‘As between friends’ Punch - December 13 1911. Caption ran: “If we hadn’t a thorough understanding I might almost be tempted to ask what you are doing there with our little playfellow”

Anglo-Iranian relations longue durée

It is vital not to promote illusions in any capitalist global power, argues Mike Macnair. This is an edited version of the online talk given to the ‘Voice of Revolution’ discussion group

I will start by working backwards in time, then go forwards, and finally discuss possible political conclusions. So we start with the fact that the 1953 coup against the Iran regime under Mohammed Mosaddegh was a British, not just a US, operation, and that that it was the British, to a considerable extent, who persuaded the USA that Mossadegh represented a ‘threat of communism’, while what they were really concerned about was UK interests in Iran.

In 1941 Reza Shah was overthrown by an Anglo-Soviet invasion purely for the geopolitical reason that they intended to ship supplies through Iran to the Soviet Union for the purpose of the war effort against Germany. Reza Khan (as he then was) had been put into power in 1921, having been groomed by British general Edmund Ironside. Ironside had previously been commander of the British intervention force against the Russian Revolution in north Russia, and after that was the commander of Britain’s intervention forces against Kemal Atatürk in Turkey - it was from there that he was moved to Iran and became backer of Reza Khan.

In 1914 at the outbreak of World War I Britain and tsarist Russia invaded Iran in order to prevent it from remaining neutral, because Turkey had decided to go with the ‘Central Powers’, and the Iranian government was looking for a sort of neutrality which would be more or less friendly to them.

In 1907, an Anglo-Russian convention, responding to the beginning of the ‘constitutional revolution’ in Iran in 1905, divided it into spheres of influence between Russia, which was to take the north, and Britain, which was to control the south. The Iranians were not party to this discussion. The British had positively encouraged the constitutional revolution. The decision to divide the country between British and Russian spheres of influence was thus an astonishingly cynical betrayal of the people whom Britain had encouraged to rebel.

In 1872, the ‘Reuter concession’ gave banker and businessman Paul Reuter the right to control roads, mills and factories, to conduct mining and to build railways in Iran. Protests from other capitalist countries led the British to support the Iranian government in reducing the scope of the concession (but not to cancel it completely).

In 1856-57, there had been an Anglo-Persian war. The British invaded Iran to force its government to back down over the Iranian claim to Herat in what is now western Afghanistan - in 1839 the British had, in fact, already threatened war over the Iranian claim to that city. This was in violation of the mutual defence treaty of 1814 between Britain and Iran.

Already in 1825, war had broken out between Iran and the Russians, and the British, in violation of the 1814 treaty, refused any aid to the Iranians, because they had agreements with the Russians in place, and instead, after the Iranians had been defeated, paid a substantial sum of money to buy out the positive obligations of mutual aid under the 1814 treaty. The British would still be under an obligation not to attack Iran, which they threatened in 1839 and actually did in 1856-57.

In 1810-14 there was, in fact, a British military mission supporting the Iranian crown prince, Abbas Mirza, against the Russians in a war in the Caucasus. After an initially successful operation, this ended in defeat. The British then immediately abandoned the Iranians, and strong-armed them into agreeing to a very disadvantageous treaty with the Russians in 1813. They did this because the tsar had changed sides - from alliance with the French to opposing them - since the time when the British started supporting the Iranian crown prince against the Russians. The 1814 mutual defence treaty was the quid pro quo for the Iranian acceptance of the disadvantageous treaty with the Russians in 1813.

But the 1810 support for Iran in itself had been a sudden turnaround, because, in fact, in 1807-10 the Iranian government had attempted to make an alliance with Napoleonic France, and the British had threatened the Iranians with war over that.

But the Anglo-Iranian relationship goes back significantly further - to 1622, when the British East India Company entered into an alliance with the Safavid shah, Abbas I, to evict the Portuguese from the island of Hormuz. They successfully did so and in thanks for this, the East India Company was granted a trade farman (decree), which gave it very extensive trading privileges and exemptions in Iranian customs and tolls, which were not available to other European traders, as well as a factory at Bandar Abbas. And in exchange for this farman, the East India Company, for its part, supplied naval muscle, which enabled the Safavid regime (and, after the fall of the Safavid dynasty, the regime of Nader Shah in the mid-18th century) to dominate the Gulf.

We can say in a sense that this was an imperialist/semi-colonial relationship, because the British succeeded to the position of the Portuguese. But it was much more like a quid pro quo relationship: the East India Company did not control the 17th or 18th century Iranian regimes’ policies: it merely received trade privileges in exchange for the supply of naval services.

