I respectfully dissent from Charlie’s assessment that, if our federal government weren’t flat broke — spending $2 trillion more per year than it takes in revenue, with a $38 trillion existing debt — buying Greenland for the floated price of $700 billion would be a bargain. On the contrary, it would be a poor investment even if we were running consistent surpluses.
In principle, I have no objection to the United States purchasing new territory from willing sellers. As Charlie notes, America has done so several times in the past, and each time has worked out well for us in the long run. All else being equal, having control of Greenland as well would be very nice. But not at any cost.
As an analogy, I think that Tesla is a great company that makes excellent products, and I would value owning it very highly. I do not, however, believe it is worth $2 trillion, or $5 trillion, or $10 trillion. Even at Tesla’s current market capitalization of $1.4 trillion, I am uncomfortable buying its stock. That doesn’t make the company worthless. Its worth, like the economic value of everything, is simply finite.
Charlie lists past U.S. land acquisitions: the Louisiana Purchase of the western continental territories in 1803, the Gadsden Purchase of present-day southern Arizona and southwestern New Mexico in 1854, the Alaska Purchase in 1867, and the Adams-Onís Treaty by which we acquired Florida in 1819. Here are the values of each those acquisitions, adjusted for inflation:
- Louisiana Purchase: $15 million in 1803, or $430 million today
- Gadsden Purchase: $10 million in 1854, or $386 million today
- Alaska Purchase: $7.2 million in 1867, or $158 million today
- Adams-Onís Treaty: $5 million in financial claims in 1819, or $128 million today
Certainly, all these land acquisitions can be counted as steals, but that is because of their fabulous prices. Notice that none of those purchases even approached $1 billion in adjusted dollars. Yet we are supposed to want to pay $700 billion for Greenland? At the very least, these acquisitions are not comparable.
We wouldn’t be paying to enhance our national security beyond what we can already do. A treaty with Denmark from 1951 gives the United States a virtual “free hand” to increase its military presence at will in Greenland. President Trump could invoke this treaty tomorrow to expand missile defense facilities, bases for troops, or anything else deemed necessary to counter rising threats in the Arctic. All indications suggest that Denmark would welcome such moves.
Charlie is more focused on the economic benefits literally buried in Greenland: the territory’s extensive natural resources. These include “a whole bunch of rare earth elements, including neodymium, praseodymium, dysprosium, as well as large deposits of uranium, graphite, lithium, cobalt, copper, nickel, lead, zinc, gold, and iron ore,” as well as “90 billion barrels of oil, and 1,700 trillion cubic feet of natural gas.” We agree that it would be great for Americans to get their hands on these resources.
Getting to them, however, is made nearly impossible by Greenland’s arctic climate, which covers 80 percent of the territory with a thick sheet of ice. Imagine trying to operate large-scale mining and drilling projects in Antarctica. Mining in the Arctic generally costs five to ten times more than in normal climates, which is why most projects in Greenland have never progressed past the exploratory stage.
But say that we could extract Greenland’s vast mineral wealth. Where would the money from it go? Most would go to cover operational costs like wages and equipment, which would be far higher than in the American interior, as I just described. The United States does not have any state-owned mining company, so extraction would be performed by private firms. If any profits are left over, those companies would certainly keep the bulk of them to recoup their investments.
Thus, it’s not as though the federal government would receive the value of Greenland’s resources dollar-for-dollar. If the government got anything at all, it would be a fraction of the overall proceeds. That could still yield significant revenue. But would it be a good return on a $700 billion commitment? Do we really think that Americans have no superior investment opportunities available to them, resulting in no opportunity cost? Are we so confident in the prospects of this investment that we should coercively redirect about $2,400 per person to make it happen?
Finally, all of this assumes that the federal government would permit large-scale development in Greenland in the first place. Charlie insists that if the United States purchased Greenland, “unlike its current owners, who seem to treat it like some sort of zoo, we would follow up our acquisition by doing what Americans have always done: building, drilling, extracting, expanding, and making ourselves rich, powerful, and generally more useful than everyone else in the world.”
Oh please. The U.S. government hardly allows any commercial development of the vast, resource-rich public lands we already possess! Only 3.5 percent of federal land is currently leased for oil and gas extraction. Companies have been trying to drill in Alaska’s Arctic National Wildlife Refuge (ANWR) for 45 years, a place that almost nobody has ever seen and that Alaskans themselves resoundingly wish to exploit. You can plausibly argue that President Trump would permit the carving up of Greenland’s untouched wilderness, the powerful conservation lobby be damned, but could you say the same of a President Gavin Newsom?
Again, I would love for us to own Greenland in theory — just as I would love to own a beachside mansion in Puerto Vallarta. But at the price that’s being proposed, I just can’t justify the math.