The Iran-U.S. Dispute and Military Action

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The conflict

Iran and the U.S. are at odds. They have been greatly at odds since 1979 when the Shah of Iran fell from power and the Islamic Republic of Iran began. But the U.S. participation in the coup that overthrew Prime Minister Mossadegh in 1953 shows that the U.S. has long sought substantial influence over Iran’s rulers. What are the roots of the antagonism between these two states, and how might it end up?

The main U.S. aim in the region is a steady flow of oil from the Middle East. To attain this goal, U.S. policy since World War II has been to protect the security of Saudi Arabia and to have close ties with nearby oil-producing entities like Kuwait and the United Arab Emirates. In the past, this aim involved ties and influence over Iraq and Iran, until problems of control arose.

The protection policy follows a general pattern established long ago when the British obtained oil concessions: "The Ruler of Qatar, for example, secured a formal guarantee of protection from Britain against attack by an external power before signing the May 1935 commercial agreement."

Secondly, the U.S. supports the existence of the State of Israel. Iran doesn’t.

The Bush Doctrine introduced another aim, American national security. Bush declared that American Middle Eastern policy will be designed to prevent "catastrophic harm to our country and to our friends." The means will be "a forward strategy of freedom in the Middle East." The Iraq War is an example of the forward strategy in operation.

The U.S. has a fourth aim, which is to prevent Iran and the Middle East from being dominated or heavily influenced by Russia. The chance of this happening at present is low, but dominance is a longstanding Russian ambition.

All the U.S. aims bring the U.S. into confrontation with Iran. The U.S. wants to counter Iran politically, ideally have it under U.S. influence. In essence, this implies a position of weakness or even submission for Iran.

Iran, on the other hand, aims to be (a) independent and (b) a regional power. By independence, Iran means that it does not want to kowtow to other countries, to be pushed around, or to be treated as a second-class pariah.

The U.S. goal of dominance and the Iranian goal of independence are irreconcilable. This is why the U.S. and Iran are in conflict.

The problems faced by the U.S. are problems of its own making. The U.S. introduced itself into the Middle East. It did not have to aim for secure oil via political agreements. It did not have to support the State of Israel. It does not have to inject itself into Iraq or other nations to secure itself. It does not have to prevent Russia from trying to meddle in the Middle East. Iran aims to become a regional power. The U.S. does not have to prevent this either.

Now that the U.S. is thoroughly entangled in the Middle East, it will have big problems disentangling itself. But it should, because no good for the U.S. is coming out of being enmeshed in the affairs of the Middle Eastern nations. The oil is less secure and the U.S. is less secure. This seems to be a no-brainer.

Iran and the U.S. do not have diplomatic relations. Their officials hardly even talk to one another. A brief thaw transpired in 2000 when both President Khatami of Iran and Secretary of State Madeleine Albright made some hopeful gestures, although they exchanged no words. However, their actions did not have time to overcome the irreconcilable aims of the two countries or their history of conflict that includes the CIA’s overthrow of Mossadegh and Iran’s support of Hezbollah. In short order, the CIA during the Bush administration was accusing Iran of various terrorist and nuclear activities. Bush was placing Iran in the axis of evil, and the warming gave way to a deep freeze. This sharp shift in the climate severely injured progress.

The U.S. possibly can get off the Middle East hook by a settlement in which the U.S. agrees to withdraw from the region (as the British once did) in return for agreements from Iran and Syria (and perhaps a few other nations) to recognize Israel. The U.S. would have to make other concessions and the State of Israel would also have to make very serious concessions. The U.S. does not want such an agreement or withdrawal. It is still intent on using its power in the region. It is also not clear that Iran and Syria, among others, want to let the U.S. off the hook.

The nuclear issue

To become stronger and more independent, Iran wants its own nuclear power plants. The U.S. vigorously supported the Shah’s ambitious plan to have nuclear power plants. But ever since his overthrow, the U.S. has tried to derail Iran’s nuclear program (and its government.)

