Reasons of State: Why Didn’t Denmark Sell Greenland?

Denmark turned down 100m USD from the USA; I discuss how this was a bad idea
politics, charity
2011-01-012019-08-17 finished certainty: log importance: 2


After WWII, the Cold War mo­ti­vated the USA to offer $1,184$1001946 mil­lion for own­er­ship of Green­land, which was de­clined. The USA got the ben­e­fit of us­ing Green­land any­way. I dis­cuss how the is­land oth­er­wise re­mained a drain since, the dim prospect it will ever be use­ful to Den­mark, and the for­gone ben­e­fits of that offer. I spec­u­late on the real rea­sons for the re­fusal.

Read­ing one day on Red­dit, I ran into a bit of his­tor­i­cal trivia :

Fol­low­ing World War II, the United States de­vel­oped a geopo­lit­i­cal in­ter­est in Green­land, and in 1946 the United States offered to buy Green­land from for $1,184,245,900$100,000,0001946, but Den­mark re­fused to sell.

The rea­son why the US would want to buy Green­land is clear: be­ing able to in­stall an­ti-Russ­ian mil­i­tary in­stal­la­tions such as ear­ly-warn­ing radar and nu­clear bomber bases (Green­land be­ing fairly close, on a , to Rus­sia)1. The US has fa­mously often bought large chunks of land (Louisiana Ter­ri­tory & Alaska be­ing the biggest & most profitable), so it was noth­ing new—this was, in fact, the sec­ond time the US ex­pressed in­ter­est in buy­ing Green­land, after an abortive at­tempt in the 1860s. It would not even have been the first sale of Dan­ish land to the USA, as there was at least one oth­er, the in the . (As should be no sur­prise: trans­fers of land are an im­por­tant way that geopol­i­tics can be im­proved with­out re­quir­ing war.)

This ap­pears to have been a large offer: 1946 (in­fla­tion-ad­justed to 2011) US GDP was $200–228b, mak­ing an offer of $0.1b a non­triv­ial per­cent­age of US pro­duc­tiv­i­ty, and Den­mark’s GDP ap­pears to have been >50x small­er, ~$23b, as it re­cov­ered from WWII.

The rea­son why Den­mark would want to not sell Green­land is… less clear. At first glance, it’s not clear. Nor the sec­ond.

Costs

By the eco­nom­ics, hold­ing on to Green­land is a bad idea.

$100m in 1946 dol­lars is some­where around $1b in 2011 dol­lars. Then one should con­sider the ; $100m in­vested in 1946 un­til 2011 at a 5% re­turn is around 24x () or $2.4b. Den­mark could have re­al­ized such a re­turn just by leav­ing the money in the Amer­i­can stock mar­ket; the Dow Jones var­ied be­tween 160 and 200 in 1946–1950, and over the past few years trades at 10–12,000 for a re­turn of 60–63x, and this is an un­der­es­ti­mate: stock mar­ket re­turns have been hurt badly by the late 2000s—if one took the old rule of thumb that stock mar­kets re­turn 8% over the long term, Den­mark’s hy­po­thet­i­cal re­turn would have been 149x, not 63x (). With a few more decades, the for­gone re­turns may take off and re­turn to the trend­line; Den­mark does not have a as gi­gan­tic as Nor­way’s Statens Pen­sjons­fond (it could’ve started one with Green­land or all the Green­land sub­si­dies since then, though…), but the gov­ern­ment or the pen­sion funds cer­tainly can take a long view on in­vest­ing, so that’s not an is­sue.

We can deal with the in one fell swoop: Green­land’s en­tire GDP is around $2b. The over­all trade deficit is a few hun­dred mil­lion and has been in place for 21 years, since 1990. The offi­cial Dan­ish sub­sidy was $512m in 2005. Green­land is not a go­ing con­cern and would col­lapse within years. It’s hard to es­ti­mate the to­tal sub­sidy sine 1946, but if we make the as­sump­tion that the sub­sidy is a con­stant per­cent­age of Dan­ish GDP then the sub­sidy to­tals (ig­nor­ing op­por­tu­nity cost) some­where up­wards of $3–16b2.

