The Reforms of the Pahlavis Edited and Prepared for the Internet by Iraj Bashiri copyright ©, 2004 Bashiri

Introduction

The Allied Forces occupied Iran in 1941. The occupation, which lasted until the end of World War II, left Iran's economy in a shambles. Although the Allies promised to help Iran regain its pre-War status, only the United States responded to Iran's needs by introducing a number of aid packages.

In the early 1950s, Muhammad Musaddiq undermined British influence in Iran by nationalizing the oil industry and by expelling the British oil workers from Iran. To some degree, the vacuum created by the departure was filled by the United States. Muhammad Reza Pahlavi, seizing this opportunity, furthered some of the projects that his father had started. As a result, between 1950 and 1968, when the United States cut its aid program to Iran, Point Four and the Red Cross rebuilt a considerable part of Iran's destroyed infrastructure. In fact, to be more precise, during this period, four major reforms were undertaken, each of which had a particular developmental goal in mind.

The first plan was implemented between 1949 and 1956. The seven-year plan was devised to increase the levels of production and exports. It was also to make the country self-sufficient and to improve public health. The following were some of the more specific goals of the plan with an estimated percent of the budget for each: development of agriculture and industry (28%), exploration and exploitation of mineral resources, especially oil (20%), development of means of communication and transportation (29%), and raising the country's general income (23%). Needless to say, due to the nationalization of the oil industry, the plan failed. Two of its important irrigation projects, however, were carried out. One was the completion of the Karkha Dam in Khuzistan and the other was the completion of the Kuhrang Tunnel in the Bakhtiyari region.

The second plan, also a seven-year development plan was implemented between 1956 and1962. It was partially financed from oil revenues. The projects included in the plan were mostly the same as those for the first plan: communication (35%), agriculture (22%), regional development (14%) social welfare (13%), and industry and mines (8%). Additionally, three large dams-at Karaj, Sefid Rud, and Dez, and a number of smaller dams--were also constructed, boosting agricultural productivity to a high level. On the whole, however, due to a recession between 1961 and 1964, this plan, too, failed.

During the third development plan (1962-67), which was a five-year plan, a division was made between government and private enterprises so that power, transportation, communication, and steel and petrochemicals went to the government and the rest was all given up to the private sector.

The aims of the fourth, also a five-year plan (1968-1973 was to improve the standard of living, increase the rate of the growth of the GNP through industrial productivity, expand scientific and applied research, and introduce means to achieve an equitable distribution of income by providing social welfare services. Both local development in rural areas and social security and social insurance were included in the package.

Throughout the creation and implementation of these plans, the reformers kept two distinct goals in mind. They wanted: a) to make sure that, once implemented, the reforms would decrease Iran's dependence on foreign sources of supply by producing foodstuff and consumer goods of her own, and b) to diversify Iran's export goods by expanding the old markets and by finding new ones.

As we have seen, during this period, the country saw four developmental plans in action. It was, however, the first two plans that brought the problems of the nation into focus. in 1962,when the second plan was completed, it became apparent that the entire economic structure had to undergo a comprehensive overhaul. Without that, it was concluded, it was impossible to exploit and utilize the country's resources in ways that were most beneficial to the prosperity of the nation as a whole. Aided by American planners, therefore, a six-point reform bill (later expanded into twelve) was introduced into the Majlis. When the Majlis did not agree with the Shah's proposed plan, he placed his reforms in front of the people in the form of a referendum. We shall discuss those reforms in greater detail further below.

 

The Reforms of Reza Shah

Both Reza Shah and his son, Muhammad Reza, implemented reforms;

Reza Shah's reforms are usually interpreted as an attempt at modernization while his son's are characterized as an attempt at building "A Great Civilization."

Before 1963, in preparation for the implementation of his plan for the White Revolution, the Shah planned to distribute the lands that his father had confiscated from peasants, the so-called "Crown Lands." The Majlis considered the bill but did not pass it. In 1963, therefore, the Shah took the matter to the people in what he called a "Revolution from the Throne" or the "Revolution of the Shah and the People." In selling what popularly came to be called the "White Revolution," he argued that the Iranian people have been deprived of equality, freedom, and justice. Furthermore that his democratic, speedy, and national development plan would restore to the people rights that they should have received a long time ago. He introduced all this with a particular keen sense of urgency, emphasizing that little time is left to allow the evolutionary processes to take place. On January 26, 1963, the Shah placed his reforms before the nation in a Referendum.