Others have made the point that the East India Company substituted supplying Indian raw silk for what Europe previously received from Iran. This, however, is an aspect of the general phenomenon of the Cape of Good Hope route between Europe and India, which tended to impoverish not just Iran, but also the Ottoman empire (including Egypt).

So I have taken us backwards to 1622 - and I guess I could push even further back and say, ‘When did the Portuguese get control of Hormuz?’ That was 1515.


But now let us go the other way. We start somewhat earlier in the late medieval Mediterranean and North Sea.

In this period a new shipping technology emerged, which allowed bulk shipping. This was not absolutely new: there had been Roman shipping on this scale. But that was basically state-operated grain ships running from Egypt to Constantinople, from north Africa to Rome, and from Britain across the North Sea to the Rhineland garrisons. In contrast, 14th century bulk shipping was privately operated. Equally, looked at globally, it was smaller than the larger end of Chinese junks. But the power relation between private merchant shippers and medieval European states was markedly more favourable to the merchants than the relationship of Chinese merchant shippers with the Chinese state. And the new ships were radically bigger than those that had been in the Mediterranean and the North Sea up to that time.

That meant substantially larger docks to serve these substantially larger ships, many more dock workers and cranes powered by workers in treadmills. Similarly, because these ships were much larger, shipbuilding grew to an industrial, rather than artisanal, scale. This new shipping technology is, then, one of the central forms involving what Karl Marx called the “real subsumption of labour to capital”.

The “formal subsumption of labour to capital” is the ‘putting-out system’, where the merchant capitalist has an effective monopoly on the supply of raw materials and an effective monopoly on the purchase of the finished output, so that the merchant capitalist makes the small-scale artisans, who do the productive work, dependent on him, though they are formally still independent contractors rather than wage-labourers.

But the “real subsumption of labour to capital” is where numerous wage-labourers have to perform coordinated work, defined by the requirements of large-scale machines. This is obvious in modern industry. But the seamen and dockers are just as much subordinated to the large-scale machine as modern industrial workers: it is just that the machine was the large-scale ship, and its ancillary equipment - docks and shipbuilding.

This new shipping industry involves heavy capitalisation. But this means that the merchant capitalist needs to subordinate the suppliers of raw materials and the intermediate production stages to himself. He cannot work with the level of competition which exists in either artisan markets or, for that matter, traditional bazari merchant markets. Too much capital is at risk: so he needs tighter control, and to cut the degree of competition. Hence, for example, the Venetian state operates state-sponsored convoys and a state-controlled shipbuilding industry in the Arsenale. The Genoese in the same period invented marine insurance and related financial operations, which created the effect of centralising capital in the way in which capital is centralised in modern times by mergers and so on.

Cloth was shipped in bulk. There seems to have been significant demand in the Islamic world for west European woollen clothing: for example, at a relatively late stage, part of the East India Company’s reasons for operating in Iran was that there was significant demand in Iran for British woollen clothing.

Another part of the merchant shippers’ operations of the late Middle Ages was the sugar industry. This was again bulk-scale shipping.

A third element was spices. These were low bulk and high value, so that they could affordably be traded without bulk shipping. It is easy for this reason to think of spices as a luxury. But actually they were not, because they were needed for food preservation. Thus, for example, the Netherlands produced pickled fish on an industrial scale; this involved the use of spices which were imported from the Dar-Al-Islam (though originating in reality from south Asia and what is now Indonesia).

The problem which Venice and Genoa faced in the late Middle Ages was that they lacked sufficient coercive control to force the territories controlled by either the Ottomans or Mamluk Egypt and Syria to engage in primary sugar production at a low level, leaving the higher value-added operations to be done by Venetian and Genoese operators. The states in question were too powerful. Venice was not able to dictate to the Ottoman empire or to the Mamluk Sultanate in Egypt and Syria (Syria was the main place where sugar production was carried on in the Islamic world).

In this situation, Venice embarked on slave-worked sugar plantations, importing slaves and fixed capital equipment - in Crete, from the 1200s; in Cyprus, somewhat later. Genoese financial capital went into partnership from the 1400s with Portuguese physical shipping operators, developing Portuguese slave-worked sugar plantation colonies on the Atlantic Islands - starting with Madeira from 1419, then the Azores from 1427, Cape Verde from 1445 and Sao Tome from 1470.