Iran’s oil production has fallen dramatically while its population has risen. Every barrel of oil Iran uses domestically sacrifices the receipt of export dollars. The oil that Iran uses costs Iran just as much as it costs to an outside buyer. This is one reason why it wants nuclear power. The U.S. leadership has propagandized that Iran is awash in oil and does not need nuclear power plants. This myth has been repeated in the American press.

As a further step toward independence and power, Iran also wants to control each stage of the uranium production process. This is allowable under the nuclear non-proliferation treaty. It allows a low degree of uranium enrichment, and Iran wants to do this processing itself.

The U.S. doesn’t want Iran to have nuclear power plants, and it does not want Iran to have nuclear weapons. The U.S. views an allowable nuclear power program under International Atomic Energy Agency (IAEA) supervision as a precursor to an Iranian threat of nuclear weapons being developed. This is consistent with the U.S. goal of keeping Iran politically weak. Had the U.S. not blundered into the region, the whole nuclear issue would not have been a problem for it, real or imagined.

Actually, Iran has no nuclear weapons. It is a signatory to the nuclear non-proliferation treaty, and the IAEA inspects its nuclear program. Iran has consistently denied ambitions for nuclear weapons. It has verbally guaranteed that it is against them and will not produce them. This could change if threats or pressures against Iran rise to a high enough level.

Since an Iranian nuclear program is legal, the U.S. uses other means to browbeat and undermine Iran’s ambitions such as influencing Russia to slow down its work, instituting sanctions to slow down Iran’s progress, and influencing European countries who deal with Iran.

Exaggerated U.S. fears of Iranian nuclear potential are deeply embedded in the American psyche. They permeate U.S. thinking and policy. The U.S. has for over 25 years persistently raised the spectre of Iranian nuclear weapons even though Iran has none. In 1985 the military was considering reports of Iran attempting to develop nuclear weapons during the Iran-Iraq War. In 1992, military thinkers spoke of Iraq, Iran, and Libya luring Russian scientists to work on their nuclear programs. In 1996 the Congress of the United States passed The Iran and Libya Sanctions Act. Rep. Gilman (N.Y.), for example, at that time spoke of the clandestine nuclear programs of both Iran and Iraq as if they were real. None of this has ever panned out.

IAEA inspectors have been inspecting Iran for years. They haven’t found any nuclear weapons program going on in Iran much less actual weaponry. The IAEA now is beginning to act as Bush did with Saddam Hussein. The IAEA has demanded that Iran somehow prove a negative, that it does not have nuclear ambitions or weapons.

Iran for many years conducted allowable small-scale experiments on the enrichment of uranium but it failed to disclose them as it was obliged to. These were lab or bench experiments. Their sophistication level was not high. Producing various uranium compounds in the lab is a very long way from creating concentrated uranium and a workable bomb that can be placed on a missile. After these experiments were revealed in late 2003, Iran moved to a policy of full disclosure and additional voluntary inspections. This backfired on Iran. It produced increased Western and IAEA suspicions, demands, and pressure accompanied by long negotiations that recently halted or have failed when Iran ended its voluntary suspension of enrichment activity. Mohamed ElBaradei, director-general of IAEA, seems to have taken each voluntary or other concession as reason to demand another and another. As the saying goes "Give an inch and he’ll take a mile." He gave an interview to Newsweek in which he vented his righteous indignation publicly against Iran for stopping what it volunteered to do over and above its legal requirement two years ago. This took him out of a supposedly objective mode into a powerful political mode. In 2005 President Khatami expressed disappointment with the ongoing talks with the EU-3 and hinted that Iran would end its voluntary halt of uranium enrichment if the other side did not live up to its promises. This has now happened. Iran’s side of it is presented in detail here. The whole issue now appears headed for some sort of U.N. process, but only time will tell.