Amer­i­cans may find $3 bil­lion or even $16 bil­lion a pretty pid­dling sum given the colos­sal sums it spends (>$3t on Iraq and Afghanistan, $2.5b for B-2 Bombers, etc.); but re­mem­ber the USA is the largest econ­omy in the world with 300 mil­lion peo­ple. Den­mark is closer to the 30th largest econ­o­my, and has just 5.6 mil­lion peo­ple. To get a bet­ter un­der­stand­ing, con­vert to per capita (mul­ti­ply­ing by 60), to get a range from $180b to $960b—at which point it be­comes clear that this is no laugh­ing mat­ter for a small coun­try like Den­mark. This money could have funded ma­jor projects like the .

Benefits

So what can we put on the pos­i­tive side of the bal­ance-sheet? Be­fore eval­u­at­ing some­thing we need to ask our­selves whether Dan­ish sov­er­eignty over Green­land mat­ters - sov­er­eignty is what Den­mark was asked to sell, noth­ing else. If some­thing would ben­e­fit Den­mark re­gard­less of whether it sold Green­land or not, then it can­not count as a ben­e­fit. We are also in­ter­ested in the changes based on Den­mark not sell­ing.

Pro­ceed­ing through pos­si­ble ben­e­fits in de­scend­ing or­der:

  1. Geostrate­gic lo­ca­tion

    Ob­vi­ously very valu­able. But it is worth­less to Den­mark if it does not use the lo­ca­tion for any­thing valu­able—which it does not. Com­pare to, say, Gibral­tar. Den­mark is a lib­eral Scan­di­na­vian state which has been neu­tral since the 1864 ; it is not go­ing to launch its pi­rat­i­cal navy out from hid­den Green­land ports to raid At­lantic ship­ping. Den­mark has, does, and will make mil­i­tary use of Green­land. (This pos­si­ble ben­e­fit also cuts the other way: a strate­gi­cally vi­tal lo­ca­tion you can­not de­fend or use effec­tively is not a ben­e­fit, but doomed3, and one rea­son that ter­ri­tory pur­chases like the Louisiana or Alaskan or Vir­gin Is­land trans­fers hap­pened. The fact that a small, ob­scure, dis­tant coun­try like Den­mark has been per­mit­ted by the much larger or much more closely lo­cated pow­ers like the USA, UK, USSR, France, Ger­many etc to re­tain Green­land for so long im­plies that it is ei­ther not that valu­able or Den­mark is not gain­ing its val­ue.) Like­wise, Den­mark has failed to cap­ture the in­di­rect geostrate­gic value of Green­land: not only did it refuse the US offer, it then—as a found­ing mem­ber of NATO, join­ing 1949-04-04—pro­ceeded to let the US use Green­land as much as it pleased, ex­pand­ing the US WWII in­stal­la­tions into the gi­gan­tic (linch­pin of the nu­clear bombers aimed at Rus­sia) and agree­ing to gov­ern Thule un­der a 1951 treaty which specifi­cally says (em­pha­sis added):

    With­out prej­u­dice to the sov­er­eignty of the King­dom of Den­mark over such de­fense area and the nat­ural right of the com­pe­tent Dan­ish au­thor­i­ties to free move­ment every­where in Green­land, the Gov­ern­ment of the United States of Amer­i­ca, with­out com­pen­sa­tion to the Gov­ern­ment of the King­dom of Den­mark, shall be en­ti­tled within such de­fense area and the air spaces and wa­ters ad­ja­cent there­to: …