We shall discuss the reforms of Reza Shah first, followed by the reforms of his son. It becomes apparent that both father and son worked hard to make Iran prosperous. They also worked hard to keep themselves and their cronies well off and in control.

Land reform, which created the most commotion in 1963, was actually nothing new. It had already begun under Reza Shah. In 1932 and 1933, the Majlis passed a bill to distribute state-owned lands in Luristan, Sistan, and Dasht-e Moghan. Following that, between 1935 and 1937, those lands were sold to farmers either for cash or in long-term installments.

The difficulty that the reformers faced at that time was that the farmers were not familiar with either the needed technology to work the land themselves or understood the significance of owning a plot of land. Consequently, after holding to the land for a few months, they returned it to the original owners.

Between 1950 and 1958, Muhammad Reza distributed the Crown Lands, as a result of which 500,000 acres of land was distributed among 25,000 families. This time, however, a Rural Development Bank was established to help create cooperative societies, finance purchases of farm equipment, drill deep wells, build qanats, and provide credit.

Neither were Reza Shah's reforms restricted to a particular aspect of life in Iran. He centralized Iran, created Iran's first standing army, and instituted a regular budgetary system for yearly expenditures. And, to his credit, he did all that without foreign assistance. At the time, there were no substantial oil royalties, yet transportation under Reza Shah received a tremendous boost. The trans-Iranian railway, joining the Persian Gulf to the Caspian Sea (850 miles) was completed in1938. The railroad was built from taxes ($140,000,000) that were imposed in 1925 on sugar and tea. In fact, between 1930 and 1940, many more road-building projects were completed, as were many sugar, cement, and tea factories, and rice mills. With ownership of 8 sugar refineries, it would be correct to say that Iran became self-sufficient in sugar. The same could be said for textiles, and cement, and light consumer goods including various types of soaps, glass, paper, matches, and cigarettes.

Reza Shah paid special attention to labor. Under him, Workers received a bonus on special occasions such as the Nowruz (Persian New Year). But, there were no hard-and-fast rules for systematic promotion in rank or a merit-based wage increase. It all depended on the discretion of the factory owner. Neither was the number of hours per day (8) or per week (48) regulated. There were no child labor laws (not under 12), and there were no insurance or job security policies.

Female suffrage was of particular concern to Reza Shah. The first real reform came in 1935 when he abolished the wearing of the chador (veil).

Also in the same year, university education became co-educational. Women, however, did not have the right to vote. Only the upper classes had the right to vote and thus filled the ballot boxes. Unsavory as it is, women were ranked with fraudulent bankrupts, beggars, murderers, and thieves who, according to the Shari'a, had no real rights.

The other thing that got a real boost under Reza Shah was education. The Ministry of Education was established in 1910. By 1921, some 1,400 students had been taught. Reza Shah ordered an overhaul of both the teaching methods and the courses. He ordered European curricula to be examined and new courses to be devised. As a result of these efforts, schools became uniform. Then free tuition in primary schools was introduced (1933). In 1935, the University of Tehran was founded, adult literary classes were established, and grades 1-3 became co-educational. By 1941, there were 400,000 students and 12,000 teachers in Iran. Most importantly, illiteracy was recognized as the number one stumbling block on the way of Iran's progress.

The Reforms of Muhammad Reza Shah

We have already mentioned the reforms that Muhammad Reza Shah implemented as a preliminary to his "White Revolution." In what follows the articles of the White Revolution are discussed in two sets. The first set of six reforms, introduced in 1963, was implemented immediately. The second set, which was introduced later, received much less enthusiasm. In fact, some of the last ones were barely formulated. In the speeches of the monarch, they remain as plans yet to be realized.

Phase One

Point One

After more than fifty years of liberal effort there was hardly a village in the nation where a child knew how to write his own name or read the headlines of a newspaper. Most farmers in the remoter villages had never seen a doctor. Justice, even for the not very remote villages, largely meant the landlord's bastinado. In fact, the tax collector was the only government official who ventured into a village. Of the country's 60,000 villages, the big landlords owned some 10,000. Most of the remaining villages belonged either to religious endowments or to smaller landlords who owned one or part of a village. Independent farmers owned only 15 percent of the arable land.