Thus the Genoese-Portuguese nexus creeps down the west coast of Africa with Portuguese sugar plantations. They grew up out of the objective need of the bulk shipping industry to control the inputs for the sugar industry, and its inability to control the inputs for the sugar industry as long as they were basically being produced in Mamluk or Ottoman territory.

In 1497-98, famously, Vasco da Gama rounded the Cape of Good Hope, and the opportunity arose to cut out the Muslim middleman in the spice trade. Portugal then embarked on a very rapid career of conquest of port stations of one sort or another, step by step by step up the east coast of Africa, knocking out Arabic and other towns.

Goa was taken in 1510, Malacca in 1511, Hormuz, which I mentioned earlier, in 1515. This is the moment at which European imperialism begins to become a global phenomenon. I refer here only to the developments which are the more or less direct antecedents of the British involvement in Iran.


Now we shift sideways from the Mediterranean to the North Sea, where there was a similar development of bulk shipping - cloth again. Wool was being shipped from England to the Netherlands to be worked up into cloth. Grain was shipped from north Germany, from Poland, from East Anglia to the Netherlands and Scandinavia, where grain production is at a lower level.

As I already said, from the 16th century the Netherlands was running factory ships and fleets, which trawled up the herring and processed them on the ship to produce pickled herring. This is again industrial production - wind-powered, not steam-powered, but industrial production and the real subsumption of labour to capital.

In this milieu of the North Sea - north Germany, the Netherlands, Scandinavia, eastern England - Protestantism develops and takes hold. And, starting from Protestantism, in 1568 the Dutch revolt against Spanish rule and then the Eighty Years’ War between the Netherlands and Spain.

Meanwhile, the Portuguese monarchy was extinguished by military defeat in Morocco in 1578 and taken over by Spain in 1580. Spain thus inherited the Portuguese empire. And Spain was not just fighting to get back control of the Netherlands, but was also the Europe-wide champion of the Catholic ‘Counter-Reformation’.

In that context the Dutch were forced, in order to win against Spain, to create a navy, and to move into geopolitical operations on a global scale. Hence the Dutch East India Company; and the Dutch taking the Cape of Good Hope, Sri Lanka, parts of Indonesia. Taiwan, and so on.

The English also. The English Reformation was not so obviously a mass Protestant movement, but it was tied to dynastic struggles, and the Spanish monarchy sought to restore Catholicism both in the Netherlands and in Britain. So the English, then, are also driven to fight the Spanish and Portuguese on a global scale. And during this war, in 1600, the English create their own East India Company and embark on their own career of creating international trading posts and seizing this, that and the other. There was also settler colonialism in North America (but we can leave that on one side for present purposes). This is the context of the English East India Company taking Hormuz in 1622.

In the mid-1600s Spain’s reconquest project was unequivocally defeated. Peace was made with the Netherlands in 1648 and with France in 1660; Portugal had started a fight for independence from Spain in 1640 and the Spanish finally accepted defeat in 1668. The Cromwellian regime in Britain had made a treaty with Portugal in 1654 and, when the British monarchy was restored in 1660, the alliance with Portugal continued to hold, and the Portuguese gave Britain as part of the dowry of Catherine Braganza, who married Charles II, Tangier and Mumbai. Mumbai further strengthened the East India Company.

So Spain was down. Hence France under King Louis XIV took on the role of leader of the campaign for the restoration of Catholicism across Europe. I say restoration of Catholicism, but it is also very clearly the restoration of feudalism. We can see this, for example, in canal-building. The Netherlands demonstrated the utility of canals for transport infrastructure. When the English copied the Netherlands by introducing more canals, they set up trusts or corporations. Louis XIV’s government ‘infeudated’ the strip of land on which the intended canal was to be, granting it in feudal tenure, to be held by the grantee, on condition of providing so many knights to the king’s armed forces - a remarkable piece of visible reaction. Similarly, French colonial settlement in Canada was explicitly feudal.

With the French as the flag carrier for feudal restoration, there was a succession of world wars after the British revolution of 1688. I literally mean world wars, because they were on a global scale, between Britain and France, and varying allies on both sides - in 1689-97, 1702-13, 1740-48, 1756-63, 1778-83, 1791-1802, 1803-15. Of course, 1791-1815 is after the French Revolution. It is now the British who are seeking to restore the French monarchy (achieved, temporarily, in 1815), since a French capitalist competitor is even more of a problem for the British state than a French feudal-restorationist government.

In this context there was a series of proxy wars in India between the British East India Company and their Indian clients, and the French East India Company and their Indian clients - but with regular British and French army and navy forces also involved on both sides. The end result of these proxy wars was that the British East India Company ended up taking over what remained of the Mughal Empire in northern India, and acquiring control of the large northern Indian military labour market.

