In the present article, the historical impact of militarization on Iran's economic growth from 1973 to 1979 is examined based on the memories of Pahlavi government agents and staffs. The main question is how the Second Pahlavi military spending affect Iran's economic growth in a negative way. According to the research hypothesis and during the second construction Programme, the military expenditures, which in addition to insufficient oil revenues from foreign grants has decreased, caused a small waste of the country's financial resources. Military spending has devastated financial resources during the three subsequent development Programme with the improved oil revenues and these spending has negatively affected Iran's economic growth. The results of this research which is written in an analytical and descriptive method and has used the first-hand sources – Pahlavi staffer memories – show that militarism influenced on two components of economy, investment in human and financial asset caused deviation on economic growth which reached significantly in the decades od 40 and 50 and had a negative effect on the economic growth.