In 1890, an itinerant Muslim activist called Jamal al-din al-Afghani was in Iran when its then ruler, Naser al-Din Shah Qajar, granted a tobacco concession to a British businessman called G.F. Talbot, effectively granting him a monopoly on its purchase, sale and export. Al-Afghani pointed out, to a chorus of approval from secular-minded intellectuals as well as conservative merchants, that tobacco growers would now be at the mercy of infidels, and the livelihoods of small dealers destroyed. He set up pressure groups in Tehran – a political innovation in the country – which sent anonymous letters to officials and distributed leaflets and placards calling on Iranians to revolt. Angry protests erupted in major cities the following spring. Helped by the recently introduced telegraph, the mass demonstrations of the Tobacco Protest, as it came to be called, were as carefully co-ordinated as they would be in Khomeini’s Islamic Revolution a hundred years later, when cassette-tapes played a similar role and women participated in large numbers.

Al-Afghani also wrote to Ayatollah Mirza Hassan Shirazi in Najaf, giving the greatly influential but apolitical Shiite cleric an early lesson in the ‘structural adjustments’ that Western financiers would come to enforce in poor countries: ‘What shall cause thee to understand what is the Bank?’ he asked. ‘It means the complete handing over of the reins of government to the enemy of Islam, the enslaving of the people to that enemy, the surrendering of them and of all dominion and authority into the hands of the foreign foe.’ Al-Afghani may have been exaggerating. But he knew from his experiences in India and Egypt how quickly the West’s seemingly innocuous traders and bankers could turn into diplomats and soldiers. The feckless shah had already compromised Iran’s relative immunity to Europe’s informal imperialists. In 1872, with the country starved of capital and suffering from a massive budget deficit, he had granted a monopoly in the construction of railways, roads, factories, dams and mines to another British citizen, Baron Reuter (founder of the news agency). Even Lord Curzon was appalled twenty years later when he was told the terms, describing it as ‘the most complete surrender of the entire resources of a kingdom into foreign hands that has ever been dreamed of much less accomplished in history’. Protests by Russia, Iran’s neighbour and Britain’s great rival in the region, sank this particular arrangement; Reuter anyway had other irons in the fire.

Coming only eight years after the British occupation of Egypt, the award of the tobacco concession struck al-Afghani as ominous. Expelled from Iran by the shah, he kept up a barrage of letters to leading Shiite clerics in the shrine cities of Mesopotamia, asking them to rouse themselves out of their apathy and move against the shah. A few months later, Shirazi wrote his first ever letter to the shah on a political subject, denouncing foreign banks and their growing power over the Muslim population as well as the commercial concessions given to Europeans. The shah, desperate to keep the ulema on his side, sent intermediaries to plead with Shirazi. Far from relenting, the cleric issued a fatwa effectively making it un-Islamic to smoke until the monopoly was withdrawn. He was astonishingly successful – even the shah’s palace became a smoke-free zone. Finally, the shah capitulated to an alliance between intellectuals, clergy and native merchants and, in January 1892, cancelled the tobacco concession.

Muhammad Mossadegh was at the time the precocious nine-year-old son of a high official working for the shah. Homa Katouzian, his previous biographer in English, ascribes his consistent opposition to ‘any concession to any foreign power’ to this early impression of popular anger at European encroachments on Iran’s sovereignty. Mossadegh, whose family belonged to the nobility and who was honoured as a child with the title, mussadiq al-saltaneh, ‘certifier of the monarchy’, was an unlikely leader of Iran’s transition from dynastic monarchy to mass politics. But then he grew up during a period of unprecedented political ferment across Asia.

Asian intellectuals and activists had begun to challenge the arbitrary power of Western imperialists and their native allies in the late 19th century. The first generation contained polemicists like al-Afghani, who gathered energetic but disorganised young anti-imperialists around him in Kabul, Istanbul, Cairo and Tehran. The next generation produced men like Mossadegh, who had been exposed to Western ways or trained in Western-style institutions and were better equipped to provide their increasingly restless compatriots with a coherent ideology and politics of anticolonial nationalism.