The large landlord was invariably an absentee landlord. He lived in the city, drained the countryside of its wealth, and returned little to rural construction. The landlord was traditionally responsible both for the water system and the roads. The roads he generally neglected, but the qanats, which often took generations of diggers to complete and which were relatively expensive to maintain, were the landlord's major contribution not so much to agriculture, but to his own higher profit. At harvest, the landlord collected most of the crop. He collected a fifth as land rent, another fifth for water fee, and a third fifth for the price of his seed. The tenant received a fifth of the crop, but the amount varied with the geography of the country and ancient local custom. Traditionally, in addition, the farmer also received another fifth for his oxen that pulled the wooden plough and aided in the threshing. Some farmers provided nothing but labor, while others in addition might provide, all, or part of the seed. Given that the average landlord had between 6 and 60 villages, it becomes obvious that his annual income was enormous.

The village merchant in return for such household provisions as sugar, tea, shoes, and cloth bought the farmer's share. The farmer was helped in subsistence through his own vegetable plot, and in the winter months, through handicrafts.

Soon after ascending the throne, the Shah advocated that the landowners should transfer investment from land into industry, and that they should help the farmer to stand on his own feet. In 1950, he decreed the division of the Crown Estates. The land was sold in small installments and at a low cost to the farmers who worked it. After 1956, all farmed public domain parcels of land from which the government drew revenue were also distributed.

Furthermore, the distribution was followed up with specially devised programs and services. Using the returns from the farms, the government set up cooperatives for purchase of seed and fertilizer, as well as the repair of qanats, food processing plants, and packaging and marketing instruments. It was assumed that a farmer with a mechanized farm would have more time to socialize, read and become knowledgeable about the world. The family, too, would gain some time to revive traditional handicraft and textiles.

Within five years the redistribution of the land was completed. The transition was quite smooth. The land was not expropriated but transferred against compensation in 15 annual installments. If the farmer could maintain the same level of production, his immediate gain in annual income would be about 33 percent. In addition, he would benefit fully from any increase in production. The landlord, too, had an opportunity to invest his released capital in the new industries.

In six years, land reform went through two distinct stages: In the first stage each landlord was entitled to one village, the remaining villages were turned over to the Government for distribution to the farmers. To simplify the procedure, the farmers received very much the same plots of land that they had been working. This initial stage was designed to destroy the feudal landlord system. Affected were 14,266 villages with 18 percent of the best arable land in the country. This land was distributed to 581,817 farm families, each with a minimum of five hectares. The first stage directly affected 22 percent of the rural population.

The second stage brought religious endowments and the one-village landlords into line with the rural revolution. Each landlord, the former large landlords and those not yet affected, could keep a maximum of 30 to 150 hectares, depending upon the fertility of the area. The remaining lands could be either shared with the farmers, sold to them outright, or leased. Over 90 percent chose the last alternative. In the case of private individuals, the lease would be for 30 years at a fixed annual rent, while for religious endowments the land leases would run for 99 years on the same terms.

In this second phase some 53,605 villages, plus 18,931 farms, were directly affected. These were distributed among 2,317,330 farmers. These farmers and their families totaled 11,422,160 persons.

At the end of the second phase, the bulk of the Iranian farm population emerged as independent farmers. They had title to the land they worked either in the form of an ownership deed or a long-term lease. A rural cash economy replaced barter.

The third phase made the new farm units as viable as possible by replacing other medieval remnants with modern systems, particularly in the fields of credit and marketing, of modern farming methods, suitable agricultural machinery, extensive use of fertilizer and pest control. The result was 8,000 co-operatives, or an average of one for every six villages. By the end of 1966, these co-operatives had a combined capital of over $13 million. Designed as multi-purpose co-operatives, they purchased seed and fertilizer, directed the repair of the qanats, and marketed the produce.

The nationalization of the forests was a conservation and development measure. Over the centuries, more than two-thirds of Iran's forests were destroyed. The remaining third was mostly scrub oak and tamarisk. Only about a million hectares of hardwood were available for commercial use.

