignment with the West is popularly regarded as the Shah’s personal venture, and he is judged by its consequences.

Rural Problems

Many peasants automatically follow their landlords in all political matters, particularly if the landlord is by long tradition accepted or admired by his peasants. Aside from this, the political attitude of most peasants is favorable to the Shah, whom they regard with an unconscious and semi-religious veneration. If they disapprove, and they often do, of the actions of specific government officials, they tend to ascribe such actions to the existence of “bad people” around the Shah, and feel that if he only knew the facts, he would change the situation to the peasants’ benefit. By virtue of this blind rural following, the Shah probably could win three-fourths or more of the votes in Iran in an absolutely fair plebiscite. Unfortunately, the peasantry has no tradition of political action and no knowledge of or interest in current broad political problems. [Page 60]It is the object, not the subject, of political activity, and can be expected to accept with fatalistic submission the decisions emanating from Tehran.

The regime has sponsored and supported legislation toward community development activities, toward the gradual breakup of large landed estates, and toward the sale of government land to the cultivators. The Shah has for years been distributing his own large estates to the cultivators. Progress in land distribution is slow, primarily because distribution cannot be effected without serious reductions in production until adequate resources are available for the high capitalization and maintenance costs inherent in most Iranian agriculture which requires extensive credit, technical, and cooperative facilities. New regulations, based on the 1960 Land Distribution Act, for landlord-tenant relationships are now in process. In general, the Iranian Government acts on the premise that the maintenance of production takes precedence over politico-social advantages, although it recognizes the latter factor. A rapidly improving agricultural education and extension service is in operation. The next development plan, to cost a billion dollars (a portion of which is expected to come from foreign sources) and to operate from 1963 to 1968, lays heavy emphasis on agricultural improvement, as against the current plan’s emphasis on infrastructure and industry.

Mechanization, improved communications, and basic social forces, including population increase, are throwing increasing numbers of the peasantry into the cities as laborers. These migrants tend to lose their traditional political and social inertia after a few years, and come to some extent under the influence of urban opposition elements.

The Security Forces

The security forces of Iran, including the Army, are relatively non-institutionalized. Peasant conscripts do as they are told, and in the officer class can be seen a spectrum of the elements and forces of contemporary urban society, with an admixture of (a) personal loyalty to the Shah in the sense that an American ward heeler is loyal to a political boss, and (b) a small but growing professionalism concentrating on the techniques of the military.

The Army exists in part, as it did under the Shah’s father, as a tool of personal power for the ruler. The Shah devotes an inordinate amount of his time and energy to military matters, and is almost obsessed with increasing its size and obtaining the most modern military equipment. The fulfillment of these ambitions was probably the primary purpose which he had in mind when he formally aligned Iran with the West. With the physical power of the Army solidly behind him, the Shah could probably remain in power indefinitely, playing his traditionalist and Mosadeqist enemies off against one another. The Shah very cleverly plays off individuals and groups in the military against one another in [Page 61]order to prevent the rise of key personalities who could possibly take the machine away from him.

The loyalty of the security forces remains doubtful, however. The Chief of Army Intelligence in 1958 was caught at plotting with moderate conservative opposition leaders and has just emerged from jail. Several key conservative generals have in the past approached the United States and the United Kingdom for help in plots to overthrow the Shah with some civilian help. It is probable that “nationalist” sentiment of the Mosadeq type is widespread and is increasing among that majority of junior officers who have urban middle class backgrounds. There is, however, no single key military figure and no philosophy of government peculiar to the military which could be posed as an alternative to the present Shah-Army key ruling element. A purely military and conservative successor regime would have little hope for a long life, since the military as it exists is disliked and distrusted by opposition elements even more than is the Shah.

Underlying Factors

Under the Shah, Iran has made considerable progress in economic development, in social welfare, and in internal security and administrative efficiency. This progress has, however, taken place without participation in the government by the main opposition groups. To some extent, the Shah’s isolation from these groups has been due to his unwillingness to ride demagogic issues appealing to the lower popular passions—he could even now, for instance, rally popular support behind himself by launching a self-defeating demagogic campaign against the Oil Consortium, against minority racial and religious groups, or against Iraq or the United Kingdom on territorial issues. To an equal extent, however, it has been due to his unwillingness to listen to critical advice, to his unwillingness to share power, and to his near-obsession with military affairs.

