Lacking the historical reasons behind the Alaska Purchase, we would need to get creative to acquire Greenland today.
Lacking the historical reasons behind the Alaska Purchase, we would need to get creative to acquire Greenland today.
G reenland would be very hard to buy, even if acquiring it makes sense. We may reasonably be able to get many of the benefits we want without a formal purchase, and that seems to be the rationale behind Donald Trump starting the bidding by asking for everything. But let’s say that we were actually going to buy the world’s largest island. That would raise three big questions: From whom? For how much? And structured how?
Pricing It Out
As Henry Olsen notes, Denmark can’t sell Greenland without the Greenlanders’ consent. That, however, ought to be the easier thing to negotiate. There are fewer than 60,000 people in Greenland, most of whom are not Danes but Inuit. Between financial incentives, offers of the benefits of American citizenship, political accommodation of their interests in home rule, and some level of flattery of their sense of national pride, we could probably make it worth their while. Olsen argues that an arrangement over Greenland would give us what we immediately want: greater military and naval basing rights, the ability to patrol and use the Arctic sea-lanes abutting the island, and the capacity to exclude foreign militaries.
Of course, none of that deals with the possibility that Greenland might be beneficial to the United States both in terms of natural resources (e.g., rare earth minerals and fisheries) and potential living space (the island is sparsely populated even in the small fraction of it that is presently habitable). Both development and immigration are topics on which self-governing Greenlanders may be expected to raise objections at the outset to the very things Americans may want.
Sarah Kessler at the New York Times asked David Barker, a real estate developer and former economist at the New York Fed, to value Greenland. He started with the fact that Alaska was purchased for $7.2 million, roughly $150 million today, while the Danish West Indies were purchased by the United States from Denmark in 1917 for $25 million, roughly $657 million today. Barker assumed that the relevant metric is the present wealth of Denmark because that affects how much money it would take to get the Danish government’s attention, as well as the present wealth of the U.S., because that reflects what we can afford to pay.
That’s a steep markup: Denmark is a wealthy country whose per capita income was higher than that of the United States from 2004 through 2014, and it is still in the world’s top ten in that regard (although per capita income is now estimated at $69,273 compared with $86,601 in the U.S.). His estimates: “For the low-end valuation, the adjusted the purchase price of the Virgin Islands for the 500-fold growth in Denmark’s G.D.P. since 1917. That implied a Greenland price tag of $12.5 billion. Adjusting the $7.2 million cost of the Alaska purchase for the growth in U.S. G.D.P. produced the high end of $77 billion.” But those are cash prices. The world has changed a lot since then. Few nations today would trade the permanent value of national territory for a one-time payment.
When We Were Buying
Things were different when we made earlier purchases. The Gadsden Purchase, finalized in 1854, was so unpopular that Santa Anna was driven from power for the last time for selling any Mexican territory to the United States. Alaska was available in 1867 in good part because Russia wanted the United States to have it. Russia lost the Crimean War to France and Britain in 1856, resulting not only in the destruction of the Black Sea fleet but also the forced demilitarization of Sevastopol and the Black Sea, a humiliation for a great power (Russia broke that restriction only during the 1870–71 Franco-Prussian War). In addition to expensive internal reforms such as abolishing serfdom, Alexander II responded with a diplomatic charm offensive towards the French, but the Anglo-Russian “Great Game” was still afoot around Asia, leaving relations between Europe’s greatest sea power and its largest land power as frosty as ever.
Meanwhile, Russian relations with the United States were warm. Secretary of State William Seward spent much of the American Civil War in talks with Russia over his plans for the first trans-Pacific telegraph connection across the Bering Strait, a plan known as the Collins Overland Line because it would not require the deep-sea connection that had caused the transatlantic cable to fail in 1858 (it was reconnected in 1866). The United States itself had just finished connecting a trans-continental telegraph cable in October 1861. In his 1861 instructions to the new U.S. ambassador to St. Petersburg, Cassius Clay, Seward stressed that
Russia like the United States is an improving and expanding empire. Its track is eastward, while that of the United States is westward. The two nations, therefore, never come into rivalry or conflict. . . . Russia and the United States may remain good friends until, each having made a circuit of half the globe in opposite directions . . . shall meet and greet each other in the region where civilization first began.
