Penny-Wise, Pound-Foolish: The Iranian Coup of 1953

Cold War tactics are making a comeback. According to Professor Hal Brands, the 21st century could see the United States return to covert regime change operations in the former Third World.

Brands is equivocal in his treatment of the U.S. record during the Cold War, when it chose to “fight dirty” by supporting dictators in Asia, Latin America, Africa, and the Middle East. But he argues that covert regime change “can sometimes be a cost-effective tool.” He cites one of the Cold War’s most famous episodes: the Iran coup of 1953.  “For the cost of a few hired mobs,” writes Brands, Operation TPAJAX established Iran’s pro-U.S. strategic alignment “for 25 years.” Though he admits that the regime of Iran’s shah, Mohammed Reza Pahlavi, proved unsustainable, Brands disagrees with scholars like Piero Gleijeses who have argued that a desire to control resources motivated U.S. interventions. In Brands’ view, the United States toppled governments out of strategic necessity. “Without covert action,” he writes, “America might not have won the Cold War.”

I have explored the decision behind the 1953 coup in depth elsewhere. Here, I will argue that the coup did not serve long-term U.S. interests. It was ostensibly meant to stop a communist uprising, but recent research has concluded that the threat of communism in Iran was exaggerated. An early failure convinced U.S. coup planners to define the coup as a “popular uprising” in favor of the shah, a figure few American policymakers believed strong enough to lead Iran, who then used the operation to erect an unsteady authoritarian dictatorship. By undertaking the coup, the United States limited its policy options and made further political instability in Iran more rather than less likely.

Oil and Mosaddeq

To understand the coup, it is first necessary to understand its target, nationalist Prime Minister Mohammed Mosaddeq. Mosaddeq was an Iranian politician and an aristocrat with ties to some of Iran’s oldest landed families. Throughout his long political career, Mosaddeq opposed autocratic government and championed Iran’s 1906 Constitution, which laid out a parliamentary government where the shah was to “reign, not rule.” He developed a large following among Iran’s modernizing middle class and became prime minister in 1951, when he nationalized Iran’s British-owned oil industry. His platform rested on the idea of “negative equilibrium” — rather than siding with a great power, Iran would maintain its neutrality, resisting both U.S. and Soviet influence, while managing its own oil industry without depending on Western corporations. As prime minister he subordinated the shah and the military to his control. He was anti-communist and never sought or received assistance from Moscow.

The oil nationalization crisis provoked a U.K. oil embargo on Iran’s oil exports and years of economic pressure from international oil companies that hoped to reverse Iran’s nationalization. Conscious of preserving the Cold War alliance with the United Kingdom, the United States hoped Mosaddeq would agree to an oil settlement that preserved Iran’s economic stability while serving the interests of the United Kingdom and major U.S. oil companies. In early 1953, after yet another failed round of oil negotiations, the United States concluded that Mosaddeq had to be removed from office. The operation, code-named TPAJAX, entered planning stages in spring 1953.

While subsequent accounts emphasized the threat of communism, the possibility of an uprising from Iran’s communist Tudeh Party appeared to be minimal, according to contemporary intelligence analyses. The group, which received money and support from Moscow, had about 10,000 members. While it was well-organized and capable of large street demonstrations, the Tudeh had not sufficiently infiltrated the military, nor did it have sway over the parliament or the government ministries. An estimate written on Aug. 17, 1953, by analysts with no knowledge of TPAJAX concluded that the Tudeh “is not yet ready to seize control.” Research into Soviet archives indicates that Moscow was wary of Mosaddeq and regarded him as pro-U.S. and “bourgeois.” Mosaddeq himself continued to believe the United States would grant his government financial aid, and his ambassador to the United States, Allahyar Saleh, pressed the Eisenhower administration for help in August 1953, just days before the coup. While many of his former supporters among Iran’s Shi’a clergy and upper class abandoned him in 1952, Mosaddeq avoided close connection to Iran’s communists, though he occasionally relied on their assistance against his right-wing opponents.