Most of the decimination had occurred relatively recently. Only within the last 100 years, ten million hectares of forest in the Zagros Mountains had passed the point of no return. The great juniper forests of Khorasan, about one million hectares, were decimated within the same period.

The enormous coniferous forests that stretched along the northwest to the Iranian terminus of the gas-delivery line to the Soviet Union at Astara, except for some isolated stands, are now almost all gone. Before nationalization, the nation's major remaining timberlands on the northern slopes of the Alborz Mountains were also on the way to the charcoal bin. In other words, exploitation in the modern period has been ruthless, with little, if any, concern for the future.

Nationalization, of course, could not happen without prior preparation. For at least a dozen years preceding nationalization, scientific forest management techniques were studied and attempts were made at using the best technology available. Additionally, more than three quarters of the nation's forests were privately owned.

Through nationalization, some 18 million hectares of forestland came under the direct control of the Forestry Department. This action made regional forest planning a real possibility. After all, Iran was exporting about a million dollars worth of special hardwoods per year and imported an average of about $50 million. With proper development methods, the amount of imports was decreased while the amount of exports increased proportionally.

A system of licensing was introduced, and using modern forest management techniques, aerial mapping of the major forest areas became possible. This method facilitated both felling schedules and the creation of access roads, fire lines, and the like. At the same time, adding a unit of Armed Rangers strengthened the Forestry Department. A college of Forestry with a five-year, university-level course, was set up in the Karaj Agricultural College, graduating 60 professional foresters per year. A Forest Ranger school was also set up in Gorgan.

Other programs initiated at the same time included afforestation, a project to replenish the stock and another project to create national parks. Furthermore, cities, especially Tehran, introduced schemes of their own. For instance, some 200 hectares near the Mehrabad International Airport were planted with conifers and broadleaf hardwood, and some 500 hectares were planted on the barren hills between Karaj and Tehran, above the new superhighway.

The poplar is a major species used in the Iranian wood industries. Some 36 factories make matches from poplar trees. The tree is also used for crating dried fruit. It is used in constructing traditional village roofs, and as scaffolding for urban constructions. It has further uses in the manufacture of paper and plywood.

Improved charcoal-making methods, including modern portable kilns utilizing waste branches of felled trees, have been gaining acceptance. Cheaper kerosene, now available in the villages through bulk purchases by the cooperatives, is relieving some of the pressure. Bottled butane gas to fuel modern cooking ranges is gaining popularity in the cities.

The turning point in conserving Iran's forests was reached with nationalization. Rebuilding the forests is more than a single-lifetime job; changing grazing methods, cooking and heating techniques and the provision of acceptable economic alternates without involving investment beyond the resources of the farmer and householder--all of them processes that necessarily take time.

Point Three

Over several decades, the Iranian government had built some 208 factories to meet the essential needs of the country. By 1963, these factories were running at a considerable loss to the state. Reformers advocated that these factories be sold to the landlords to free capital that could be used for the mechanization of agriculture, a prerequisite for which is a strong industry. To persuade Iranian landlords to participate, the government guaranteed an annual dividend of 6% on all shares.

The government scarcely expected the landed gentry to become dynamic industrial entrepreneurs overnight, and in the absence of an organized industrial investment market, shares in government factories were seen as a first step towards a local stock market and an introduction to industry.

The government factories, which were being released to public participation, were originally built to point the way to industry. Between the two world wars, the government had entered some industries as a monopolist, largely to obtain government revenues to force the pace of national modernization. Traditionally, the monopoly industries were petroleum, which proved to be a growing, major source of national income, sugar, tea and tobacco. The Trans-Iranian Railroad and a number of other development projects came into existence as a result of using the revenues from tea, sugar, tobacco, and caviar.

It is true that the government participation imposed a certain restriction on the range of industries for the private sector, but the government's share was the smallest fraction of the vast field of opportunities that was open. To push the pace of industry, the government entered other fields of industry as well, but simply to establish basic factories which would meet pressing local needs in the absence of entrepreneurship in the private sector. These included such fields as textiles, food processing, glass, chemicals, and building materials. The government also set up power stations and waterworks. It was these factories, which, as a group, were to be offered to the public.

