Nationalized Oil, Governmentalized Oil, and Nationalized Government

Sixty-one years after Prime Minister Mosaddegh declared the nationalization of Iran’s oil industry, many analysts still doubt if the oil was actually nationalized or governmentalized. We see Dr. Mosaddegh’s decision criticized by some Iranian intellectuals. What is your analysis?

Whatever the consequences of the decision, I don’t think they could devalue Iranians’ battle to liberate their oil resources from the hands of imperialism. With the wisdom of hindsight, many find it easy to think of other possible choices; but as I said, that can not downplay the magnitude of the movement, and Mosaddegh’s leadership. If the Iranian nation had stepped out of the struggle, we would have been bereft of our oil resources. Mosaddegh followed two other goals beside the oil industry nationalization: a social democratic plan to establish social justice through taxation, social security and collection of royalties from wealthier landowners; and reforming the electoral system in order to further democratize Iranian politics. I see an interdependence between the nationalization of the oil industry and these two goals.

The 1953 US- and UK-led coup aimed to topple Mosaddegh’s democratic, efficient cabinet and to replace it with a puppet government. The cabinet formed after Mosaddegh’s overthrow was a pawn of imperialism. It was brutal, authoritarian, anti-independence [from foreign powers] and anti-justice. At that time a few of the West-educated, conservative elite supported the post-coup government, arguing that with the new political system the path to social reform would be less rugged, but their cause ultimately failed to materialize. This just shattered the myth that compromise with dictatorship and imperialism would be less costly. See how after the coup oil was governmentalized, and fell in the hand of a pro-West elite and the Iranian reactionaries.

Iran could not have constructed the much-needed economic infrastructures if there were no fair and square oil revenues. And if the British kept control of our oil industry at that time, the world would have now been in a different state. [Third-world] oil-rich countries would have no voice and they could not utilize their revenues for development plans. Even with the flawed mechanism after Mosaddegh, thanks to his national movement which was supported by labour unions and left-wing groups, rising oil prices and lucrative profits poured into the country. Iranian society managed to utilize a segment of the oil income for state-run mega projects, such as construction of roads and railways, and also airports. But in the meantime, Iranian society had fallen prey to global capitalism.

So you actually believe that Dr. Mosaddegh’s campaign for nationalization of the oil industry failed to become fully accomplished?

Yes. Oil was actually not nationalized, but governmentalized, and what an unjust government it was [after the 1953 coup]. But as I said, that does not mean that Iranians at that time should have hesitated at keeping up their pro-independence, pro-justice movement just because of an intimidating enemy. Essence barred, pace and intensity of the movement is of course an incendiary concern. What matters here is that the uprising of the Iranian nation, which was recorded in history, set a precedent on how to exploit our national resources and inspired other oil-rich countries [to follow the same path].

For Iranians, nationalization is a precious cause. But let’s not confuse our understanding of the term nationalization with its common usage in Europe. What we wanted to gain through nationalization was to finally materialize the 1907 Constitutional Revolution ideals which were justice, democracy, independence [from foreign intervention] and fair usage of resources. I think when some observers call for the liberation of oil from the hands of the government, they mean it is manipulated by traders and capitalists. So nationalization of the government is a prerequisite to nationalization of the oil industry.

You spoke of the spread of independence movements and resistance against British imperialism as a fruit of Dr. Mosaddegh’s campaign. But on the other side, we have analysts such as [the liberal reformist] Sadegh Zibakalam who claims that despite what is misleadingly mentioned, it was not the British government, but the privately-owned D’Arcy Company with which Iran was battling over Khuzestan oil resources.

Then ask them to explain why the British government backed the company and threatened to launch a war against Iran? Britain actually threatened to deploy its troops to southern Iran and Mosaddegh responded by saying “if that happens, we will pour all the oil we have into the sea and set it all on fire.” The British government sued Iran in The Hague Court and that defies the claim that D’Arcy was merely a private enterprise. His company represented the British government-- just as the East India Company did in India. London cooperated with the Americans in launching the 1953 coup. Dr. Mosaddegh was shrewd enough to understand the fallacy of such claims [that the British government was not involved].

Mr. Zibakalam has also said that if Mosaddegh had agreed to an offer of a 50-50 split of oil revenues or the World Bank’s suggestion [to act as an arbiter between Iran and the UK for two years before the dispute is settled], we could have still safeguarded our national interests, and even the 28th of Mordad coup would have never happened, so we might have had not endured 25 years of dictatorship afterwards [until the 1979 Islamic Revolution]. Do you agree?

I think he is making up history. The fifty-fifty share was only put forward after the coup by the consortium comprised of British and American corporations and the Iranian government. Besides, price-setting would be still in the hands of the British, and there was the strong possibility that they would pay Iran revenues based on the minimum price and take the lion’s share for themselves.

Look, all those finance ministers of the post-Mosaddegh years were proud to attach themselves to him. Even the Shah tried to appropriate Mosaddegh’s achievements in his own name, for what Mosaddegh did was indeed glorious. History is full of forgery, and one of them is such comments about reasonable proposals offered to Mosaddegh. What we needed then was the right to make decisions independently, be acknowledged with sovereignty over our own assets, and have the freedom to exploit and allocate our national resources.

Commentators like Abbas Abdi argue that oil has been the cardinal impediment against Iran’s democratization and Iran’s course of democratization would have been much easier if the government did not rely on oil revenues, but on citizens’ taxes. Do you see such a relation between oil and democracy?

Not at all. Mr. Abdi is not an economist and has no expertise in political economy. He was just an aide to a [presidential] candidate [Mehdi Karroubi]. If there is an inverse relation between these two entities, then how come Norway enjoys both oil revenues and democracy? Democracy does not mean that we cede oil resources to commerce chambers or wealthy traders. No historical case can prove that capitalism and the petit-bourgeoisie can bring us democracy, but there are many studies which reveal that trade unions, teachers, labourers, nurses and other such professionals’ associations could actually catalyze democracy. The private sector has always loathed syndicates and labour unions. A society in which syndicates are regarded as pariahs cannot achieve democracy, even if the oil industry is privatized.