With the confidence and support of the Mosadeqists, the Shah could easily control his rightist opposition. The converse, however, is not true. The force and power of the urban semi-Westernized elements continue to grow at the expense of other elements of society. Unless and until the Shah can come to terms with them and bring them, or part of them, into the process of policy making, he faces a remorseless and slowly increasing pressure, which will become sharper and more dangerous to the West as moderate leadership elements are displaced by the radicals. It seems unlikely, however, that the Shah can capture the loyalty of this element without abandoning the military as his internal political base, without giving up much of his power, without abandoning his openly pro-Western foreign alignment, and without taking steps [Page 62]inimical to internal security and to practical economic development. He is unlikely to be willing to pay such a price.

Another very important element is the Shah’s alternative with regard to foreign policy. The Shah, though highly intelligent, is emotionally insecure, and shares with other Iranians a deep suspicion that the West may abandon him in the course of détente with the USSR or by supporting his internal opposition. The recent change of administration in Washington has heightened his anxieties. He is bitterly disappointed with the quantity of United States military aid in terms of money and hardware;4 he is only slightly less unhappy about the quantity and procedures of United States economic aid to Iran in the context of a current difficult and unpopular economic stabilization program, undertaken last year at IMF insistence, and he suspects that the United States is cooling toward CENTO and hence toward its military assistance plans for the CENTO regional allies. He is under strong Soviet propaganda attack, and the Soviets have made it clear to him that if he will move toward neutralism, he can escape this pressure and can expect economic and even some military assistance from the USSR as well as assistance from the United States, citing Afghanistan and India.

The Shah is capable of making such a switch—one of our Ambassador’s main tasks has been to dissuade him, to soothe him, and to reassure him of United States support. Even so, the Shah has authorized his Prime Minister to go to Moscow on a “good-will” visit in March or April, though he continues to resist Soviet demands for political concessions.

Two other factors of the internal political situation often mentioned as important are corruption and the suppression of civil liberties. The former has always been a feature of Iranian administrations, and, though the Shah himself is honest, many of his family and entourage are not. Such dishonesty is not a major factor in the economic situation, and is probably decreasing slowly. It is normal for any political attack in Iran to be accompanied by charges of corruption.

There is a limited press censorship in Iran, and arrests and temporary deportations are rather common measures to avert political disorders. Freedom of assembly is often limited, but there is great freedom of speech. Iran is far from being a “police state” in the ordinary sense of the word.

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What Can the United States Do?

It is often suggested that the United States, using its aid programs as leverage, could issue orders to the Shah which would by their implementation result in political tranquillity. It has been suggested that some of these “reform” measures would be the ending of corruption, the establishment of genuine democratic institutions, the downgrading of the military, further land reform, and the sharing of power with Mosadeqist leaders.

These suggestions presuppose that the Shah is a creature of the United States and the United Kingdom, a common misconception in Iran. Any United States ultimatums or even heavy-handed hints would be regarded by the Shah as an intolerable interference in his affairs and would probably result in corresponding moves on his part toward the USSR and neutralism.

Granted that this difficulty could be overcome, it is evident that the suggested “reform” measures are not simple matters. Corruption in our sense is a part of the Iranian culture, often associated with family ties, and the Shah relies on traditional elements of society in his government. Civil servants will probably continue to accept bribes unless they are able to afford a European standard of living on their salaries alone. This would entail an unacceptable gap in living standards between them and the mass of the population. Free elections to the Parliament today would result in a Majlis controlled by reactionary landlords and the clergy, with a vociferous and demagogic Mosadeqist minority from the big cities. Iranian politics would be polarized to the point of civil war. The restriction of suffrage to literates would result in a Mosadeqist majority, but there is no indication that a Mosadeqist government, representing perhaps fifteen percent of the population, would represent the submerged rural masses even as well as the present government does. In any case, this kind of freedom would be tantamount to asking the Shah to abdicate, and would entail a foreign policy shift away from the United States.

To ask the Shah to de-emphasize the military element in the Iranian Government would be to attack his most sensitive personal quirk, and would completely dishearten him. He would have to deprive himself of a highly practical element of his personal power, as well as to abandon the military dreams so dear to him.