    The USA had plans to ex­ploit Green­land’s lo­ca­tion even more thor­oughly with (“a net­work of mo­bile nu­clear mis­sile launch sites un­der the Green­land ice sheet”); it was can­celed not due to Dan­ish ob­jec­tions but tech­ni­cal prob­lems with the ice tun­nels. When Den­mark’s mil­i­tary is ac­tive in the 20th/21st cen­tu­ry, it is in roles where Green­land is of no pos­si­ble value to it (eg serv­ing as peace­keep­ers & ad­vi­sors in Afghanistan). What is the Dan­ish Navy sup­posed to do with a Green­land base, in­ter­vene in the ? With the end­ing of the Cold War, Green­land’s value is like­wise di­min­ished. Yes, the US would still like it for use with the an­ti-bal­lis­tic mis­sile shield and for short­en­ing air routes, but that’s a pref­er­ence and not an ex­is­ten­tial ne­ces­sity (the need for bombers is now largely moot given sub­se­quent de­vel­op­ments like aer­ial re­fu­el­ing and mis­siles).

  2. Eco­nom­ics: the

    Per­haps, like how Spain re­fuses to let Cat­alo­nia se­cede, Green­land rep­re­sents a large chunk of na­tional GDP and can­not be al­lowed to? But no, the GDP con­tri­bu­tion is neg­a­tive. Per­haps the lo­ca­tion is eco­nom­i­cally rather than strate­gi­cally valu­able, par­tic­u­larly for the North-West Pas­sage? But Green­land’s ex­tend out only 12 nau­ti­cal miles. Even the Green­land does not cut off the Pas­sage. The only ob­vi­ous way to mon­e­tize the Pas­sage is mil­i­tary, which as al­ready not­ed, is po­lit­i­cally im­pos­si­ble for Den­mark. Nor was the North-West Pas­sage im­por­tant in the 1940s and still is not im­por­tant de­spite global warm­ing.

  3. Fish­ing grounds

    Fish­ing is one of the ; Wikipedia says it’s 72% of the 2008 ex­ports of $485m or $350m, from a fish­ery of around 5 mil­lion square miles. This is to­tal ex­port val­ue, not profit. If we as­sume profits of 10%/$30m or what­ev­er, that’s nowhere near enough to re­pay the sub­sidy or the cost of not sell­ing, and so it does not help. (But it is defi­nitely a brighter spot in the tally when com­pared with the oil/­Pas­sage/­geostrate­gic val­ues of 0.)

  4. Hy­dro­car­bons: oil/­nat­ural gas/methane

    An old hy­po­thet­i­cal, raised by al­most every­one, but one that to­tally fails. Proof of the far­sight­ed­ness of pre­dic­tions that Green­land will turn into an­other Alaska and gush oil or min­er­als can be seen in the fact that after a cen­tu­ry, there re­mains not a trace of this in sight—­fu­ture ex­ploita­tion of nat­ural re­sources has al­ways been a jus­ti­fi­ca­tion for Green­land, and, one sus­pects, al­ways will be. Be­ing cov­ered by kilo­me­ter-thick ice is un­help­ful.

    The Green­land state oil com­pa­ny, , is small; and if I read their 2010 re­port cor­rect­ly, they lose money some years and the profitable years yield only a few mil­lion dol­lars. There may be ton of oil there, but there will al­ways be vast oil de­posits some­where which are un­eco­nom­i­cal to ex­tract, and Green­land seem to hold a lot of them. (When oil com­pa­nies pre­fer work­ing with to your oil, you ei­ther have very lit­tle or very ex­pen­sive oil!) Given that Green­land oils & min­er­als have been so ex­pen­sive to ex­tract that they haven’t been over the past cen­turies, any tech­nol­ogy mak­ing Green­land ex­ploita­tion fea­si­ble will ben­e­fit many more vi­able com­peti­tors and also im­plies that the mar­ginal costs of ex­trac­tion will be so high that even if at some point mean­ing­ful lev­els of re­source ex­trac­tion hap­pen, the profit of each unit will be near ze­ro—Saudi Ara­bia, Green­land is not!