At the time of the reform the government operated some 208 establishments outside the traditional monopoly industries. Of these, more than half (108) were municipal electric power stations. Included in the list were the royal mint, government printing-houses and municipal waterworks. As a group they ran at a net loss, largely because the majority had a public service and welfare rather than a revenue producing function.

To achieve the reform, the public utilities and some other non-profitable enterprises were left out. The list was narrowed to a dozen major factories. In the final analysis, half a dozen profitable sugar refineries, a major textile plant, a large cement factory, a brick factory, two edible oil-processing plants, and a large cannery for agricultural produce were offered. The shares were at 1,000 rials each.

A dozen factories have little significance in themselves, but the move underlined a major change in policy. The government henceforth would concentrate on establishing industrial poles in promising areas throughout the country, creating all the necessary preconditions of industrial development: roads, ports, airports, telecommunication, cheap power in the form of hydro-electricity, petroleum fuels and natural gas, while decentralizing the government, modernizing municipal administration with a broader range of more efficient public services, increasing literacy and setting up more vocational-training centers. In other words, integrated action would be taken in specific areas of the country to meet all the desirable pre-conditions of advanced industrial development.

The government entered directly into industry only where insufficient private investment was forthcoming in basic industries such as steel and petrochemicals, and then only to create the conditions for the establishment of numerous satellite industries by the private sector of the economy.

As a result, the idle capacity of some 250 large factories in the private sector was absorbed by increased production, keeping prices stable as new money was pumped into the economy. Government policy in tax-exempting machinery and the import of intermediate goods further encouraged the establishment of new industries. The movement started relatively slowly, but with increased confidence in the stability of the economy, private investment began to increase dramatically. In 1963, the number of new factories increased by only 5% over 1962 as the base year. But by the end of 1965 the index had risen from 100 to 156 and investments by the private sector were up in the same period from 100 to 209. In 1965, the Ministry of Economy issued 596 permits for new factories, representing private investment of over $100 million. Imports, too, were up; their composition, however, had drastically changed. In 1962, some 42% of imports were consumer goods, but by 1965 this had been sliced exactly in half to 21% despite a rise of some 30% in the total value of imports. More than half of all imports (53%) were intermediate goods and raw materials. Together with capital goods (23%) this represented imports of over $625 million. The change occurred largely through the creation of import-substitution industries in favorable fields.

At the end of 1965, a sizable exhibition of Iranian made industrial products was held. Over 90% of the products at the exhibition had come into production within the past decade. They included automobile, truck and tractor assembly with locally-made parts, radio, television, and refrigerator assembly with locally made parts, gas ranges, water heaters and air-conditioning units, shoe-making and leather products, a wide range of textiles and knitwear, chemicals, pharmaceuticals and cosmetics, furniture and office equipment, plastics, oil and petrochemical products, chinaware, porcelain and crystal ware, and a burgeoning packaged foods industry including biscuits, chocolates, canned preserves, bottled milk, beverages, tinned meat, fish, fruits and vegetables.

Seen against the state of industry before the reforms, the Iranian Industrial Exhibition was highly promising. Agriculture obviously remained the primary productive occupation of the majority of Iranians but the volume of investment in industry was on the rise. New employment opportunities were being created both for capital released from the land and for farmers who had migrated to the cities.

Point Four

The day is not far off when the farm family will no longer form the majority of the population. Within twenty years there will probably be more people living in crowded Iranian cities than now live in the whole nation.

Today, some 75 percent of the population lives in rural areas. But many of the villages are virtually suburbs. If these suburban villages were added to the population of the urban centers, we could argue that half of the national population already lives within commuting distances of urban centers. As the industrialization of the nation gains momentum, a large part of the outlying population will be drawn to the centers in search of factory work. Besides, the population of cities is growing at some three times the national birth rate. In other words, literally millions of new jobs must be created to meet the needs of a rapidly increasing urban population.

Ideally, productive jobs rather than 'make-work' schemes must be provided for the gainful employment of these new townsmen. Just as the farmer must learn to apply modern technology on the land, so the urban worker must be encouraged through incentives and skills to become equally productive in the factory.

