The Cold War, oil, and new borders intensified the fight for hegemony in the Middle East. The shah maneuvered around thorny international issues by keeping intact his ties to different US administrations. Iran watched the Vietnam War with concern but maintained a balanced stance. Elsewhere, the creation of the Organization of the Petroleum Exporting Countries (OPEC) brought some regional cooperation. However, in the Persian Gulf, Iran became isolated and faced competition from the Arabian Peninsula and the newly Arab states of the south. Its conflict with Iraq escalated until a short-lived truce was concluded in 1975. Iran also flexed its muscles by supporting the Sultanate in Oman during the conflict in Dhofar, but the shah’s interventions only fueled the domestic unrest against his rule. Student groups and artists increasingly decried the shah’s dictatorial ways.

This chapter examines the consolidation of Pahlavi rule after the removal of Reza Shah from power, especially after 1953, when the reign of Mohammad Reza Pahlavi was reestablished following a CIA-sponsored coup. The chapter explores the tenuous beginnings of the reign of the new Shah, the increasing legislative and policy-making significance of the Majles in the 1940s, and the era of oil nationalization, from 1951 to 1953. Prime Minister Mohammad Mosaddeq was successful in getting the powers of the monarchy to be significantly reduced, but his overthrow was followed by the restoration of absolute monarchy built on a massive army and a feared secret service called SAVAK. Ultimately, however, the Pahlavi state failed to incorporate within its orbit and its social base remained weak. As the oil revenues began to lag, and the state was forced into making “housecleaning” concessions, it began to crumble under the weight of the gathering storm.

Chapter 4 covers the first year of Reagan’s presidency. Living up to conservative expectations, his administration embarked upon the most hardline, anti-communist agenda in at least two decades. To compel the Soviets to negotiate on arms control, Reagan would oversee the largest peacetime military buildup in American history. But there was little evidence of any strategy to complement the buildup. The Reagan administration engaged in anti-Soviet rhetoric, rejected the idea of a summit with Brezhnev, and refused to offer any serious arms control proposals. The confrontational approach raised US–Soviet tensions during 1981. This chapter also discusses Reagan’s support for the Contras in Nicaragua, which prompted resistance from Democrats in Congress, culminating in the Boland Amendment of late 1982. Finally, the chapter analyzes the crisis in Poland, which saw the imposition of martial law amid the movement led by Solidarity (a non-communist trade union). I discuss the complex factors behind Reagan’s response: his ideological beliefs, European–Soviet trade relations, the influence of the AFL-CIO, and conservative criticism.