Why would Iran, despite their high cost, want nuclear weapons? A country with nuclear weapons can’t use them against another country that also has them for fear of retaliation. If both Israel and Iran have nuclear weapons, the chances are neither will ever use them on each other. The country that has nuclear weapons can intimidate and/or deter the country that does not have them. Israel can deter Iran, for example. However, this one-sided balance of power is an inducement for Iran to get nuclear weapons. If it got them, it couldn’t use them. Therefore, Iran (rationally) seeks to get Israel to give up its nuclear weapons and join the nuclear non-proliferation club. But if Iran thinks that the U.S. and/or Israel are a big enough threat to its existence, then it becomes rational for Iran to get nuclear weapons so as to neutralize the threat.

In the end, has Iran so far accumulated fissile material and conducted the experiments needed to produce an atomic bomb (never mind a hydrogen bomb)? No, it has not. Is it a few months away from building a bomb? No, it is not. Perhaps the Clinton Administration gave them atomic secrets, as some accounts suggest. This sounds quite far-fetched but we do not know. If so, where is the evidence of weapons production? There isn’t any, and the IAEA looked hard.

It is rational for Iran to do the initial research on nuclear weapons, especially if it keeps it within legal bounds. What this does is provide Iran with the option later on to produce weapons if the need arises. This option is valuable. It strengthens Iran. This is why the U.S. is against even this step. This is one reason Iran will not accept the Russian suggestion that it enrich uranium and ship it to Iran. On the other hand, a viable course of action might be for a joint Russian-Iranian company to enrich uranium in Iran. The Russians could make sure that the enrichment was low-level, and the Iranians could increase their technological skills.

Military action

Under the Bush Doctrine, the U.S. could go to war with Iran at any time Bush chooses. He has repeatedly demonized Iran. It wears the scarlet letter T for terror and tyranny. However, a big collision between Iran and the U.S. is probably not imminent. At present, the futures market is saying that we should not expect the deadlock to end in an air strike against Iran. The chance of an overt U.S./Israeli air strike against Iran in the next 14 months has fluctuated between 32 to 39 percent recently (see Tradesports). This is a substantial chance.

Let us look at this event from the point of view of the U.S. leadership. Imagine that it is considering a decision to make an air strike. The goal is to delay Iran’s nuclear power program, not regime change. Let us examine a number of factors that lower or raise the chance of an attack.

  1. Bombing may not accomplish its goal because some Iranian facilities are hardened underground (lowers chance.) On the other hand, the Bushehr reactor can be destroyed and bombing would do enough damage to delay Iran’s progress for some years (raises chance.)
  2. Iran may retaliate. It is strong enough militarily to attack Americans in Iraq (lowers chance.) On the other hand, the Iranian army is not experienced, has little staying power, lacks equipment, and lacks air cover. It’s best at defense (raises chance).
  3. Iran can bomb Israel with missiles (lowers chance.) On the other hand, the missiles may not be too accurate and Israel has some anti-missile capabilities (raises chance.)
  4. Iran can bottle up the Straits of Hormuz and interfere with Persian Gulf traffic (lowers chance.) This is a real threat because Iran can mine the Gulf and has various missiles. On the other hand, doing this cuts Iran off from a vital source of export and import for itself (raises chance.)
  5. An air strike will strengthen the current regime in Iran as most wars do (lowers chance.) On the other hand, some elements within Iran want regime change (raises chance.)
  6. An air strike will radicalize Muslims and create an insurgency (lowers chance.)
  7. An air strike will not change longstanding Iranian objectives. In fact, it will strengthen their will to achieve them, even if they are delayed (lowers chance.).
  8. An air strike will cause Iran to drop out of the nuclear non-proliferation treaty and develop nuclear weapons as a defensive measure (lowers chance.) If Iran develops nuclear weapons, then neighboring countries like Saudi Arabia will reconsider their non-nuclear policies (lowers chance.)
  9. An air strike does not resolve the Israeli-Palestinian conflict. It makes it worse because it will, if anything, harden Iran’s antagonism toward Israel (lowers chance.)
  10. An air strike will cause a sharp rise in the price of oil. This will torpedo Western economies for a while (lowers chance.)
  11. The U.S. military forces are not prepared for an Iranian engagement at this time (lowers chance.) On the other hand, they can be pressed and inspired further (raises chance.)