    Worse, Den­mark has agreed that fu­ture oil profits will go to Green­land, left­-overs will only go to re­duce the an­nual Dan­ish sub­sidy, and any­thing past that goes back to Green­land to fos­ter fur­ther au­ton­o­my/in­de­pen­dence, a trend which seems likely to re­peat it­self if there turn out to be any ex­ploitable re­sources in or near Green­land such as by the North Pole4. So un­der no sce­nario will Den­mark ever turn an ac­tual profit. And fi­nal­ly, Den­mark could profit from any oil dis­cov­ered re­gard­less of whether it or the US owned Green­land—if its oil com­pa­nies are com­pet­i­tive. So, oil is com­pletely use­less as a rea­son to hold onto Green­land.

  5. Min­ing: Zinc, lead, and

    Those mines were closed in 1990, but may re-open in the fu­ture. I did­n’t find any data on the profitabil­ity of the mines be­tween 1946 and 1990; it is pos­si­ble they were so lu­cra­tive as to jus­tify hold­ing onto Green­land. This seems a lit­tle un­like­ly, but I can’t im­me­di­ately dis­miss it. (It would­n’t jus­tify the sub­si­dies past 1990, of course, but it might jus­tify the orig­i­nal 1946 de­ci­sion to hold onto Green­land.) The warm­ing of Green­land and melt­ing of glacial ice has prompted re­newed ex­plo­ration5 of Green­land’s min­eral re­serves and fresh dis­cov­er­ies of de­posits6, sug­gest­ing that profits were min­i­mal be­fore due to diffi­cult con­di­tions.

    The diffi­culty here is that many of the eco­nomic ben­e­fits will be in­ter­nal­ized by the com­pa­nies do­ing the ex­ploita­tion, their (for­eign) em­ploy­ees, and the ex­ter­nal­ized en­vi­ron­men­tal waste & health fall­out from min­ing is no­to­ri­ous. In par­tic­u­lar, the dis­cov­ery of rare earths may not mat­ter be­cause rare earth de­posits are not rare and not found solely in China (as cov­er­age of Chi­na’s 2009–2010 rare earth em­bargo might lead one to be­lieve) but found all over in­clud­ing large de­posits in the USA; the rea­son the Amer­i­can de­posits at the stopped be­ing mined is be­cause the en­vi­ron­men­tal con­t­a­m­i­na­tion was too se­vere and China per­mit­ted that while Amer­ica did not—hence Moun­tain Pass is only start­ing up with a heavy in­vest­ment in cleaner min­ing tech­niques. Will the rare earths be profitable enough to com­pete with Amer­i­can or Aus­tralian or Cana­dian or Chi­nese de­posits, un­der Green­land’s con­di­tions, at ac­cept­able lev­els of pol­lu­tion and es­pe­cially the taboo ra­dioac­tiv­i­ty?7

  6. Min­ing sand:

    As global warm­ing melts the ice, it ex­poses much sand in Green­land. Is that profitable and will make Green­land the ‘Saudi Ara­bia of Sand’? No. Sand is ex­tremely heavy, used in bulk in con­struc­tion for con­crete (and be­ing so bulky, es­pe­cially en­vi­ron­men­tally de­struc­tive to ex­trac­t), and used pri­mar­ily on the op­po­site side of the world. It is a low-value prod­uct used in low-value ways in poor places, which may not even pay for ship­ping out­side of Ice­land.8

  7. Po­lit­i­cal con­trol

    Green­land has been prin­ci­pally self­-gov­ern­ing since 1979. This may not have been fore­see­able in 1946, but sup­pose it had­n’t; how ex­actly is the con­trol worth hun­dreds of mil­lions and bil­lions?

  8. Cap­tur­ing Green­land’s im­port busi­ness

    If Den­mark’s ex­ports (and fu­ture ben­e­fits from pos­tu­lated re­source wealth) are dri­ven by its sov­er­eignty over Green­land, then their cur­rent moves in de­volv­ing even more power and con­trol to the Green­land gov­ern­ment (eg. the afore­men­tioned oil deal) are shoot­ing them­selves in the eco­nomic foot. And if Den­mark’s ex­port suc­cess is­n’t be­cause of its sov­er­eign­ty, all the less rea­son to have sov­er­eign­ty! But given the fact that the di­rect Dan­ish sub­sidy is al­most the size of Green­land’s en­tire an­nual im­ports and Green­land only im­ports 60% from Den­mark (60% of $867m be­ing $520m vs $500m sub­sidy), it is hard to see how this could ever re­sult in a profit for Den­mark.