Mosaddeq’s alleged association with communists was amplified by the coup’s planners. In the months before the August coup, the CIA distributed “black propaganda” pointing to the prime minister’s communist sympathies in order to discredit him in the eyes of the Iranian public. President Dwight Eisenhower made a public statement drafted by CIA Director Allen Dulles implying communist influence in Iran had risen to dangerous levels.

Rather than meeting an imminent threat, the coup was a preventive maneuver. A handful of officials, including Dulles, exaggerated the Tudeh threat, dismissing intelligence that denied Tudeh capabilities. Preventing Iran’s “collapse,” vaguely defined but presumed to be certain should Iran remain “oil-less” because of the U.K. embargo, motivated the coup decision. A new Iranian government, it was hoped, would agree to an oil settlement that would meet the needs of international oil companies and stabilize Iran’s economy. Fear of communism was certainly present, but the Tudeh threat was insufficient to warrant a coup operation — action that had little precedent in U.S. policy in the Middle East at that time.

‘Quasi-Legal Means’

One of the challenges associated with planning TPAJAX was determining who would lead the post-coup government. Dulles’ adviser Max Thornburg suggested the United States should put the shah in power as an authoritarian dictator, supporting his regime with aid “so that it can make an oil agreement.” The State Department rejected the idea. The shah was viewed as indecisive and weak-willed. During one planning session, the ambassador in Tehran suggested the shah could be replaced by one of his brothers. Instead, Fazlollah Zahedi, the former general who was hand-picked by the British and U.S. governments to replace Mosaddeq, would seize power through military means. Once in office, he would offer social and economic reforms in order to remain in power, drawing on U.S. aid and completing an oil agreement with major oil companies. According to the coup account by CIA agent Donald Wilber, the operation would depend on the “vigor and courage” of Zahedi, as the shah could not be trusted to act decisively.

Nevertheless, the planners deemed the shah’s participation in the coup necessary. Kermit Roosevelt, chief of the Near East Division in the CIA and the coup’s principal architect, believed that Mosaddeq could be forced out only through a military coup. But he hoped to use “legal, or quasi-legal means” to oust the prime minister, in order to give the post-coup government more legitimacy. The plan would lean on the authority of the shah to appoint or dismiss Cabinet ministers. The shah would sign firmans, or royal edicts, dismissing Mosaddeq and appointing Zahedi as prime minister. This would lend Zahedi’s coup an air of constitutional authority.

There was a problem with the firman strategy: According to a strict interpretation of the constitution, the shah did not possess the authority to dismiss or appoint ministers without the approval of Iran’s parliament, the Majlis. The power of the shah to confirm appointments was ceremonial, modeled on the constitutional monarchies of Belgium and Sweden. Ministers exercised executive power “in the august name of His Imperial Majesty in such manner as the Law Defines,” but most authority was vested in the Majlis, rather than the monarch. Mosaddeq, struggling to bring the assembly to a quorum due to rising opposition and aware that the CIA was bribing Majlis representatives, dissolved the assembly in July. The move had dubious legality but deprived the shah of the ability to use the parliament’s support to oust Mosaddeq constitutionally. The shah, aware of the firman’s shortcomings, rejected its use during meetings with U.S. officials in July. The CIA and others then applied “relentless pressure” to convince him to take part. He finally agreed to sign a blank sheet of paper, on which Zahedi’s associates wrote the text of a firman removing Mosaddeq and naming Zahedi prime minister.

Mosaddeq had foreknowledge of the coup: The Tudeh Party leaked news of the plot to the prime minister. This detail indicates common interest rather than a Mosaddeq-Tudeh alignment — Iran’s communists had no interest in seeing a military government come to power. Mosaddeq rejected the firman when it was delivered to him on Aug. 16, while his supporters in the military were ready for Zahedi’s forces when they began to move that night. The military coup collapsed.