The East India Company thus became a territorial potentate in India, and what had been the normal pattern of capitalist imperialism - the creation of military-trading bases, unequal treaties to enforce the subordination of local production to merchant-shipping capitalist interests, limited island and exclave plantation colonies - was mutated into a large-scale empire. British territorial control of India produced in its turn by way of imitation French territorial colonialism, German territorial colonialism, and so on.

But it also produced the result that the British were now endlessly concerned with the geopolitics of protecting their position in India. They were frightened that the French might get into India following an invasion of Egypt (Napoleon’s aim in 1798) or by an alliance with the Iranians, and thereby be in a position to invade India. From the 1840s on they began to be concerned that the Russians would get into India through Afghanistan or Iran.

British-Iranian relations in the 1700s were fairly straightforwardly economic - trade privileges in exchange for the deal whereby the British East India Company provided the Iranian regime with the navy in the Gulf. But in the 1800s they became purely and simply a matter of geopolitics - and it is the geopolitics which results in the phenomenon of a perfidious Albion. The expression, ‘perfidious Albion’, had older roots, but was popularised by French revolutionaries: Britain is dishonest and untrustworthy, and you cannot expect their leaders to abide by their word in any agreement.

But this is actually just the geopolitical position of the world hegemon state. In the first place, there is nobody to stop the world hegemon state doing what it chooses, so that there is no penalty for its dishonesty. And, secondly, the world hegemon state has to constantly manoeuvre and shift alliances to keep down possible ‘peer rivals’. Since it has to constantly shift sides, it can never give any real guarantees to anybody. It is forced to be endlessly dishonest in its diplomacy and in its alliances of one sort and another. As I say, Iran is an extraordinarily striking example of the inability of the British state, while it was the world hegemon, to give any sort of serious guarantees of abiding by its agreements or offer long-term consistency in policy.


The 20th century history of Anglo-Iranian relations is commonly linked to oil, and in particular the Anglo-Persian Oil Company (APOC) - renamed in 1935 as the ‘Anglo-Iranian Oil Company’ (AIOC), whose assets in Iran were nationalised by Mossadegh. It is easy to imagine this as a purely economic issue, but it is, in reality, more geopolitics.

There was a gradual growth of what were initially luxury uses of refined oil products in the late 19th century, and then in the early 20th century people begin to think that these might have real military uses. This was in the first place about converting naval ships from coal-fired to oil-fired. A smaller number of mechanics replaces a large number of stokers, and oil storage took up less space than coal storage. It takes until roughly the middle of the World War I before road-transport internal combustion engines were doing anything seriously significant in military terms. For aeroplanes, on the other hand, once the Wright brothers succeeded with heaver-than-air powered flight in 1903, there was a very rapid development of planes for military use - initially for scouting, with other uses developing rapidly in 1914-18.

But, essentially, the idea that oil was going to power ships meant that oil became a strategic resource; and APOC-AIOC is a part of that story. The D’Arcy oil prospecting concession was granted in 1901, but the 1907 Anglo-Russian agreement came before the actual discovery of oil in 1908 and the creation of APOC in 1909: the 1907 agreement aimed to regulate Anglo-Russian competition all along the line, Iran-Afghanistan-Tibet, preparatory to war with Germany.

But the starting point for the 1916 Sykes Picot agreement, as James Barr has shown in A line in the sand, was to draw the borders in such a way that the oilfields in Iraq would be British-controlled, and that there will be a continuous flow of oil through British-controlled territory, via a pipeline running to the Mediterranean coast in the north of what is now Israel. The ideological representation of that partitioning is then the ideas of a British-protected homeland for the Jews in Palestine, and a French-protected homeland for the near-eastern Christians in Lebanon, with the Muslim Arabs to get Transjordan and Syria.

The British choices involved are about the need to control oil supplies. This is not about the need to control the oil as a primary product for civilian industry - for that, normal unequal trade agreements of the sort that exist for all sorts of other primary products would work perfectly well. The need to control the oil arises because if you control the oil supply you can throttle your potential peer rivals’ military capability.