  9. Cul­tural value

    Wikipedia does list ‘hand­i­crafts’ as a ma­jor ex­port. But just like oil and the other re­sources, ben­e­fit­ing from Green­land’s crafts­men and artists do not re­quire any kind of sov­er­eignty or sub­si­diza­tion. The US does­n’t own China or Canada, yet we still profit plenty and get lots of artists and crafts­men from them. Given free flow of peo­ple, the ques­tion be­comes can Den­mark jus­tify its sub­si­dies and op­por­tu­nity cost by the mar­ginal in­crease of artists and crafts­men? Jus­ti­fy­ing by Green­land’s to­tal art out­put is du­bi­ous; by the mar­ginal in­crease even more du­bi­ous.

  10. Col­o­niza­tion

    Much of the Green­land pop­u­la­tion is Dan­ish, un­sur­pris­ing­ly. One won­ders if some suc­cess­ful col­o­niza­tion (the pop­u­la­tion is only 57,000 peo­ple) is a real ben­e­fit to Den­mark; re­gard­less, given that Den­mark’s 2010 birthrate of 1.88 chil­dren per woman is be­low re­place­ment rate, any na­tion­al­ists ought to fo­cus their col­o­niz­ing efforts at home.

  11. Char­ity

    Green­land is a poor coun­try. Per­haps Den­mark sim­ply wants to help out the many Inuit & Danes & de­scen­dants of both. This is eth­i­cally rep­re­hen­si­ble. Green­land is poor, but com­pared to many African coun­tries it is fab­u­lously wealthy re­gard­less of whether you take the $20k per capita at face value or dis­count sub­si­dies etc to get a smaller num­ber like $10k per capi­ta. In­ves­ti­ga­tions of African in­ter­ven­tion es­ti­mate the cost of sav­ing African lives at >$1000 a life but let’s be con­ser­v­a­tive and in­crease the cost by an or­der of mag­ni­tude to $10,000 a life; is help­ing a bit the 57,000 Green­lan­ders eth­i­cally prefer­able to in­stead sav­ing 50,000 African lives ()? I do not think they are even close, and if that is Den­mark’s true rea­son, shame on them for let­ting dis­tance or eth­nic­ity warp their eth­i­cal judge­ment to such a freak­ish ex­treme. (It is not as if Eu­ro­pean coun­tries send­ing for­eign aid to Africa is some hugely novel and ex­per­i­men­tal con­cept. It is well-un­der­stood how to do good in Africa and the Dan­ish would be more com­pe­tent than most at the job.)

Note that I did not in­clude as a ben­e­fit “makes Den­mark big­ger”. Own­ing the “largest is­land in the world” is about as mean­ing­ful as own­ing the world’s largest ball of twine. Land is not in­trin­si­cally valu­able; only what is in it, or on it, or near it is of val­ue. One acre of Tokyo or Man­hat­tan sky­scrap­ers will yield enor­mous rents or their sale will buy you many acres in­deed of the frozen wastes of Rus­sia or the baked wastes of the Sa­hara. (The Sa­hara, in­ci­den­tal­ly, used to be a re­ally nice place: the ; some­thing sim­i­lar hap­pened to Mesopotamia as it went from bread bas­ket of civ­i­liza­tion to sali­nated dusty Iraq.) If we think about deserts, we see land can be an out­right li­a­bil­ity if it leads to de­ser­ti­fi­ca­tion and de­struc­tive sand­storm dev­as­tat­ing the good bits of one’s coun­try, ac­tive in­sur­gen­cies, phys­i­cal sep­a­ra­tion of pro­duc­tive re­gions, con­tains Su­per­fund sites, or rep­re­sents an in­de­fen­si­ble mil­i­tary vul­ner­a­bil­i­ty. Rus­sia is fairly wealthy (in ag­gre­gate, not per cap­i­ta), but that is due to what its frozen wastes con­tain, not the wastes; and as dis­cussed above, it ap­pears Green­land did not re­ceive the du­bi­ous bless­ing of “the dev­il’s ex­cre­ment” (see ).