Hasty and sweeping land reforms without careful preparation and heavy expenses would disrupt rural society, turn most landlords into bitter personal enemies of the Shah, result in immediate hardship to the peasants, retard mechanization and soil conservation, and decrease agricultural production. Urban opposition groups would be pleased, not [Page 64]because of any solicitude for the peasantry, but because of the discomfiture of the landlords.

The admission of Mosadeqist leaders to the government, while the most promising of the suggested reforms, would mean a reduction of the Shah’s powers, an eventual reduction of the role of the military, and a danger of cutting the moderate Mosadeqists off from their followings. The Shah would regard such a suggestion as proof positive that the United States had turned against him.

Another broad and basic suggestion for United States policy would be to increase its support of the Shah. To satisfy His Majesty, this would have to involve very heavy expenses in military, as well as financial assistance, would identify the United States even more with the Shah’s authoritarian regime, and would accentuate rather than solve the basic political dilemma.

Still another suggestion involves United States and United Kingdom support to a conservative military group, perhaps with ties to the moderate Amini conservatives, to take over power by a coup. The resulting successor regime, without charismatic and practical leadership not in sight today, would have all the Shah’s problems without the tremendous stabilizing force represented by the monarchical institution, and would solve nothing.

The most forthright and extreme suggestion involves Western support to a hypothetical Mosadeqist-oriented coup, with support from junior officers. While the resulting regime would not be strongly anti-United States and would have popular urban support, it would entail the following probable awesome disadvantages, which would accrue at an early date should such a regime remain in power:

The breakup of CENTO,
The withdrawal of the United States military mission from Iran,
The abandonment of the current economic stabilization program,
Undetermined moves to extract more money from the Oil Consortium,
A great blow to the global prestige of the United States,
Opportunity for communist infiltration into the regime,
The loss of Iran’s friendly United Nations vote,
Neutralism as a positive policy, probably midway between the Nehru and Kassem models,
The acceptance of Soviet economic, and possibly of military, aid.

These probable short-range costs would have to be balanced against the long-range advantages of a more popularly based regime in Iran. The cost does not appear to be worth the advantages, but a proper appreciation of the choice could only be made in the light of global national security considerations.

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It would appear preferable that the United States would be best advised to continue its present policy of reassurance to the Shah of United States sympathy and support, along with persistent but delicate inferences by our Ambassador to the effect that the Shah should devote his attention to his internal political problems rather than to foreign and military affairs. We would also continue our policy of monitoring the Shah’s dealings with the USSR, pointing out Soviet traps, depreciating the effect of Soviet propaganda, and warning him of Soviet intentions. We should continue to provide him with reasonable economic and military assistance, and, in the context of more general changes in our mutual security mechanisms, reduce the delays and contradictions in our assistance programs which tend to irritate and demoralize him.

The implementation of this program will require, as it has in the past, the greatest possible delicacy on the part of our Ambassador in handling his personal relationship with the Shah.

We should, of course, continue to be on the alert for the rise of competent and creative alternate leadership, in or out of the military, which might allow a reconsideration of our alternatives. This latter, along with the requirement that we do what we can to support moderate as against extreme opposition leadership, is very difficult in Iran, since Embassy contacts with the important Mosadeqist opposition elements have met and will continue to meet with violent objections from the Shah. [less than 1 line of source text not declassified] has done, and will continue to do, whatever it can along this line, but all such contacts run a risk of alienating the Shah.

At the present moment, we could hearten the Shah and reduce the possibility of his dealing with the Soviets by

Making an immediate decision as to Defense Support for Iran in FY 1962, preferably in the scheduled amount of $20 million,
Informing the Shah now of this figure so that he can count on it in his upcoming annual budget, which begins March 21, 1961, and
Modifying procedures and regulations in order that the sum can be made available by this fall, halfway through the Iranian budget year.

It might be noted that the JCS has recently indicated that it desires to “assist” the Shah by United States adherence to CENTO, stationing atomic weapons in Iran, and similar measures. Unless such strengthening of CENTO were accompanied by greatly increased military assistance to Iran, it would be of only temporary effect, or even counterproductive, as regards preserving the Shah’s pro-Western orientation, and it would not affect the internal political situation to the advantage of United States interests and objectives.