In March 2023 General Michael ‘Erik’ Kurilla, commander of the US Central Command (Centcom, covering the Middle East), remarked that the extent of Chinese reliance on Middle-Eastern oil and gas means that “God forbid there’s ever a conflict with China, but we could end up holding a lot of their economy at risk in the Centcom region.” The case of the military uses of oil is even stronger. The French and Germans are today vulnerable to US control of the oil taps …

The Anglo-Persian Oil Company could be considered as a particular form of control mechanism. It is also true that all through the inter-war period APOC-AIOC was scamming the Iranian government as to the royalties which were chargeable on oil sales. But the US, although it overthrew Mossadegh, did not give back AOIC’s exclusive rights. Instead, a cartel of British, French and US oil companies - later called the ‘seven sisters’ - took over. US power replaces British. It is the military strategic point which is the central point rather than the commercial point.


My final point is about capitalism. Imperialism is normal capitalism. I argued this at length in a series of supplements in the Weekly Worker called ‘Imperialism and the state’ in 2022.

The basic point is that it is capitalist imperatives which force the Venetians into the creation of plantation colonies in Crete and Cyprus, or Genoese finance and Portuguese shipping into the creation of plantation colonies off the west coast of Africa, which leads in turn with Vasco da Gama to the beginning of the regime of European imperialism. These are imperatives created by the nature of capitalism - by the fact that capitalist production on an industrial scale requires ‘competition’ of a sort which is anti-competitive.

I added in the series that capitalism requires credit money, and therefore routine state enforcement of debts, which in turn requires the state to discriminate against the citizens or subjects of other states, so that every state is mercantilist. There is no such thing as a non-mercantilist state. The British pretended to be non-mercantilist in the later 1800s, but in reality they were using very extensive ‘non-tariff barriers’ to protect British interests, particularly in India. The Indian government required its citizens to pay for the army which held them down - by supplying raw materials to British industry.

The United States, of course, talks about freedom of trade endlessly. But in fact it consistently maintains protectionism. There was a shock in the liberal media over Trump raising tariffs against China, but the USA has continuously operated protective tariffs and ‘non-tariff barriers’ since the 1861-65 civil war.

From the idea that imperialism is not an endemic feature of capitalism, but a feature of the last or ‘highest’ stage of capitalism, came the idea that the workers’ movement can create a long-term strategic alliance, as opposed to short-term tactical agreements, with the ‘democratic bourgeoisie’ or with the ‘national bourgeoisie’ (with the ‘democratic bourgeoisie’ against fascism, or with the ‘national bourgeoisie’ against imperialism).

In the present, the alliance with the ‘democratic bourgeoisie’ is represented by the leftists who imagine that ‘the west’ will deliver Iran from the tyranny of the Islamic Republic. That is just as illusory as the belief that the Brits were going to support the constitutional revolution in 1905 - which they supported until it levered out the existing government, but then betrayed instantly in the 1907 spheres-of-influence deal with the Russians.

Equally, we were told by sections of the left in 1979-81 that the Khomeini movement was one of ‘national capital’ and that it was the duty of the working class to support this ‘national capital’ against international imperialism.

It turned out in reality that the Khomeini movement betrayed any alliance which might have been imagined to exist with the working class. Surprise, surprise - ‘national capital’ turns out to be not national. We can find numerous examples of this sort in recent history. The reason behind it is precisely that the imperialist world order - a structured hierarchy of states with a hegemon at its top - is inherent to capitalism as such. It is not a sign of the decay of capitalism.

So equally it is illusory to imagine that the Putin administration in Russia is going to be anti-imperialist. Russia is not now an imperialist country, but, if it wins the current war in Ukraine, it will become an imperialist country - just as in 1861 the US was still settler-colony, albeit expansionist, but the capabilities it created to win the Civil War in 1861-65 launched it on a career of overseas imperialism. After winning the Franco-Prussian war in 1870-71 Germany was launched on a career of naval expansion and overseas imperialism. Similarly victory in the Sino-Japanese war of 1894-95 launched Japan immediately on a career of overseas imperialism.

Today China presents itself as being more progressive - not like the old nasty imperialists of the west, but offering equal relations with the places where China invests. But this, of course, was just what the French argued, as against the British, in relation to Latin America in the 1800s: France was more modern, egalitarian and republican than nasty old Britain. The United States, similarly presented itself through the first half of the 20th century as being the more open and honest dealer, the more modernising trade partner. But, once the USA actually becomes the world hegemon, it turned out to be the empire of lies - just as Britain as the world hegemon was the unavoidably ‘perfidious Albion’.

My political conclusion, then, from this long history is simple. It is that the history of British imperialism in relation to Iran is a striking argument for why it is important not to promote illusions either in nicer great powers, or generally, in the ‘national bourgeoisie’, or the ‘democratic bourgeoisie’.