Why?

Be­ing an out­side un­fa­mil­iar with Den­mark, it is hard for me to spec­u­late. One per­son tells me:

If the na­tional bud­get have to be cut, I think Green­land would rate as one of the last things Danes would like to see cut.

That’s very strange. As an Amer­i­can, would I say Puerto Rico is one of the very last things that ought to ever be cut in the fed­eral bud­get? Heck no! Puerto Rico has re­peat­edly de­cided it’d rather not be a state, but at least it’s still gen­uinely ruled by the USA; if Puerto Rico de­cided to switch to full home rule, I think I and the av­er­age Amer­i­can would care even less about them.

So why are the Dan­ish so keen on Green­land? It spurns them po­lit­i­cal­ly, it costs them a for­tune, and has no ap­par­ent ad­van­tage. Given the above quote, it may be time to aban­don re­alpoli­tik, es­pe­cially when we read in the 1947 Time:

There was al­ways the ob­jec­tion that Den­mark’s na­tional pride would stand in the way of a sale. But U.S. mil­i­tary men thought they had an an­swer: Den­mark owes U.S. in­vestors $70 mil­lion. That is less than the cost of an 850-ft. car­rier for the Navy, but more dol­lar ex­change than Copen­hagen can eas­ily raise.

One won­ders why Den­mark did­n’t, say, offer the US a 99-year lease for $70 mil­lion, es­pe­cially if they were strug­gling (like post-war Eng­land, one notes) to raise dol­lars for im­ports and debt-ser­vice; long-term leas­ing from al­lies has long been an ac­cept­able op­tion for the USA (or even leas­ing from en­e­mies, such as ), so there was no ob­sta­cle on that end.

What would ex­plain the Dan­ish plac­ing Green­land above other sa­cred cows in their bud­get and per­mit the US to es­tab­lish huge mil­i­tary bases for free? “Sa­cred cow” seems to be as use­ful a phrase here as Time’s “na­tional pride”; the last time the US bought land from Den­mark was the with the , un­der diffi­cult Dan­ish cir­cum­stances in WWI. It would not be too sur­pris­ing if there were some bit­ter feel­ings about this among some Dan­ish, re­gard­less of what hap­pened.

Com­menter Haukur points out ad­di­tional Dan­ish con­text: “the and the as well as the Dan­ish post-war efforts to . The Dan­ish em­pire defi­nitely was shrink­ing, which the Danes could­n’t help but be an­noyed about. Sell­ing your White Ele­phant may be the smart thing to do but it’s un­der­stand­able when peo­ple don’t.” It’s no sur­prise when we read re­marks by prime min­is­ter Hedtoft on Jan­u­ary 23, 1948:

“Why not sell Green­land? Be­cause it would not be in ac­cor­dance with our honor and con­science to sell Green­land. The Green­lan­ders are and feel they are our coun­try­men and we feel tightly bound to them. It can­not be our gen­er­a­tion’s task to make the Dan­ish state small­er, and it is not in ac­cor­dance with the pol­icy of the Dan­ish gov­ern­ment or the wishes of the Dan­ish peo­ple.”

Per­haps this is the ex­pla­na­tion: Green­land has be­come sym­bolic. Pos­ses­sion of Green­land has be­come a sym­bol of Den­mark’s sta­tus as a mod­ern in­de­pen­dent de­vel­oped na­tion. The sym­bol­ism of sov­er­eignty and the shared his­tory is not threat­ened by US bases, nor home rule, nor eco­nomic fail­ure, and ap­par­ently is suffi­cient re­pay­ment for all the money poured down that hole.