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Attachment 25



A meaningful definition of the Iranian urban middle class must be sociological and historical, not primarily economic. The urban middle class constitutes that element of Iranian society in which there are present two cultures, two value systems, the traditional and the Western. Those elements of society in which the traditional value systems are overwhelmingly predominant are excluded, i.e., the peasantry, both in the countryside and recently arrived in the large cities, most landlords, older religious leaders, and the great majority of small merchants and artisans outside the capital. Similarly excluded is the very small minority of thoroughly Westernized individuals, in high levels of society, who are really strangers in their own society.

The political middle class must be identified with the process of cultural clash. We may for the purposes of this paper attempt a rough breakdown of the urban middle class as follows:


The upper middle class.

Its mark is primarily money. It includes industrialists, contractors, richer merchants who have shed the limits of the bazaar mentality, senior officials and professors, and other top professional types. Iranian society is and always has been relatively mobile, and this class includes individuals who have risen from below and others who have dropped down into it from the traditional elite.


The middle middle class.

It is typified by junior civil servants, bazaar merchants, students, engineers, teachers, and journalists, who are products of the local universities and secondary schools.


The lower middle class.

It is typified by clerks, skilled workers, taxi drivers, and that portion of the urban proletariat which has been cut adrift by long city residence from the thought patterns of the traditional society. It appears to be extending itself downward with the erosion of the traditional structure of society. There is a small increment of individuals who drop into it from the middle middle class. It is literate but otherwise poorly educated.

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The key to the entire class lies in the middle group. Most of the upper group is “in” at the present time; is economically satisfied, feels itself participating in and adjusted to the status quo to some extent, and, while ready to support any stable regime which would not disturb its position, is at least passively content with things as they are. From this relatively sophisticated group, however, particularly among the younger elements with foreign educations, is drawn much of the political leadership for which the key middle group is crying. The lower middle class is restive and dissatisfied, and by virtue of its numbers will form the mass of effective street demonstrations, but depends on the groups above it to provide the political and social channels for the expression of its discontent. The comments below will be concentrated on the key middle group.

Psychological Characteristics

It is well known that individuals the world over tend to rationalize political behavior which stems from deep emotional needs. This is particularly true with regard to extremist views aimed at radical changes in an existing society. To take at face value the rationalizations of an Iranian middle class leader is as unrewarding as to accept the rationalizations of anti-Semites, Negro-haters, or communists in the United States. Some understanding of the psychological background of such individuals is necessary in order to be able to understand them and to predict their behavior.

The political reactions of the key elements of the Iranian middle class find their psychological roots in the fact that these people are partly Westernized and partly attached to their traditional culture. The result is an inability to adjust to society, and an inability to find security. Thus, if a student tries to “date” a girl, and to choose his own wife, one side of his “super-ego” tells him that he is behaving atrociously; if he asks his parents to find him a wife and does not expect to become acquainted with her until after the marriage, the other side says he is behaving atrociously. He is continually frustrated, unhappy, and unable to achieve adjustment to, and security within, his society.

At the same time, he is oppressed by feelings of inferiority. He has lost the deft understanding which enables one to fit into the traditional society in its small middle niches; he is unable to sense the nuances which allow for security through sycophancy, flattery, and the manipulation of chains of influence. He is likewise, with only a few exceptions, quite incompetent by Western standards. There is enough of the traditional culture in him that he is not able to work for the sake of the results, and to view a task as separate from considerations of personal prestige and status.

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He is not willing to accept now the old idea of status, self-fulfillment, and success resting upon traditional values, nor can he adjust to the ideally Western concept of rewarding an individual strictly according to how he performs. Too often, he tends to accept the basic idea of rewards based on membership in an autocratic group, but wishes to substitute for the badges of the traditional autocracy what he conceives as the badge of Western autocracy—“educational qualifications”. He feels, understandably enough, that he should, by virtue of formal educational qualifications, be allowed to attain the security and status of an informal autocracy. The traditionalist element of society refuses to recognize this claim, holding rather that “qualifications” are based on traditional values; the Westerner laughs at him and tells him that performance, continual performance against competition, is the only standard by which status can be achieved.