In Christopher de Bellaigue’s politically astute biography, Mossadegh is not the ‘dizzy old wizard’ and ‘tantrum-throwing Scheherazade’ of countless Anglo-American memoirs and press reports, but a member of ‘that generation of Western-educated Asians who returned home, primly moustachioed, to sell freedom to their compatriots’: ‘Beholden to the same mistress, La Patrie, these Turks, Arabs, Persians and Indians went on to lead the anticolonial movements that transformed the map of the world.’ Mossadegh was more democratically minded than Atatürk, for example: de Bellaigue calls him the ‘first liberal leader of the modern Middle East’ – his ‘conception of liberty was as sophisticated as any in Europe or America’. But he was less successful than his heroes, Gandhi and Nehru; he was nearly seventy, an elderly hypochondriac, by the time he became Iran’s prime minister in 1951. It was his misfortune to be a liberal democrat at a time when, as Nehru remarked, looking on as British gunboats directed the course of Egyptian politics, ‘democracy for an Eastern country seems to mean only one thing: to carry out the behests of the imperialist ruling power.’ Though more focused and resourceful than al-Afghani, secular-minded moderates like Mossadegh were often easy victims of imperialist skulduggery. They never had more than a few token allies in the West and at home were despised by the hardliners, who later assumed the postcolonial task of building up national dignity and strength. Khomeini, for one, always spoke contemptuously of Mossadegh’s failure to protect Iran from the West.

Both liberal and radical Iranians could cite instances of the country’s humiliation by the West in the 19th century, when it had been dominated by the British and the Russians. The events of the early 20th century further undermined its political autonomy at a time when its political institutions were being liberalised (a parliament had been established as a result of the Constitutional Revolution of 1905-7). In the First World War, Britain and Russia first occupied and then divided the country in order to keep the Ottoman-German armies at bay. The end of the war brought no respite. The Red Army threatened from the north and Britain, already parcelling out the Ottoman Empire’s territories, saw an opportunity to annex Iran. Lord Curzon, now foreign secretary and convinced, as Harold Nicolson put it, that ‘God had personally selected the British upper class as an instrument of the Divine Will,’ drew up an Anglo-Persian agreement which was almost entirely destructive of Iranian sovereignty.

Mossadegh is said to have wept when he heard about the agreement. In despair he resolved to spend the rest of his life in Europe. As it turned out, Curzon, never an accurate reader of the native pulse, had misjudged the Iranian mood. The agreement was denounced; pro-British members of the Majlis, the Iranian parliament, were physically attacked. Facing such opposition, Curzon grew more obdurate: ‘These people have got to be taught at whatever cost to them that they cannot get on without us. I don’t at all mind their noses being rubbed in the dust.’ Despite Curzon’s stubbornness, Iranian revulsion finally sank the Anglo-Persian agreement. But another inequitable arrangement already bound Iran to Britain. Presciently buying government shares in the Anglo-Persian Oil Company (APOC) in 1913, Winston Churchill had managed to ensure that 84 per cent of its profits came to Britain. In 1933, Reza Khan, a self-educated soldier who had made use of the postwar chaos to grab power and found a new ruling dynasty (much to Mossadegh’s disgust), negotiated a new agreement with APOC, which turned out to be remarkably like the old one. During the Second World War, British and Russian troops again occupied the country, and the British replaced the rashly pro-German shah with his son Muhammad Reza.

In these years, British policy was infused with what de Bellaigue calls, without exaggeration, ‘a profound contempt for Persia and its people’, which provided the spark not only for modern Iranian nationalism but also for the seemingly irremovable suspicion of Britain as a ‘malignant force’. When in 1978 the shah called Khomeini a British agent, he intended it as a vicious slander; it backfired, triggering the first of the mass protests against him. APOC, renamed the Anglo-Iranian Oil Company in 1935, grossed profits of $3 billion between 1913 and 1951, but only $624 million of that remained in Iran. In 1947, the British government earned £15 million in tax on the company’s profits alone, while the Iranian government received only half that sum in royalties. The company also excluded Iranians from management and barred Tehran from inspecting its accounts.

Growing anti-British sentiment finally forced Muhammad Reza to appoint Mossadegh as prime minister early in 1951. The country’s nationalists by now included secularists as well as religious parties and the communist as well as non-communist left. Mossadegh, who, de Bellaigue writes, ‘was the first and only Iranian statesman to command all nationalist strains’, moved quickly to nationalise the oil industry. Tens of thousands lined the streets to cheer the officials sent from Tehran to take over the British oil facilities in Abadan, kissing the dust-caked cars – one of which belonged to Mehdi Bazargan, who would later become the first prime minister of the Islamic Republic of Iran. The American ambassador reported that Mossadegh was backed by 95 per cent of the population, and the shah told the visiting diplomat Averell Harriman that he dared not say a word in public against the nationalisation. Mossadegh felt himself to be carried along on the wings of history. ‘Hundreds of millions of Asian people, after centuries of colonial exploitation, have now gained their independence and freedom,’ he said at the UN in October 1951: Europeans had acknowledged Indian, Indonesian and Pakistani claims to sovereignty and national dignity – why did they continue to ignore Iran?

