Every so often, there is renewed interest in buying Greenland. I suspect that this is not likely to occur, as Greenland is currently not for sale. In any case, I have a better idea; sell Alaska to Canada, where it clearly belongs.
In grammar school, we were taught that “Seward’s folly” actually turned out to be a great deal for the US, as Alaska ended up being worth far more than the $7.2 million we paid to Russia back in 1867. I’m not so sure.
According to the Rockefeller Institute of Government, the most profitable state on a per capita basis is Massachusetts, followed by New Jersey. That’s because affluent highly educated urban states pay far more in taxes than they receive federal spending. In contrast, many poor and remote rural states are a drain on the Treasury. Alaska is the 4th worse offender:
Unfortunately, this data is not very accurate, as it mixes up true drains on the Treasury with states that just happen to have a lot of federal offices (such as Maryland and Virginia.) Nonetheless, I am fairly confident that even a more accurate accounting would show Alaska to be a net drain on the Treasury. Another source that seems more accurate has Alaska as the third worst offender. It certainly pays less federal taxes than average on a per capita basis. It really was Seward’s folly.
Greenland looks impressive on the map. Even if you account for the major distortion of the Mercator projection, it’s a big place. But national greatness does not come from having a large land mass. If it did, Ukraine would have quickly lost its war with Russia.
The US does derive some benefit from Alaskan oil production, but I feel confident that the Canadians would exploit those resources more aggressively, reducing global oil prices and benefiting American motorists. The taxes paid by Alaskan oil producers are not enough to cover the burden of carrying that remote and thinly populated state. Just imagine the federal subsidy involved in delivering a first class letter to Nome, Alaska!
Obviously, I understand that the US is not about to sell Alaska, and there are probably good reasons not to. But think about this from the perspective of Denmark. If this decision were made purely on a cash flow basis, they might wish to sell. But when various intangible considerations are taken into account, that prospect becomes much less attractive.
The other purpose of this post is to remind people that things aren’t always as they seem. For average people, it’s easy to visualize national wealth in terms of natural resources. But in practice, the richest areas of the world are often rather poor in national resources–consider Singapore, Switzerland and Silicon Valley, and many resource rich places are relatively undeveloped (Siberia, Africa, Venezuela, etc.) In the modern world, success is not about accumulating more frozen wasteland in the north; if it were then Canada would be a great power. Rather success comes from using your existing land more effectively.
It’s also worth recalling that the US is broke. People in bankruptcy typically don’t look to make major purchases.
PS. Baffin Island is the same size as Japan and England combined, and shares Greenland’s balmy climate. With Baffin Island you’d get Mt. Thor—one of the world’s coolest mountains, with the largest vertical drop. Why not ask Canada if they are interested in selling? Perhaps because average American voters have heard of Greenland, and recall seeing its impressive size on school maps in grammar school, whereas average Americans would be baffled if asked about Baffin Island.
