These days there has been considerable discussion in the news about possible war compensation between Iran and the United States. Although the U.S. has reportedly offered compensation as part of persuading Iran to relinquish its uranium, one major question remains: where would the money for this compensation actually come from?
In the 19th century, Friedrich Engels wrote his essay The Housing Question, examining how capitalists increased the rate of exploitation by providing housing for workers. This enabled employers to exercise greater control over workers’ wages, as Émile Zola had already illustrated in his masterpiece Germinal.
As we know, Marx’s formula for capital is:
C + S + V
- C is constant capital, such as factories, buildings and utilities.
- S is surplus value.
- V is variable capital, or workers’ wages.
The ratio S/V is the classic Marxist definition of the rate of exploitation. If governments allow wages to grow more slowly than inflation, they increase the accumulation of wealth by factory owners. In theory, this accumulated capital could finance new factories, expand industry, create employment and ultimately improve living standards.
In the 21st century, however, globalisation and the transformation of the economy have changed this dynamic. Research following the 2008 financial crisis has shown that accumulated wealth is increasingly channelled into the housing market rather than productive investment. Companies able to exploit rising housing values through their property assets can ultimately generate greater profits than by investing in new production.
When Donald Trump speaks of establishing a US$300 billion trust fund to invest in Tehran’s real estate—rather than investing in infrastructure, despite claims circulating in some media—he appears to be seeking access to a previously untapped source of financial accumulation. He claims the fund would be financed by the Gulf Cooperation Council countries. Yet after months of regional conflict and instability, it is difficult to imagine such investments proceeding without the dominant political and financial role of the United States. Moreover, as in Dubai, major real estate investment across the Gulf remains closely connected to American financial markets.
Accepting this assertion seems irrational unless we recognise how 21st-century capitalism increasingly operates behind the scenes.
What are the consequences of this investment plan?
Like many other countries in the 21st century, Iran could experience rising house prices as housing becomes increasingly tied to Residential Mortgage-Backed Securities (RMBS), which appears to be the ultimate objective of such a trust fund. Modern financial risk management encourages governments to maintain continuously rising property prices because investors ultimately expect returns from increasing real estate values. In the long run, this would widen the class divide between homeowners and renters within Iran.
So the answer to our question is this: it would be renters, who largely belong to the working class, who would ultimately pay the cost of the war compensation.
After the Second World War, the Allies financed the reconstruction of West Germany through the Marshall Plan. The crucial difference between then and now is that, in 1945, the Nazi regime had been defeated, and reconstruction was not centred on the commodification of housing or its packaging into mortgage-backed securities for financial markets.
In 1966, Ken Loach depicted Britain’s housing crisis through his landmark film Cathy Come Home, inviting comparisons with post-war West Germany. The film emerged from Britain’s “Kitchen Sink” realism, a movement rooted in the social realities of working-class communities rebuilding their lives after the destruction caused by the Second World War.
Today, Iran faces a similar housing dilemma. But the answer to war compensation is not to construct housing primarily as a financial asset feeding RMBS markets. A US$300 billion investment fund of this kind would not represent meaningful assistance for Iranian working-class renters. Instead, it risks creating yet another social calamity for those who have nothing to lose except an ever-increasing rate of exploitation.
Mojtaba Asghari
The author of book “House Earthquake”
Tehran, Iran
June ,2026