He was supported by a broad coalition of new Asian countries. Even the delegate from Taiwan, which had been given its seat in the UN at the expense of Mao’s People’s Republic of China, reminded the British that ‘the day has passed when the control of the Iranian oil industry can be shared with foreign companies.’ Other postcolonial regimes would soon nationalise their oil industries, thereby acquiring control of international prices and exposing Western economies to severe shocks. But the British, enraged by Mossadegh’s impertinence and desperately needing the revenues from what was Britain’s biggest single overseas investment, wouldn’t listen.

Britain could no longer afford its empire but, as de Bellaigue points out, in many places, ‘particularly in Iran, red-faced men went around in tailcoats as if nothing had changed.’ Many of them were on the board of directors of the Anglo-Iranian Oil Company – and, as one of them confessed, were ‘helpless, niggling, without an idea between them, confused, hide-bound, small-minded, blind’. Still believing it ‘had done the Iranians a huge favour by finding and extracting oil’, Britain rejected a proposal, backed by the US, that the profits should be shared equally, and launched a devastatingly effective blockade of the Iranian economy. ‘If we bow to Tehran, we bow to Baghdad later,’ as the Express put it with Curzonian logic.

Churchill’s return to Downing Street in 1951 further emboldened the neo-imperialists: the Daily Mail exhorted the government to ‘do something before the rot spreads further.’ An anti-Mossadegh consensus rapidly built up, even among liberals. In 1891, al-Afghani had challenged Reuter’s depiction of Iranians fighting for sovereignty as religious zealots, wondering if it had some connection with Britain’s commercial stake in Iran. In 1951, David Astor’s Observer was no less protective of British interests when it described Mossadegh as a ‘fanatic’ and a ‘tragic Frankenstein … obsessed with one xenophobic idea’.

‘There was disquiet across the white world,’ de Bellaigue writes, at Mossadegh’s ‘show of Oriental bad form’. The Foreign Office started a campaign to persuade the American public of the rightness of the British cause and the US press duly fell in with it. The New York Times and the Wall Street Journal compared Mossadegh to Hitler, even though his occasionally authoritarian populism had to contend with a fractious parliament, and a growing internal opposition composed of merchants, landowners, royalists, the military and right-wing clerics (some of these would give the adventurers of the CIA and MI6 their opening). In The US Press and Iran: Foreign Policy and the Journalism of Deference (1988) William Dorman and Mansour Farhang show that no major American newspaper had ever spelled out Iran’s grievances against the AIOC. Rather, the Washington Post claimed that the people of Iran were not capable of being ‘grateful’. Looking back remorsefully, the New York Times correspondent in Tehran, Kennett Love, later described Mossadegh as a ‘reasonable man’ acting under ‘unreasonable pressures’. But Love himself was subtly coerced into going along with what he called his ‘obtusely establishment’ editors in New York, and into collaborating with the US Embassy.

Having proclaimed the ‘American Century’, Henry Luce’s Time took a particular interest in commodity-rich Iran, arguing that the ‘Russians may intervene, grab the oil, even unleash World War Three’. Already determined to overthrow Mossadegh, the British did not take long to exploit the growing American obsession with Soviet expansionism: Iran was to provide a test run on how to taint Asian nationalism by associating it with communism. They found a receptive audience in the Dulles brothers, the secretary of state and the head of the CIA in Eisenhower’s new administration in 1953.

Drawing on Persian sources, de Bellaigue gives an authoritative account of Operation Ajax, the CIA/ MI6 coup that toppled Mossadegh’s government and established Shah Reza Pahlavi as Iran’s unchallenged ruler in August 1953. The story of the Anglo-American destruction of Iran’s hopes of establishing a liberal modern state has been told many times, but the cautionary message of 1953 is still far from being absorbed. As early as 1964, Richard Cottam, a political officer in the US Embassy in the 1950s and later an Iran scholar, warned that the press and academic ‘distortions’ of the Mossadegh era bordered on the ‘grotesque, and until that era is seen in truer perspective there can be little hope for a sophisticated US foreign policy concerning Iran.’ (Or the whole Middle East, Cottam could have added.) The New York Times summed up the new imperial mood immediately after the coup: ‘Underdeveloped countries with rich resources now have an object lesson in the heavy cost that must be paid by one of their number which goes berserk with fanatical nationalism.’