  1. “Na­tional Affairs: Deep­freeze De­fense”, Time, 1947-01-27

    This week, as U.S. strate­gists stud­ied the az­imuthal map of the Arc­tic (see cut), it looked as though Se­ward had been right about Green­land; and Lans­ing wrong. The U.S. fron­tier is now on the shore of the Arc­tic Ocean. Thanks to “Se­ward’s Folly”, the fortress of North Amer­ica has a castel­lated out­post at the north­west an­gle in Alas­ka. But at the north­east an­gle it has only ten­u­ous base rights, to ex­pire with the peace.

    So long as U.S. ser­vice­men—even ra­dio bea­con op­er­a­tors and weath­er­men—re­main at Green­land out­posts, the U.S. is ex­posed to ver­bal snip­ing from Moscow for “keep­ing troops on for­eign soil.” But with the So­vi­ets try­ing to mus­cle in on Nor­way’s Spits­ber­gen (TIME, Jan. 20), Wash­ing­ton mil­i­tary men thought this might be as good a time as any to buy Green­land, if they could.

    Green­land’s 800,000 square miles make it the world’s largest is­land and sta­tion­ary air­craft car­ri­er. It would be as valu­able as Alaska dur­ing the next few years, be­fore bombers with a 10,000-mile range are in gen­eral use. It would be in­valu­able, in ei­ther con­ven­tional or push-but­ton war, as an ad­vance radar out­post. It would be a for­ward po­si­tion for fu­ture Rock­et-launch­ing sites. In peace or war it is the weather fac­tory for north­west Eu­rope, whose storms must be recorded as near the source as pos­si­ble.

    “Let’s Buy Green­land! A com­plete mis­sile-de­fense plan”, May 2001:

    It’s a lit­tle-known fact that Se­ward also was in­ter­ested in Green­land. In 1946—­long after Se­ward’s time—the United States seems to have made a for­mal offer of $1,184$1001946 mil­lion for Green­land, ac­cord­ing to de­clas­si­fied doc­u­ments dis­cov­ered about ten years ago in the Na­tional Archives. The pur­pose of the ac­qui­si­tion, wrote a state-de­part­ment offi­cial, was to pro­vide the United States with “valu­able bases from which to launch an air coun­teroffen­sive over the Arc­tic area in the event of at­tack.” Sec­re­tary of State James Byrnes sug­gested the idea to the Dan­ish for­eign min­is­ter, but the record does not re­veal whether the Danes for­mally turned down the offer or just ig­nored it.

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  2. This was a fairly diffi­cult and ugly cal­cu­la­tion; we’ll have to make some grue­some as­sump­tions and ap­prox­i­ma­tions here. For­tu­nate­ly, the to­tal value of Den­mark’s sub­sidy is­n’t that im­por­tant to the over­all ar­gu­ment be­cause all the other num­bers are so dis­mal. (Bet­ter cal­cu­la­tions are wel­come.)

    told me that Den­mark had a $188b GDP in 2005, and the Green­land ar­ti­cle claims a $512m sub­sidy in 2005, so the sub­sidy = 0.27% of that year’s GDP. A time-series of Dan­ish GDP is hard to come by, so I ul­ti­mately went to the Penn World Ta­ble Ver­sion 6.1 and asked it for “Real Gross Do­mes­tic In­come (RGDPL ad­justed for Terms of Trade changes)” (see “5. Ad­just­ment for Changes in the Terms of Trade: RGDPTT [20]” in their ap­pen­dix) be­tween 1950 and 2000. This is not the data I want­ed, but it is bet­ter than noth­ing.

