Father and Son: Similarities Both the cabinets and parliaments were deemed as the rubber stamps of the shah. In the words of one foreign diplomat, the shah treated his prime ministers and other ministers as if they were office boys. In the parliament, at first he constructed two parties: National Party and New Iran Party. These two parties became known interchangeably as the “yes” and the “yes, sir” or “yes, of course” parties. Muhammad Reza Shah Reza Shah’s dream of building a massive state structure. One of the pillars holding up his state was the military. In its share of the annual budget went from 24 to 35 percent. By 1975, the shah had the fifth largest army in the whole world.

SAVAK With the help of the FBI and the Israeli Mossad, the Shah established in 1957 a new intelligence agency, SAVAK. The agency eventually grew into some 5,000 operatives and an unknown number of part-timer informers. In the words of a British journalist, SAVAK was the shah’s “eyes and ears, and where necessary his iron fist.” In 1976, Amnesty International reported that “no country in the world has a worse record in human rights than Iran.”

White Revolution In 1963, the shah launched a White Revolution designed to compete with and preempt a Red Revolution from below. The White Revolution brought about a minor industrial revolution. The state improved port facilities, expanded Trans-Iranian Railway, and financed petrochemical plants, oil refineries and hydroelectric dams. Moreover, the state bolstered the private sector both by erecting tariff walls and by channeling low interest loans to court favored businessman. As an outcome, the number of industrial enterprises in the country increased dramatically.

Social Policies After the launching of the White Revolution, the state also pressed ahead with social programs. For instance, the number of educational institutions grew threefold, and the literacy rate increased from 26 to 42 percent. The number of students increased dramatically at all levels of the education. Health programs increased the number of doctors, nurses, medical clinics and hospitals. These improvements, together with the elimination of famines and childhood epidemics, raised the overall from 19 million in 1956 to 33,5 million in 1976.

Social Changes and Class Structure At the apex was an upper class formed of a narrow circle of families linked to the Pahlavi court. Together these families owned 85 percent of the large firms involved in insurance, banking, manufacturing, and urban construction. With the improvements of education facilities, modern middle class, including civil servants, teachers, managers, engineers, and other professionals, expanded. These people, who could be called as salaried middle class numbered more than 700,000, some 9 percent of the working population. As an outcome of industrial investments, the urban working class numbered as many as 1.3 million, more than 30 percent of the labor force.

Traditional Social Groups Traditional social groups such as shopkeepers (bazaaris) and religious scholars (ulama) were still important actors in social, economic, political and cultural life. Despite economic modernization, in the mid-1970s the bazaar continued to control as much as half of the country’s handicraft production, two-thirds of its retail trade, and three quarters of its wholesale trade. Bazaaris and their sons were increasingly crossing over into “modern” sectors of the economy. Numerous industrialists had their origins in the bazaar, and modern educations were opening new career paths for the younger generation.

Social Tensions The regime’s preferred method of development had widened the gap between haves and have-nots. Its strategy was to funnel oil wealth to the court-connected elite who would set up factories, companies, and agro-businesses. In theory, wealth would trickle down. But in practice, wealth tended to stick at the top, with less and less finding its way down on the social ladder. By the 1970s, according to the International Labor Office, Iran had one of the very worst unequal income distribution in the world.

Tehran