It is the government's policy to encourage capital formation in the private sector leading to more dynamic enterprises and a higher level of private investment in industry. As capital builds up, the basic needs of the worker, aside from the obvious, need to develop skills, must be considered from a long-term point of view. This brings us to the reality that the highly developed skills command relatively high salaries, while the lower level manual and semi-skilled labor loses, especially when there is an enormous over-supply of labor.

As a remedy for the problem, labor was given a direct share in the nation's growth, not simply through the creation of more jobs, but through linking greater efficiency in work with an immediate gain in income. Consequently, the industrial workers received, above their basic salaries, as much as 20 percent of the net profits of the factories in which they worked.

In 1966, there were some 340,000 productive establishments in Iran, mostly small, employing an average of less than three workers. Many of these marginal producers were absorbed into larger units because their laborers were illiterate, unorganized, and without written contracts with their employers.

In working out their agreement with employers, there were two choices: bargaining for a flat share of the net profit, not to exceed 20 percent and improving production capability. The immediate benefit came to workers in well-organized factories where the worker-output was about equal to the output of the Swedes, Germans or Americans in a similar job with the same tools.

It was these efficient factories, mostly large, modern enterprises with production rationalized into a number of coordinated workshops, that set both the salary and production norms and served as models for the smaller, independent workshops.

Obviously, wage incentives by themselves cannot overcome poor management, lack of forward planning, design defects, or a poor marketing organization. Yet, many improvements were made in production techniques when the workers were enthusiastic about their jobs. The result of the reform was the saving of many small workshops by improved worker efficiency, without calling on further investment or outside technical help. Where a productive enterprise was geared for growth, with its various departments well organized and properly equipped, the profit sharing incentive continued an already existing momentum.

The most important aspect of this reform was in that the workers gained a degree of respect for their work-stained clothes, a respect hitherto shown only to those who worked at a desk. The solution, of course, was in vocational-training schools, factory-organized training programs, and wage incentives based not simply on telling someone else what to do, but in participation and getting the job done. Today in advanced factories, a job on the bench gives as much dignity, purchasing power, and satisfaction as a job at a desk.

Point Five

When Iranian women discarded the veil in the early 1930's, an Air Force sergeant put it bluntly, "Now we can see what they are up to. Before you could pass your own sister in the street and not know whether it was her, or where she was heading."

Not only did women become visible, but got on the move very quickly. Some found the hairdressers, the cosmetic counters, and the shoe shops, while some others went to school and established a career for themselves. Many men, of course, were leery about allowing women to become educated. Education, they thought, might make them feel independent, or allow them to assert their opinion, or persuade some to concern themselves with creating a better world. Some might even entertain the notion that women should have the right to vote.

Women and farmers, it can be argued, were being treated in the same fashion. They were deprived of education so that they would remain ignorant and, thereby, dependent on the urban male minority that enjoyed all the rights. But while the tenant farmer was largely isolated from modern social developments in the cities, the young urban girl found herself at the center of rapid change. There was a growing need for teachers, typists, and secretaries. The new hospitals were calling for nurses, department stores for sales-girls, jobs for waitresses were opening, the textile mills were employing women, and there was certainly a need for skilled hairdressers and seamstresses. Women became doctors, social workers, chemists, engineers, some with odd titles as paleontologists, or political anthropologists. Others distinguished themselves in astronomic research, architecture, or the graphic or plastic arts. That such women should have no vote, while the largely illiterate tenant farmer had one, was one of those ironies of society.

The fifth point ensured free and fair elections, revising the electoral law to incorporate the structural changes that were taking place in society. The original electoral law, dating from the 1906 Constitutional Movement, provided for supervisory councils to be established in every constituency to rule on the eligibility of candidates, to watch over the voting, count the votes and examine post-election complaints. The same law required that these councils be composed of representatives from each of several social and professional groups including the clergy, the professional class (doctors, university professors, lawyers), guildsmen, landlords, merchants and nobles. The new electoral law abolished the seats on the supervisory councils allotted to nobles and landlords. These seats were given to workers and farmers. As a result, two women senators and five National assembly deputies were elected. They were active not only in championing the cause of women but also in supporting improved legislation in all fields.