In a December 1863 letter to Bayard Taylor, the chargé d’affaires under Clay in St. Petersburg, Seward was even more effusive: “In regard to Russia, the case is a plain one. She has our friendship, in every case, in preference to any other European power, simply because she always wishes us well, and leaves us to conduct our affairs as we think best.”
During a Russian war scare with Britain and France over Poland in 1863, Alexander II decided to protect his wooden-walled navy by dispatching most of it to the harbors of the neutral United States, which had itself nearly come to blows with Britain in late 1861 (a diplomatic imbroglio, the Trent Affair, that spurred British concerns about an invasion of Canada). Russian ships touring New York and Washington and even going on alert to protect San Francisco from Confederate raiders was a diplomatic coup that raised European fears of a Russo-American alliance; Alexander II said later that he considered it one of the proudest accomplishments of his reign.
The tsar realized three things about Alaska: It was hard for Russia to defend from British Canada, given its vast distance from European Russia and Russia’s comparative naval weakness; it was much easier for Americans to defend; and giving it to the United States would menace Canada and thus divert British attention and resources in any future conflict. That strategic calculus helps explain why, even after the Collins telegraph project fell through, Alexander II was willing to sell the vast territory to Seward for half of what New York City paid during the same period just to build the Tweed Courthouse.
Canadian defense looked so weak at the time, next door to a previously disarmed neighbor that had abruptly proven its capacity to raise a million-man army, that Irish Fenian rebels based in New York invaded it in 1866 and 1867, hoping to hold Canada hostage and trade it for Ireland. The possibility of American encirclement of Canada played a big role in the decision to unite Canada into a single self-governing dominion in 1867. It also influenced Seward’s interest in buying Greenland and Iceland. As former senator Robert Walker (a veteran expansionist) wrote to Seward in 1868 in arguing for buying Greenland:
The government, recently partially established in British America, called the Dominion of Canada, was gotten up in England in a spirit of bitter hostility to the United States. . . . By this great purchase, we have flanked British America on the Arctic and Pacific, cutting her off entirely from the latter ocean from north latitude 54° 40′ to 72°, leaving the new dominion but 5° 40′ on the Pacific, pressed between Alaska on the north and California, Oregon, and Washington Territory on the south, with even British Columbia now being rapidly Americanized. Now, the acquisition of Greenland will flank British America for thousands of miles on the north and west, and greatly increase her inducements, peacefully and cheerfully, to become a part of the American Union.
It was rumored at the time that Seward was proposing to buy both Greenland and Iceland for $5.5 million — a lower per-square-mile price than what was paid for Alaska. He was more seriously negotiating for the Danish West Indies. That era came swiftly to a close, however. Congress balked at appropriating money for any of this and openly mocked the idea of acquiring Greenland and Iceland. The report prepared at Walker’s recommendation on those acquisitions was largely suppressed by the State Department after its publication. After Seward left office, the Senate also shot down Ulysses S. Grant’s proposal to acquire the Dominican Republic, while Grant in 1871–72 resolved tensions with Britain (permanently, as it would turn out) by international arbitration of American claims for damage done by British-built Confederate raiders. After the Second World War, Harry Truman offered $100 million to Denmark to let the U.S. keep Greenland (which we had seized while Denmark was Nazi-occupied), but he was rebuffed.
How to Buy
If the United States is to make a serious proposal to Denmark and Greenland, then it needs to be conceptualized not as a single cash transaction but as a long-term deal. One benefit to Denmark is that maintaining Greenland is expensive: As Olsen notes, about 1 percent of Denmark’s budget is consumed by subsidies to Greenland that “would be rounding errors in the Pentagon’s budget,” and that’s not even counting capital outlays currently under discussion. A more serious inducement would be a treaty formalizing favorable tariff and regulatory treatment for Danish imports from Legos to Ozempic. Olsen suggests “moving to make Wegovy and other anti-obesity drugs made by Danish Novo Nordisk eligible for Medicare and Medicaid reimbursement if prescribed for weight loss. The company’s success is already turbocharging the Danish economy; allowing tens of millions of Americans low-cost access to its drugs could make Denmark a Baltic Tiger.”
These possibilities need not be exhaustive. It’s likely that, once Trump is inaugurated and no longer bored by inactivity, the attention of official Washington will forget about Greenland. But the United States really could make better use of the island than Denmark does, and thinking seriously about how to structure an offer for it could prove far-sighted in the Seward tradition.