A resident of Kulusuk carts water in the town of Kulusuk, Greenland, on August 16, 2019. Image Credit: AFP

Former Danish prime minister Lars Lokke Rasmussen called US President Donald Trump’s reported idea of buying Greenland, a self-governed Danish territory, an out-of-season April’s Fool joke. Trump’s idea may be outlandish (and impossible) but that doesn’t mean there’s no benefit in thinking about reviving the market in sovereign territories, which once made America great.

Besides acquiring Louisiana from France, Florida from Spain, Alaska from Russia and much of its southwest from Mexico, the US nearly bought Greenland and Iceland in the 1860s. The idea was to surround Canada with US territory and thus persuade it to join the US.

The time for wooing Canada passed quickly, though, and the US recognised Denmark’s sovereignty over Greenland in 1917 after it bought the Virgin Islands, then a Danish colony. But soon enough, the world’s biggest island acquired strategic importance for the US again, this time as a base for warplanes during the Second World War. The atomic bomb made Greenland even more strategic. In the pre-missile years, it was especially important to have a base for bombers near an adversary’s borders, and Greenland was close enough to the Soviet Union that the US could threaten all of European Russia from it. It was also an ideal base for reconnaissance flights.

The US tried to buy Greenland again, but a 1946 offer to the Danish government fell on deaf ears, even though the island housed only about 600 Danes at the time. As it turned out, the US didn’t need to buy the island. The formation of the North Atlantic Treaty Organisation, of which Denmark was a founding member, and a 1951 bilateral defence agreement allowed the US to establish the military presence it needed in Greenland.

Strategic significance

Now, the US uses its Thule base as part of an early-warning system in case of a Russian nuclear strike. But Greenland’s strategic significance is on the rise again. Russia’s recent build-up in the Arctic, both military and civilian, is leaving the US behind; a stronger US presence in the region than just an Air Force base in Greenland would make it harder for Russia to seal control of the Northern Sea Route and team up with China on monopolising it. Besides, global warming and Greenland’s rapidly melting ice make for easier access to Greenland’s vast natural resources.

The US, in short, has better reasons to covet Greenland than Trump’s vanity or all the golf courses he could build there as the ice melts.

To protect US interests in the Arctic, Trump would be better off working closely and constructively with European allies, including Denmark and Norway. Such cooperation can make more economic sense than territorial expansion. - Leonid Bershidsky

If the idea of the US buying Greenland still seems outlandish, it’s just because land deals between states have become rare. The most recent examples are obscure. The tiny nation of Kiribati, threatened by rising ocean levels, bought 5,500 acres of land in Fiji for $9 million in 2014, hoping its 100,000 residents can move there if their native atolls become uninhabitable. Another nation, Tuvalu, has been considering similar plans. There is no transfer of sovereignty involved, though. If the people of Kiribati and Tuvalu have to move, they will no longer have a state of their own. They’ll be residents of Fiji.

But one could easily imagine other situations in which an institutionalised market in sovereign territories could be beneficial. In a 2017 paper, two Duke University law professors, Joseph Blocher and Mitu Gulati discussed what it would take to create such a market and what problems it would solve. They argued that nothing in today’s international law prevents nations from ceding and acquiring territory as they see fit as long as the transfer isn’t forced.

The reason such deals no longer take place is that in the modern world, sovereignty ultimately resides with the people. Buying and selling people with the territories they inhabit is an obsolete notion. But, Blocher and Gulati argued, taking the population’s desires into consideration could change things.

International law

Take the Falklands, the islands over which the UK fought with Argentina in the 1980s. Argentina still wants the islands but their 3,400 residents have voted overwhelmingly to maintain their British citizenship. The UK spends about $100 million a year to maintain a continued military presence there. “What if Argentina offered the islanders $1 million each to approve a change?” Blocher and Gulati wrote. At that rate, it would even make economic sense for the UK to make the offer.

Their proposal is to change international law so that “parent nations” can’t forbid a region to secede, but they’re entitled to compensation for lost territory. Of course, there would be lots of sensible objections to such a plan. The supply of territories for sale is limited, the will of the people isn’t always easy to determine with certainty, and there’s a question of how you put a price on a place. Ukraine, for example, would be unwilling to give up Crimea to Russia for any price, and it wouldn’t be easy to organise a valid citizens’ vote there, as the 2014 “referendum” held by Russia showed.

Also, it may not be a great idea to let rich nations buy up territories from poor ones (they have the technology to persuade residents to vote for it, too) and turn them into colonies. The solution Blocher and Gulati suggested, giving the purchased territories’ residents the purchasing nations’ citizenship, wouldn’t change much: Puerto Ricans, for example, are US citizens but they don’t really enjoy US living standards.

Greenland, of course, won’t be sold to the US. On the one hand, Denmark has no reason to sell it. It’s a wealthy country that runs a budget surplus. It can easily afford the annual subsidy of about $500 million that it pays to Greenland, and it sees itself as the island’s sensible steward rather than the unwilling owner of a vast, largely uninhabited territory.

The Alaska example

Besides, the 56,000 Greenlanders likely wouldn’t want to switch their allegiance to the US. The island’s Home Rule Act, approved by the Danish parliament, gives its autonomous government “fundamental rights in respect of Greenland’s natural resources.” Many locals hope control over these resources eventually will form the basis of Greenland’s independence, and they have no problem waiting for that opportunity under Denmark’s benevolent rule.

They would be unlikely to give up their current security and the prospect of independence in exchange for US passports. Alaska, with its recent crippling budget cuts, can hardly serve as an attractive example to another sparsely populated northern territory cut off from the continental US.

To protect US interests in the Arctic, Trump would be better off working closely and constructively with European allies, including Denmark and Norway. Such cooperation can make more economic sense than territorial expansion. Trump may be wrong on Greenland but he unwittingly raised the question of sovereign territory transactions. If they can be used to avoid violence and unnecessary tension and benefit denizens of the territory for sale, why not?

— Bloomberg