Iran Under the Ayatollahs, by Dilip Hiro. Boston: Routledge & Kegan Paul. 416 pp. $39.95. ON Oct. 31, 1978, the Iranian oil industry was paralyzed. Tens of thousands of employees went on indefinite strike, shutting down production and depriving the government of an estimated $74 million a day in revenues. The boycott came in response to an appeal by Ayatollah Ruhollah Khomeini, who, though exiled thousands of miles away in Paris, had emerged as a potent rival to Shah Muhammad Reza Pahlavi. The same day in Washington, President Jimmy Carter welcomed the Shah's son, Reza Cyrus, at the White House on the occasion of the teen-ager's birthday. The President's greeting was effusive: ``Our friendship with Iran is one of the most important bases on which our entire foreign policy depends.''
October had been a disastrous month for the Pahlavi dynasty. Demonstrators willing to defy martial law paraded through several cities shouting their hatred of the Shah. They were confonted by security forces, resulting in new names for the growing list of ``martyrs'' since trouble had first erupted 17 months earlier. Other boycotts had closed 50 major manufacturing and service establishments, including hospitals, banks, and government ministries.
Iran was in the final throes of its revolution, with the climax less than four months away. But Washington had not yet accepted the finality of what was one of the most powerful revolutions of the century and instead was grasping at ways to keep a major ally on the Peacock Throne.
One of the most frightening miscalculations in United States foreign policy in the postwar era was not solely the fault of the Carter administration. As Dilip Hiro's latest book, ``Iran Under the Ayatollahs,'' outlines, the 1979 revolution, which ousted a dictatorial monarch in favor of an Islamic republic, had long been in the works. Indeed, it was almost a natural reaction to a 35-year sequence of events in which the United States had played a major role. And various warning signals should have made t he revolution obvious.
In 1963, after the Shah announced plans for the White Revolution, designed to transform medieval Persia into 20th-century Iran, Khomeini was already at the forefront of dissent, arguing that these plans violated the nation's Islamic traditions.
``You miserable wretch, isn't it time for you to think and reflect a little, to ponder where all this is leading you?'' Khomeini demanded of the Shah 16 years before the revolution. ``Mr. Shah, do you want me to say that you don't believe in Islam, and kick you out of Iran?''
Islam is unique among monotheistic religions, because politics and religion are inseparable. That fact alone should have made both the Shah and his Western supporters more sensitive to the problems of the proposed rapid modernization and the influx of Westerners and Westernization that accompanied it.
That also explained why attempts to push the White Revolution and subsequent development plans upon the Iranian masses backfired. ``The Shah's increasing authoritarianism and repression of the Ulema [council of religious elders] and the rush of modernism made ordinary Iranians more, not less, religious,'' Mr. Hiro explains. In the process, Islam became the idiom of opposition.
The religious backbone of the country and the 1979 revolution are still underrated, often tied to the persuasive personality of one man, Ayatollah Khomeini, rather than to centuries of tradition. Too many in capitals both East and West still feel the Islamic republic is a mirage that will pass away with the Ayatollah.
But the rule of the ayatollahs (high-level clerics) has now survived as an independent force in a bipolar world for six years. And, despite its problems of war and isolation and its record of domestic brutality, the Islamic republic has established a model admired elsewhere. ``What Iran has shown to the Muslim states of the third world is the third way of Islam, quite apart from the Eastern or Western path. In a world riven with superpower rivalries and tensions, it is an attractive proposition,'' says Hiro.
Over the past year, Iran has become one of the most popular subjects in the publishing world. Several new books examine different aspects -- US-Iran relations, the dynamics within Iran since the clergy's takeover, the Gulf war, and Shiite Islam, the sect that dominates in Iran.
Hiro's history covers developments internal and international involving Iran from World War II through to the present war with Iraq and the internal power struggle. Although there is little new information for specialists and it lacks the interpretation of other recent books, ``Iran Under the Ayatollahs'' is a thorough account of a crucial era still widely misunderstood.
Hiro has made three trips to Iran since the revolution, unusual exposure for a Western-based reporter. But he treats the events and characters with neutrality. The vacillation by the Shah between repression and reconciliation attempts during his last desperate days are as evenly portrayed as the shrewd and ruthless tactics of Ayatollah Khomeini. Unfortunately, the vibrancy and authenticity of the author's own experiences traveling through Iran are missing from the book. Instead, it appears he has often patched together the reporting and reflections of others.
But there can be no disputing his conclusion, which needs to be understood by both policymakers and laymen to avoid repetition of past mistakes. Hiro predicts: ``Whatever else might happen after Khomeini's death, Iran will not revert to monarchy, whether constitutional or absolute. And it will not acquire a political system which excludes the clergy.''
Robin Wright is a former Beirut correspondent for the Monitor. Her book, ``Sacred Rage: the Wrath of Militant Islam,'' will be published by Simon & Schuster next month.