Perhaps factors such as these explain why the market makes the odds at about 2-1 against an air strike. However, a 32—39 percent chance of another war is substantial. We can understand why. The basic U.S. policy is to undermine the existing government in Iran. The U.S. has said that it retains the military option to do so and may use it as a last resort. There are unconfirmed reports of U.S. Special Forces in Iran or in and out of Iran or making ready to enter, either for intelligence, destabilization, preparatory, or infrastructure destruction purposes. There are unconfirmed reports of U.S. overflights attempting to get Iran to reveal its air defense and radar systems.

There is information that U.S. contingency plans against Iran go beyond air strikes. They do not involve substantial ground troops. They call for massive bombing, not only of suspected nuclear sites, but elsewhere, plus the invasion of enough ground and Special Forces to create a fall in the regime and a replacement with a new form of government. American planning looks for a cheaper version of regime change than in Iraq. However, the many negatives listed above suggest there is no such thing as cheap regime change. Occupation might prove necessary after all.

An air strike by itself does not fit in with America’s main goal of keeping the oil flowing without disruption, and it may lead to a wider war. Therefore, a full-scale attempt to remake Iran might tempt Bush. The best scenario he can hope for is a collapse in Iran’s political structure, people dancing in the streets, and the army throwing down its weapons. Then might come the typically messy creation of a new government. Other scenarios involve prolonged war. Available sources suggest that Iran’s armed forces, while inexperienced, might be fairly formidable in a defensive mode, more so than Iraq’s were. What’s more, they are consolidated with the government. The Islamic Republic of Iran carefully appealed to and restructured the Shah’s armed forces so as to absorb them into the regime. These and factors of geography suggest that overthrowing the Iranian government might be harder than in Iraq. The U.S. probably can accomplish it, but the battle may take longer, be more bloody, and require a large contingent of ground troops. After the military "victory," the real problems of occupation might begin as in Iraq. These sorts of scenarios deter the full-scale approach. They leave the air strike option, but that can lead to oil supply disruption and a full-scale war anyway.

The military forces of both sides and the rulers of both sides can think through these factors, and they have better information. This analysis implies that rational U.S. military officials uninfluenced by political pressures will most likely heavily caution against invading Iran and against an air strike as well. They might endorse it as a last resort if there was a significant Iranian threat that could not be handled by other means, but there isn’t any such threat at present. However, the U.S. military is not making the decisions.


What’s going on at present is a series of bluffs, threats, moves and countermoves by both sides designed to keep the other side off balance and gain some advantage. If the U.S. makes a war out of the current situation, there is no just or legal basis for it. The U.S. is neither being attacked nor threatened, nor is any ally being attacked, nor is Iran preparing to launch an imminent attack. Starting a new war against Iran will enmesh the U.S. in the Middle East even more than now. But our rulers may see it as a way out of the Middle Eastern briar patch. Instigating war now will solidify the doctrine of preemptive war. It will complete the destruction of what’s left of civilized restraints on war-making.

For the moment Iran will continue to stand up for its treaty rights. It will continue to taunt the U.S. and then stand up to it. This helps Ahmadinejad politically up to a point and fits in with Iran’s aim of not being dominated. If he goes too far, other powers in Iran will pull him back.

What President Bush might do is another matter. He has identified Iran as an enemy. In his mind, he has justified taking action against it. He believes that this is a commitment, a calling, and a responsibility. He believes that it is reckless if he does not do so. He is not a man especially sensitive to existing legalities. He prefers to make up his own. He is not chastened by the Iraq experience. He may be encouraged by it. Bush may be letting the clock run, moving troops out of Iraq and Europe while preparing to take out Iran and awaiting the politically opportune moment to do so.

Michael S. Rozeff [send him mail] is the Louis M. Jacobs Professor of Finance at University at Buffalo.

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