Our typical member of the urban middle class now becomes desperate. He becomes anxious and then angry. He cannot, as a normal human being, admit of his inadequacy to meet either system, much less the confused mixture of both which confronts him. He suspects that he is being persecuted and plotted against, and develops aggressive desires for revenge against “the system”.

These desires are channelled, naturally, against both of the structures which form the underpinnings of his society. He applies Western standards against the traditional element of his society, and finds it wanting. He applies traditional standards in a critique of the Western element in his society, and naturally finds it wanting, too. It is a short step from these judgments to an uncritical aggressive desire for revenge, and for a final justification of himself by punishing and humiliating the two figures who seemingly mock at his plight, the self-assured member of the traditional upper class and the self-assured Westerner.

Good and Evil

There are certain key concepts of the world which are born and bred into Iranians which unfortunately tend to sharpen the terrible psychological dilemma outlined above. They are rooted in Iranian history, and can be traced back to Zoroastrianism and picked up again in the Iranian interpretation of Shi’a Islam.

Persians tend to believe in the all-pervasive presence of a powerful force of evil in the world. All actions, all motives, are divisible into good and evil. It is probable at any time in history that the forces of evil control the world, while the good man, like the hidden Imam, is forced to hide and remain inconspicuous, to lie and pretend if need be, until the moment arrives for battle. Thus, most Persians cannot ascribe political actions with which they disagree to error, or to grant good intentions to the [Page 69]author of such actions. The term “political compromise” cannot be translated into colloquial Persian without a connotation of “sell-out”.

Two results follow from this—first, since the forces of evil are strong and organized, actions by others which one disapproves are not isolated, they are linked together in a mesh of intertwining conspiracies with an overall evil motive behind them. Second, public and private morality are inextricably confused—no politician with a reprehensible private life can be other than evil in his public actions, and no saintly man can be really wrong in his public life.

As a corollary of the above, Persians tend to follow blindly a man who has convinced them that he is on the side of right, without examining political issues critically. Since members of the urban middle class have deep aggressive drives against the traditional ruling class and the Westerner, it is natural to associate a saintly leader with opposition to these two forces. All the ingredients are present for what we would call demagogic politics directed against them as scapegoats and as evil forces.


Persians, and especially the urban middle class, have, from historical experience and from their own peculiarities, evolved an amazing political mythology whereby almost all political developments are viewed in terms of foreign influence, usually selfish and malignant. Most such influence has been ascribed to the Russians and the British; practically every national leader was in the past characterized as “pro-British” or “pro-Russian”. Since German and U.S. power was far away and supposedly disinterested, members of the urban middle class for a long time tended to describe themselves as “pro-German” or “pro-American”. Nowadays, with the U.S. obviously in the Shah’s graces, the term “pro-American” is taking on the evil overtone which “pro-British” has had; the Germans are out of the picture.

There is a deep residue of hatred and distrust of Russia in Iran, but communism has its attractions. This attraction for the urban middle class is based primarily on (a) the communist opposition to the existing scheme of things, and (b) a hope that communism really means that the “educationally qualified” urban middle class displaces the traditional autocracy and thereafter enjoys status, security, and justification. However, even the most angry and frustrated Persian tends to draw back in alarm when he suspects that a Russian lurks behind the fair mask of communism.


Let us set aside immediately the common conception that the urban middle class is primarily concerned with national economic development. [Page 70]Nothing interests it less. It would like an aristocratic standard of living, but it channels this desire primarily through the idea of stepping into the seats of the traditional ruling class and the high-living Westerners resident in Iran. It has repeatedly shown its almost total lack of concern for the peasantry and even for the urban proletariat, except insofar as it can turn these groups against the traditional ruling class and the West. It is noteworthy that the consumption levels of the urban middle class have been rising sharply over the past eight years, while its political discontent has been rising even more sharply.

Members of the class, with Western tastes whetted by an addiction to movie-going, often bemoan the absence of “a decent standard of living” for themselves. This “decent standard” is measured in Western terms. Its provision, in a society still desperately poor, would obviously result in a profound increase in the gap between the educated and the uneducated, and therefore of “social injustice”.

