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As Wordsworth found in Paris after 1789, revolutions are deeply enthralling. There is nothing so bold, so self-sacrificing, so brave, so cruel as a revolutionary crowd. What’s more, revolutions have shaped the modern world. The European Union has been transformed by the overthrow of Marxism-Leninism in eastern Europe, while the near-revolution in Tiananmen Square in 1989 feeds the neuroses of the Chinese Communist party to this day.

Yet in some ways it was a revolution 10 years earlier that has been even more formative for our times: the overthrow of the shah in Iran. That, indeed, was a genuine revolutionary archetype on the 1789 model: barricades in the streets, crowds armed with old hunting rifles and kitchen knives facing up to the tanks (British-made, naturally); palaces, barracks and secret police headquarters stormed and sacked, the uniforms of the shah’s supposed “Immortals” lying on the ground, abandoned in utter panic. I even came across the ultimate revolutionary image: the body of an unfortunate cop hanging from a lamp-post. Squeamishness back at the BBC in London meant the shot wasn’t used.

The overthrow of the shah’s dynasty had deep roots: heavy-handed British and American imperialism going back decades, the vast wave of corruption created by the oil price rise after 1973, the shah’s own neurotic indecision, the brutality of the Savak (which, much as in the French and Russian revolutions, proved to be a moon-cast shadow of the incoming regime’s repression).

When the revolution happened, it electrified Muslims everywhere: they saw it was actually possible to stand up and overthrow the chosen instruments of western policy. But Iran was a Shia Muslim country, outside the mainstream of Sunni politics and thought, and the revolution had a particularly powerful effect on Shia communities, especially in Lebanon, where Shias in the south of the country had been an underclass since the Crusades. Suddenly they were conscious of a new strength, and Hezbollah was formed to resist Israel’s encroachments. Half a century on, Hezbollah is one of Israel’s major enemies; while Iran itself has taken on the combined might of the United States and Israel and proved a formidable opponent.

The history of the Iranian revolution has been written many times, but I haven’t found an account as clear and free of preconceptions as Homa Katouzian’s. Katouzian is a major historian, but he is also a polymath – an economist, a political scientist and a respected literary critic. Nowadays he is an honoured figure at St Antony’s College, Oxford, yet what I particularly enjoyed was the occasional moment when you feel you’re in the presence of the young man he once was, looking on, Wordsworth-like, as the history of which he would one day be a master was being made.

This business of being an onlooker is important. Far too many diplomats, British, American, French, German, were shut up in their embassies, listening to the reassuring intelligence pumped out by the shah’s agencies. The only British diplomat I knew who understood the seriousness of the shah’s situation was a young man who was allowed to live outside the embassy with his Iranian girlfriend. Foreign journalists, who spent their days talking to ordinary people, foresaw the coming collapse most clearly. As late as November 1978 several western embassies, including the British and American ones, were reporting back to their capitals that despite everything, the shah would outlast the revolution.

But then, as Katouzian makes clear, the political convulsion in Iran didn’t conform to western ideas. Iran, he writes, “was a society in which change – even important and fundamental change – tended to be a short-term phenomenon. And this was precisely due to the absence of an established and inviolable legal framework which would guarantee long-term continuity.” At present, of course, the west itself faces a rather similar process in Donald Trump’s United States, where law and policy must adapt themselves to whatever Trump says they should be at any given moment. But if there are occasional similarities between the shah and Trump, the shah’s all-pervasive insecurity has absolutely no echo in Trump’s armour-plated certainty that he is right, no matter how often and how radically he changes his mind. What links the two men is their ability to govern by whim alone. It brought the shah down; it may well clip President Trump’s wings after this November’s midterm elections.

All revolutions are accompanied by a degree of self-deception: without that, they would never succeed. Katouzian gives the best description I have seen of the odd alliance between the rebarbative ultra-conservative clergy and the leftwing Iranian intellectuals who managed to persuade themselves that Ayatollah Khomeini’s return to Tehran would open the door to democracy, liberty of expression and true socialism. “Why are you so bloody optimistic?” I asked a British-educated former member of the Majlis, or parliament, who had just got back to his flat, sweaty and exhilarated, from welcoming the Ayatollah in the tumultuous streets of Tehran. “Anything is better than the shah,” he answered, “and Khomeini will be easy to get round. He’s just a bigoted old ignoramus, after all.”

Having met and interviewed Khomeini outside Paris at Neauphle-le-Château a couple of weeks earlier, I wasn’t convinced, and I was right. My friend died in Evin prison a year or so later, in a way I prefer not to think about; Khomeini stayed in power until his death 10 years later, and handed on the system which has lasted, largely unchanged and certainly unmoderated, until today. As Donald Trump and Benjamin Netanyahu are discovering, merely chopping off the regime’s head is absolutely pointless. Its strength goes far deeper than that.

The shah left Iran for the last time on 16 January 1979, tears running down his face as he climbed into the aircraft which took him to exile and a painful death from cancer. On 1 February, Ayatollah Khomeini flew into the same airport and established the Islamic Republic. Ahead lay chaos, assassinations, terror and an appalling eight-year war (western-encouraged) with Saddam Hussein’s Iraq. No one thought the Islamic revolution would last anything like as long as it has. On my frequent visits to Iran I worked out a formula which I thought summed things up: “the revolution feels stable but not permanent”. Of course nothing is permanent, but Iran’s Islamic revolution has outlived plenty of others, from Gorbachev’s perestoika to Orbánism.

Katouzian is as clear-sighted about the hold the Iranian system has developed over the years as he is about the revolution itself, and his account of the young women who have refused to accept that system is admirable. Of course it will collapse at some point, though Israel and the United States between them may have injected a temporary new strength into it with their assaults. Most autocracies are brought down in the end by corruption, and this will be the fate of the ayatollahs and the revolutionary guards too. The process has taken so long because, unlike the shah, the regime has been willing to use the utmost violence to stay in power. In any case, Katouzian’s warm, rational, highly accessible study will continue to explain the phenomenon long after it has vanished.

• John Simpson is the BBC’s world affairs editor. Iran and the Revolution: A History by Homa Katouzian is published by Yale (£25).