Roosevelt then changed the nature of the operation. He cabled the CIA and argued that the firman carried the weight of law, that Mosaddeq had committed a “revolution” by rejecting it, and that once it was publicized average Iranians would rise up and overthrow the prime minister. Roosevelt delivered copies of the firman to the New York Times and spread the idea that Mosaddeq now governed contrary to law. He urged the CIA to put pressure on the shah, pushing him to make a public statement confirming the legality of his firman. The operation, in his words, was “not quite dead,” and could be revived as a popular uprising and “countercoup” against Mosaddeq, who Roosevelt argued governed as an illegal dictator.

This narrative is carried over in Roosevelt’s memoir, which remains one of the most popular accounts of TPAJAX. Newly declassified documents, however, reveal considerable skepticism regarding Roosevelt’s plan. After the failure of the Aug. 16 coup attempt, the shah fled to Baghdad. The Office of National Estimates in Washington concluded that the shah’s departure was tantamount to abdication. Embassy officials in Tehran believed that the shah’s flight left Mosaddeq the “victor,” and predicted Mosaddeq would soon convene a regency council before announcing an Iranian republic. Mosaddeq appears to have rejected this idea, though he told the U.S. ambassador on Aug. 18 that the shah’s powers were “ceremonial” and could not be used to take personal control of the government.

Doubting the coup’s success or the validity of the firman, the State Department could not determine whether the language affirming the shah’s constitutional rights was “really meant at full strength” or if Roosevelt was deploying an imaginative reading of the Iranian Constitution to maintain momentum. CIA headquarters admitted there was “no fresh supporting evidence” that Roosevelt’s plan would work. Walter Bedell Smith, former CIA director and Eisenhower’s undersecretary of state, repeated Roosevelt’s claim that the operation was a “counter-coup” in an Aug. 18 note to the president. But Smith believed the United States would have to “take a whole new look at the Iranian situation” after the failure of Aug. 16, suggesting they “snuggle up” to Mosaddeq and perhaps begin new oil negotiations. State and CIA instructed Roosevelt, who was in Tehran, to discontinue operations. Roosevelt urged Eisenhower to declare publicly that Mosaddeq governed illegally “after being dismissed by the shah.” He then ceased communications with Washington, continuing the work of the coup without offering additional updates.

The next day, CIA-backed agents assembled pro-shah crowds in Tehran, as the coup’s military forces made a second move against Mosaddeq. The prime minister indirectly aided this second coup attempt by ordering the police to clear the Tudeh Party from the streets on Aug. 18, in order to bring calm to the city after two days of communist demonstrations. Overwhelmed by pro-shah forces, Mosaddeq’s government collapsed on Aug. 19. Crowds were assembled by paid agents or organized by the coup’s supporters in Iran’s clerical and bazaar circles. Arguments contending Aug. 19 was a spontaneous uprising in favor of the shah, or that the CIA played a limited role in the day’s events, have circumstantial evidence in their favor, but it is difficult to argue that the coup would have occurred in August, or that it would have succeeded, without U.S. involvement in the planning and execution phases.

Concerned that he would vacillate, the CIA used the flimsy authority of the firman to pressure the shah, threatening to tell the press that he had fled Iran and left Zahedi with “pieces of paper which are [neither] meaningful [n]or powerful.” Unless he assumed his position as figurehead monarch, Zahedi would be free to name a successor to replace him. Eisenhower approved this message on Aug. 20. The shah returned to Iran on Aug. 22.

Long-Term Stability?

The shah did not confine himself to his constitutional role. In the aftermath of the 1953 coup, he constructed an authoritarian military regime with himself as its leader. He sidelined Zahedi in 1955 and installed a loyalist, Hussein ‘Ala, as prime minister. Unlike Mosaddeq, who had attempted to observe democratic practices (though not always with success) while upholding the letter of the constitution, the shah rigged elections and limited parliamentary procedures, turning the nation’s assembly into a rubber-stamp committee.