This class has, over the past ten years, shown itself to be ready at any time to put almost all other factors ahead of economic development for the nation. They have opposed infrastructure development and have instead demanded relatively non-productive amenities such as hospitals, colleges, asphalt streets, and urban water and sewage systems. They have been particularly opposed to any development involving foreign contractors or suppliers, which they feel is by definition somewhat nefarious.

It is important to note, however, that an expanding economy and a high rate of investment, particularly in the private sector, provide (a) attractive outlets for the energies of the more intelligent and better-educated members of the class, and (b) obviate the dangers of mass urban unemployment. They do not effectively modify political and psychological attitudes, but they dilute the readiness of the urban population to take drastic action along the lines indicated by these attitudes.

Political Aspirations

Most members of the class look back on the Mosadeq era with undisguised nostalgia. We are thus not operating in a vacuum when we attempt to determine the results of a political change or changes in which power would come into the hands of this group.

In 1957, one urban middle class group indicated in a public manifesto that it was willing to live with CENTO and with the Consortium Agreement. We must note, however, that the leader of this particular group is probably the most moderate of all potential leaders of the class, and that he and his followers admitted openly that the promise represented the stiff price which they are willing to pay for American “support” in a bid for power. In practice, it seems highly unlikely that any leader would be able to hold to such a position for long. His rivals would [Page 71]make life intolerable for him by accusing him of being a stooge of the West. It is almost a certainty that any government responsive to the urban middle class would as a minimum be forced to withdraw from CENTO and initiate some kind of squeeze on the Consortium, at least to the extent that it could prove to its followers that it was hostile to Western interests. Similarly, in the international arena, such a government would be forced to display its opposition to Western interests in the Arab world, the Congo, the Far East, and other trouble spots, and to extend sympathy to urban middle class leaders in those areas who are now opposing the West.

It is highly probable that, as another minimum, the U.S. military mission to Iran would be invited to leave. The Army is highly unpopular with the urban middle class, and to retain any position whatever in society, the Army itself would have to acquiesce in good grace.

The urban middle class has historically had no interest in or knowledge of financial realities. The degree of financial stability which has been maintained recently would almost certainly go overboard. One cannot imagine school teachers agreeing to postpone wage demands, for example, in view of esoteric and complicated financial factors, nor a government responsive to the urban middle class refusing to embark on a highly desirable hospital-building program because there was not enough money in the kitty. After all, as in the Mosadeq era, the printing press is always available.

Democracy in the Western sense means nothing to the urban middle class. It is probable that the oft-proposed measure to disenfranchise the illiterate classes would be brought up again and adopted, if there were any desire to utilize a freely-elected assembly.

The urban middle class complains bitterly about corruption in the government, but shows little interest in reducing corruption at low levels. Rather, it sympathizes with low-level officials in trouble for this reason, and insists that nothing can be done to remedy the basic problem until high-level corruption, involving the traditional upper class and foreigners, is eliminated. Almost all members of the upper class and most foreigners are believed to be guilty of corruption, unless they are openly sympathetic to the Mosadeqist groups. It seems quite likely that this middle class concern over corruption is actually a rationalization of its deeper emotional antipathies, and its justification in terms of the actual situation is coincidental.

The traditional upper classes, and the upper strata of the upper middle class as well, would probably be victimized in one way or another, ranging from confiscatory taxation to hanging. These policies would naturally quickly dry up the sources of capital formation for the private sector of the economy. Economic enterprise would turn toward the statist road, primarily because it is in the bureaucracy that the urban [Page 72]middle class is closest to having a vehicle through which it can institutionalize status and security for itself.

Political Realities

The aspirations described above do not constitute a prediction of the future. They represent the existing political raw material provided by the urban middle class. When one considers that they are inchoate, contradictory, and emotional in essence, it is obvious that they will be shaped by leadership. They cannot be disregarded. They are growing and spreading every day at an accelerating rate, upward into the younger sons of the aristocracy and downward into the proletariat, pushed by increasing urbanization. Their spread can only be stopped by stopping the process of culture clash, and that is impossible in the world of today.

There is no discernible competent leadership in the urban middle class at present. Should its incompetent leadership of today be catapulted into power, it is likely that a process of confused demagoguery would ensue, which would result in uncoordinated moves in the direction of the various negative aspirations listed above and increase potential for the communists, who obviously by virtue of their program and organization, would have a good chance of eventually filling the vacuum if they have learned to stop bowing publicly in the direction of the hated Russians.

