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In his unbridled pursuit of industrial growth, technological progress and military development, the Shah sent tens of thousands of young Iranians overseas for advanced education. Many of them stayed abroad as embittered exiles. The Shah did not seem to realize that the middle classes, which in time came to constitute about 25% of the Iranian population, wanted increased political rights and freedom of expression as well as a share in the country's new wealth. According to the University of Texas' James A. Bill, one of the ranking experts on Iran in the U.S., the Shah's tactics broke down in the early '70s with the rise of a "frightening secret police apparatus." Writes Bill in the current issue of Foreign Affairs: "A period of un-Persian rule by repression set in and a group of hard-liners in the intelligence organization took charge." Though Iran was hardly ready for Western-style democracy, the Shah introduced a period of liberalization two years ago, but Iran remained an autocratic state. Iranian dissidents took heart from the election of Jimmy Carter and his strong human rights policy. But when Carter visited Tehran a year ago, he scarcely mentioned human rights and instead heaped praise on his imperial host. The dissidents were bitterly disappointed.
A resurgence of Islamic fundamentalism, which has profoundly affected other countries in the Middle East, also swept through Iran, where the Shi'ite mullahs have traditionally served as the conscience of the people. The mullahs were scandalized by growing corruption that clearly involved the royal family, by the jet-setting Western ways of Iran's new rich, by the Shah's apparent contempt for the faith to which most of his people belonged. Beyond that, the mullahs were infuriated early last year when the then Premier, Jamshid Amuzegar, canceled the $80 million annual subsidy that they had formerly received from the Palace to spend on mosques, scholarships and travel. In addition, in an effort to curb inflation, Amuzegar imposed price controls, and this angered the influential bazaar people.
What happened to the Shah's once very real support? Sums up a senior American businessman with many years' experience in Iran: "He lost contact with the peasants. He lost control of inflation. He lost contact with the mullahs. He lost control of SAVAK [the secret police]. He lost control of his own family and all the outrageous deals they made for personal profit. All he had left was the army."
Political demonstrations began in January 1978 and have continued ever since. They were supported by the political left, including the banned Tudeh Communist Party, but led by the Shi'ite Muslims, and the exiled Ayatullah Khomeini became the embodiment of that protest. Nonetheless, as Professor Bill notes, it was "the educated, professional middle class"