Despite being told of it several times by Kennett Love, the Times declined to mention the CIA’s central role in Mossadegh’s overthrow – it was the then unknown agency’s first major operation of the Cold War. Welcoming the shah on his visit to the United States in 1954, the Times exulted: ‘Today Mossadegh is where he belongs – in jail. Oil is flowing again into the free markets of the world.’ Iran, it added, was moving ‘toward new and auspicious horizons’. The American press, which had been denouncing Mossadegh as the Iranian Führer, was now applauding the shah’s pharaonic modernisation schemes. This was at least in part a result of his hospitality to American media eminences, which, according to a list released by the revolutionaries in 1979, included Walter Cronkite, Barbara Walters, Peter Jennings and Mrs Arthur Sulzberger.

Emboldened by this support, the previously timid shah manifested signs of the syndrome al-Afghani had identified in one of his predecessors: ‘However bizarre it may seem, it is nevertheless a fact, that after each visit of the shah to Europe, he has increased in tyranny over his people.’ Certainly, the American press had little time for the views of ordinary Iranians, for whom, de Bellaigue points out, the US in 1953 had become ‘almost overnight’ the ‘shah’s accomplice in injustice and oppression’. American companies had been given a 40 per cent share of oil production after Mossadegh’s overthrow, and by the early 1960s Iranian intellectuals, many of them forced into exile, had begun to examine how it was, as Jalal al-e Ahmad wrote in Gharbzadegi (imperfectly translated as Weststruckness), that they had been completely ignored while other people ‘moved in and out of our midst and we awoke to find every oil derrick a spike impaling the land’.

Iranian hostility to the US grew, as the CIA did business with the executioners and torturers of the shah’s secret police. Finally erupting in 1979, it shocked American policymakers and opinion-formers, who sought to find an interpretation of current events through readings in ‘Islam’, as they would after 9/11. They were in no position to understand that, as with the Tobacco Protest of 1891 and the nationalist upsurge behind Mossadegh, a broad Iranian coalition had ranged itself against the shah and his foreign allies. Indeed, in the early days of the revolution, Mossadeghists like Bazargan looked just as strong as their socialist and Islamist allies. It was Jimmy Carter’s offer of asylum to the shah in 1979, and the retaliatory storming of the American Embassy in Tehran, that tipped the balance in favour of the Islamist revolutionaries.

Saddam Hussein’s brutal eight-year-long assault on Iran, cynically assisted by the US, entrenched the Islamic Republicans while burnishing the popular image of the Great Satan. Always under pressure, the liberalising reformers around Mohammad Khatami were further weakened by George W. Bush’s abrupt inclusion of Iran in his ‘axis of evil’. Since then, America’s invasions and occupations of Iran’s neighbours have confirmed Iran’s perception of the West as clumsily inept as well as guilty of what Khomeini called istikbar i jahani (‘global arrogance’).

War between Iran and the United States has never seemed more likely than in recent months, as American politicians and journalists dutifully endorse Binyamin Netanyahu’s bluster. There is little sign in the mainstream press here or in the US that anyone is paying attention to de Bellaigue and other knowledgable writers on Iran. A recent Guardian review of de Bellaigue’s book claimed that the shah ‘brought to Iran a prosperity, security and prestige unknown since the 17th century’. Mahmoud Ahmadinejad, an opportunistic tub-thumper whose support is dwindling and who suffers the supreme leader’s disapprobation, is routinely portrayed as the next Hitler.

Meanwhile liberal opinion ignores the effects that sanctions have on ordinary citizens, just as they did in the 1950s, and governments choose not to see that they offer a lifeline to a semi-discredited regime by radically shrinking the possibilities for any political or economic change – which is why the Green Movement strongly opposes them. The Iranian clerics may now linger on, like the Cuban revolutionaries, kept going by an American embargo. But Iranians can see more vividly the hypocrisy of America’s mollycoddling of Israel, the one country in the Middle East that is armed with nuclear weapons. They know, too, that the US made a nuclear deal with India as recently as 2005. Support for Iran’s right to pursue its nuclear programme cuts across the country’s political divisions. Aspiring regime-changers in the West remain blind to the undiminished potency of Iranian nationalism. More bizarrely and dangerously, they ignore the hardening attitudes of the country’s ruling class after a century of humiliation by the West. ‘We are not liberals like Allende and Mossadegh, whom the CIA can snuff out,’ Ayatollah Ali Khamenei, now Iran’s supreme leader, warned during the hostage crisis in 1979. So far he has been proved right.