The Iranian military does not offer potential leadership which could deal with these aspirations and satisfy them. Most junior officers share the prejudices of the middle class families from which they sprang; senior officers are roundly hated as members of the traditional aristocracy.

Traditional leaders—clergy, landlords, and the really big merchants—offer little hope of providing competent leadership, and are blind to the threat which the urban middle class represents. It might conceivably still be possible to “bypass” the urban middle class by providing a dynamic to the inert traditional-minded peasantry and proletariat, perhaps based on a regeneration of Shi’a Islam with new values adjustable to semi-Western values and to modern techniques of production and organization. But there is no sign of the gigantic creativity which would be necessary for such a reversal of the current historical trend.

There is one potential leader who has the necessary ability, personality, and talent, and whose political capital is not yet quite exhausted. That is the Shah himself. The Shah would still be capable, if he could only see the truth, of taking steps like the following which might allow him to seize and mold middle class aspirations.

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Channelling current resentments against Ministers rather than against himself.
Dumping his family, or most of it, in Europe.
Abstaining from state visits abroad and discouraging state visits to Iran.
Reducing his military forces gradually to a small, tough force of infantry and artillery capable of internal security and guerrilla activities.
Removing gradually most U.S. advisers from the Iranian Government except those few engaged in health, education, and welfare work in the field.
Publicly excoriating the traditional ruling class for a lack of social responsibility.
Withdrawing from his openly pro-Western international posture with as little damage as possible to Free World morale and to his own prestige.
Ostentatiously reducing his personal standard of living, and the pomp and panoply of his life.
Proceeding loudly with at least a token land distribution program against the big landlords.
Making menacing gestures against the Oil Consortium and “extracting” concessions from it, in such a way as to make it appear that the Consortium was reluctantly bowing to his power and determination.
Making public scapegoats of scores of “corrupt” high officials, whether or not the “corruption” could be proved.
Appointing respected moderate Mosadeqists to positions such as those of Minister of Finance and Head of the Plan Organization, where they could assume responsibilities without being able to reverse policy.
Making public all details of the operations of the Pahlavi Foundation, and appointing as its supervisors a few moderate Mosadeqists.
Employing his personality to make constant personal contact with the members of the middle class.

The foregoing items are not intended to be a comprehensive program of action for the Shah. They are rather examples of actions which would have a positive effect on relations between the Shah and the class under discussion, and as indications of the types of action and gesture by the Shah to which the class would respond. Many of them would be demagogic in nature and would be hard for the West to swallow. But it is still possible that the Shah could turn the trick. He has the brains, the personality, and the cunning to do it.

United States Policy

Elements of U.S. policy which are presently open and which would serve to protect U.S. interests against the dangers represented by the rise of the urban middle class in Iran are as follows:

Inducing the Shah to turn his political talents and his attention, as a matter of priority over military and foreign affairs, to the broad task of winning the confidence of the urban middle class by providing them with a sense of participation in, and identification with, his regime.
Providing economic assistance to Iran sufficient to prevent economic and financial collapse, maintain a high rate of economic growth in both the public and private sectors, and provide for the continuing provision of a reasonable amount of relatively non-productive urban amenities.
Watching political developments carefully with a view to the identification and analysis of effective and responsible alternative political leaders who might, as a last resort, be available to replace the Shah should he fail completely as a political leader.

  1. Source: Kennedy Library, National Security Files, Country Series, Iran, 3/21/61– 3/31/61. Secret.
  2. No record of the meeting has been found.
  3. William Bundy in DOD/ISA and Robert Amory and Richard Bissell in CIA.
  4. Secret. Drafted by Bowling (NEA/GTI). The date “2/11/61” is handwritten at the top of the source text.
  5. In FY 1961 total MAP aid to Iran amounted to about $75 million, plus about $19 million in Defense Support. From the overthrow of Mossadeq in 1953 to the present, United States military aid of about $450 million and United States economic aid (including Defense Support) of about $567 million has been extended to Iran. [Footnote in the source text.]
  6. Confidential. Drafted by Bowling on March 20.