Point Six

Iran in the 1960s required the broadest base of literacy achievable within a short time. That would enable the reformists to effect democratic change, build new institutions to replace the feudal landlord system, help new land-owning farmers understand the program of rural reconstruction, and to develop enthusiasm for vigorous self-help efforts needed to overcome age-old inertia, apathy and fatalism. For that reason, rural education was made a fundamental part of the White Revolution.

But literacy, interpreted simply as elementary schooling in preparation for accumulated knowledge, is a sterile proposition. The wooden plough, the antique farming methods, and Iran's medieval living conditions all had to be changed at the same time that new skills, such as reading and writing, were being introduced. In other words, people had to become literate in a functional way so that they could become active participants in their rapidly developing society. After all, a functionally literate person has not only practical knowledge and useful skills, but also the mental processes required to make the changing world around him intelligible and manageable. Besides, functional literacy, as will be shown below, is not beneficial to the village alone. It has great consequences on the lives of the urban dwellers as well.

Again, in the 1960s, Iran had great difficulty in expanding the production of domestic factories to the full potential of the home market because the majority of the poor and illiterate lived in the farming villages on a subsistence level in an essentially barter economy. As long as there was not a sharp rise in rural income and living standards, Iranian industrial production was necessarily confined to a market made up of some urban dwellers, i.e., a small fraction of the population in the urban centers could afford to buy home-made industrial goods. This market was too small to support local industry on an advanced scale. The resulting dilemma was one that is common to many developing countries: a large, backward, neglected population in the countryside, and growing cities with insufficient jobs, along with an increasing number of unemployable high school graduates unfit for manual work.

To stem the tide of illiteracy and to turn high school graduates into useful agents of change, a portion of the army budget was redirected and some major army logistical facilities were redeployed. In fact, every ministry of the government was required to divert part of its operational funds to the task, as well as supply specialists as teacher-trainers, and to co-ordinate its rural programs through the teacher on the village level. This concept transformed the schoolhouse into a center for rural change and development. Similarly, the schoolteacher was transformed into the agent of revolutionary innovation, functioning both as literacy teacher and multi-purpose village-level coordinator. They wore the uniform of the peaceful revolutionary army, carried no gun, only a far more persuasive field pack full of school texts and pieces of chalk.

The result was the Literacy Corps. Draft-age Iranian high school graduates, inducted into the army for military service, could elect to serve in the education of the people rather than to perform routine military tasks. In the Literacy Corps, the Corpspersons served as sergeant. They were given four months of intensive training before they were sent for 14 months to teach in a village. At one of the 21 centers throughout the country they were put through a syllabus of 372 hours of military training and 336 hours of instruction in the subjects they taught. The military training was largely an effort to instill discipline, to put the sometimes very soft city-bred recruits through the rigors of open-air life, to build up their physical fitness and esprit de corps. The teacher training consisted of instilling teaching methods, while being briefed on basic information in agricultural techniques, public sanitation, village law, and community development. The corpsperson's training ended in a battery of tests. The candidates who passed successfully received the rank and pay of sergeants, and were sent to the Ministry of Education for assignment.

The Literacy Corpspersons were welcomed with open arms by a village that had suddenly come alive with a new promise. A sheep was slaughtered to celebrate their arrival, wild rue was burned in their path to ward off the evil eye, flags flew, the pipes and drums of the village minstrels, previously dusted off only for weddings, peeped and rumbled, and the boys and girls kicked their heels in the folk dances of the region.

For the young recruits, fresh from high school graduation and with little prospect of an immediate job, this was a godsend. The new job took them off the streets and put them where they could be of some use. In other words, their whole life was given drama and purpose. By building the new schoolhouse and receiving their new teacher, the villagers, too, were taking an active part in the revolution. Neither were the teachers alone. In their efforts, they were aided by several mobile teams all trained in a similar fashion to overcome problems in sanitation, to resolve engineering difficulties in building a feeder road, to set up an Equity Court to fill the vacuum created by the disappearance of the landlord's agent in settling disputes, to help develop effective co-operative organizations, and to improve agricultural productivity through the introduction of improved farming techniques. In essence, a whole army of like-minded engineers, doctors, and jurists supports the Literacy Corpsperson who advances in the front.