The United States assisted with this process, supplying Iran with nearly a billion dollars in economic and military aid between 1953 and 1960. American policymakers oversaw the creation of a regime first suggested by Max Thornburg in 1952 — a modernizing dictatorship centered around the person of the shah and the institution of the monarchy. In the short term, this policy appeared effective. In 1954, the shah signed an oil agreement with Western corporations that reversed Mosaddeq’s nationalization, renewed corporate control of Iran’s oil, and guaranteed his regime a stable source of petrodollars. Iran solidified its ties with the United States through a formal defense agreement, leaned on CIA assistance to crush the Tudeh Party, and embarked on sweeping economic development plans.

But American policymakers believed Iran would remain a “basically unstable country,” unless the shah expanded political reforms. Instead, extravagant development programs and a military buildup caused dislocation and discontent. In June 1960, an acute financial crisis drove Iran to seek a bailout from the International Monetary Fund, while rigged elections caused a spike in domestic political unrest. It was clear to Eisenhower that Iran was heading toward disaster. Confidence in the shah’s rule eroded. The situation appeared as difficult “as it had been during the time of Mossadegh,” and Eisenhower suggested that perhaps it was time for “liberals” to depose the shah “and take over the government.”

To alleviate pressure from the United States, the shah embarked upon a new, heavily publicized reform campaign, which he called the “White Revolution.” The White Revolution included increased land ownership for Iran’s peasants, women’s suffrage, expanded education initiatives, and new economic programs emphasizing industrialization. The reforms allowed the shah to deprive the landed elite of their remaining political power, co-opting the aristocracy through patronage and tying them into the shah’s industrialization initiatives, while simultaneously repressing the country’s religious leadership and middle-class nationalists.

In the United States, the shah’s program was hailed as a triumph. But doubts remained over the long-term viability of his dictatorship, now that he had eliminated or co-opted all existing sources of political opposition. While the United States was ready to make peace with the shah’s rule, “profound political and social change appears virtually inevitable,” according to an intelligence estimate in 1962. The shah, concluded the CIA in 1963, “must ultimately rely on the military forces” to remain in power. The apparent success of the shah’s political consolidation “should not hide the fact,” wrote the State Department’s John Jernegan, “that Iran is still a weak country.”

While U.S. policymakers viewed the shah as a reliable ally and an important U.S. asset in the Middle East, others continued to worry that his regime lay upon unstable foundations, owing to its human rights abuses, lack of political representation, corruption, and economic mismanagement. The shah was able to use U.S. support to expand and enhance his own regional power, even as he pursued military spending and economic policies that produced inflation and alienated most Iranians. “Though superficially everything appears normal on the surface,” an intelligence report from May 1975 warned that dissent had risen “to an alarming degree,” owing to rampant corruption and political repression. Revolution toppled the shah less than four years later.

The United States stuck with the shah, as it stuck with many military dictators in the Global South. Part of this was preference — policymakers distrusted Iran’s nationalists and believed that the shah, despite his faults, offered the best way of maintaining Iran’s pro-U.S. strategic alignment. Policy choices had limited U.S. options: By toppling Mosaddeq, subverting Iran’s Constitution, and raising the shah to the level of dictator, the United States narrowed its field of viable allies in Iran. TPAJAX eliminated the short-term threat of communism, but did little to stabilize Iran or ensure its pro-U.S. alignment should the shah’s position weaken.

Brands’ prediction of a return to Cold War-era covert regime change looks like it might be coming true. In 2020, supporters of the Trump administration’s policy of “maximum pressure” against the Islamic Republic of Iran defend regime change as a feasible and “liberal” policy option. Reexamining the 1953 coup’s planning, execution, and impact is relevant to examining the current U.S. stance toward Iran. The coup of 1953 served U.S. interest, but only in a narrow sense. Policymakers considering a similar campaign against the Islamic Republic would do well to consider this history, and its implications for contemporary policy.

Dr. Gregory Brew is a post-doctoral fellow at the Center for Presidential History at Southern Methodist University. A historian of U.S.-Iranian relations and the political economy of international oil, his work has appeared in Iranian Studies, International History Review, Texas National Security Review, Mediterranean Quarterly, and The Oxford Research Encyclopedia. He also writes on the geopolitics of energy at The FUSE. Find him @gbrew24.

Image: Pahlavi Dynasty