    With a per­cent­age in mind and the data avail­able, the cal­cu­la­tion is fairly easy:

    sum $ map (0.0027 *) [8130.66, 7798.41, 8060.55, 8569.56, 8817.04, 8769.47, 8887.68,
        9210.72, 9413.06, 10273.77, 10773.04, 11357.40, 11907.76, 12060.87, 13044.24,
        13570.60, 13890.28, 14212.31, 14643.65, 15608.56, 15847.24, 16142.49, 16985.90,
        17415.87, 16536.29, 16373.67, 17309.97, 17415.79, 17812.97, 18054.61, 17644.67,
        17123.93, 17667.56, 18095.44, 18749.36, 19490.52, 20643.30, 20640.86, 21291.20,
        21333.19, 21573.87, 21649.87, 21933.63, 21789.76, 22917.37, 23532.41, 24086.62,
        24850.91, 25494.56, 25942.25, 26916.01]
    
    2274.11

    I’m not en­tirely sure how to in­ter­pret this fig­ure—only $2.3b or is it not even in mil­lions? So I took an al­ter­nate ap­proach. Na­tion­Mas­ter gives a 1950 Den­mark GDP per capita fig­ure (ap­par­ently re­al) of $6,683.00; the was 4,281,275 so mul­ti­ply is $28.6b, which seems rea­son­able com­pared with a 2005 GDP of $188b. As­sum­ing lin­ear growth, we can av­er­age them and mul­ti­ply by the in­ter­val () to get the to­tal GDP of $5956.5b, and we as­sumed a con­stant 0.27% of the GDP so bil­lion. That seems pretty rea­son­able. (Imag­ine work­ing back­wards: $0.5b in 2005 + ~$0.5b in 2004 + ~$0.5b in 2003, and we’re al­ready clos­ing in on a solid $2b.)↩︎

  3. I’m re­minded of B.H. Lid­dell Hart’s com­ment on one of the fol­lies of the Treaty of Ver­sailles in strip­ping Ger­many of its over­seas colonies of such du­bi­ous value to Ger­many (pg180, Strat­egy):

    Those who later op­posed any idea of re­turn­ing some of Ger­many’s con­fis­cated colonies, from con­cern that they might be­come a source of dan­ger, failed to take ac­count of the in­di­rect value to Britain of hav­ing places she might score early vic­to­ries…The psy­cho­log­i­cal im­por­tance of such coun­ter­poises should never be over­looked, es­pe­cially by a seapow­er. More­over, a con­ti­nen­tal pow­er’s pos­ses­sion of over­seas ter­ri­to­ries li­able to be­ing cut off is a curb on her ag­gres­sion. This was man­i­fest in Italy’s pro­longed hes­i­ta­tion to en­ter WWII in 1939—un­til her al­ly’s vic­tory seemed cer­tain. An en­tan­gle­ment of bases is a re­straint, though it may not be a pre­ven­tive.

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  4. Con­sider the strug­gle for the North Pole, which sounds valu­able:

    It all comes down to fu­ture rev­enue sources. Ac­cord­ing to a 2008 U.S. Ge­o­log­i­cal Sur­vey the Arc­tic Cir­cle might hide be­tween 13 and 30% of the world’s undis­cov­ered oil and gas re­sources un­der a thick layer of ice. Cli­mate change and the melt­ing of glac­i­ers are ex­pected to make much of those re­sources ac­ces­si­ble to drilling and min­ing faster than ex­pect­ed, as two new stud­ies sug­gested this week. Melt­ing ice could also open new trans­port routes and ben­e­fit those who con­trol them.

    And is only pos­si­ble for Den­mark to in­ter­fere with due to Green­land (“Nei­ther France nor Ger­many has yet to make such a claim, let alone some of its Nordic neigh­bors. It’s be­cause the King­dom of Den­mark pos­sesses the semi­-au­tonomous coun­try of Green­land, lo­cated right next to the Arc­tic.”), but Green­land is also the rea­son why Den­mark is wast­ing its efforts:

    Den­mark might not ex­clu­sively be in­ter­ested in the re­sources the North Pole re­gion has so far con­cealed, though. The U.N. claim was also closely mon­i­tored in Green­land, where sep­a­ratist sen­ti­ments have risen re­cent­ly. “There’s a strong push for in­de­pen­dence in Green­land, and Den­mark wants to show it’s ca­pa­ble of tak­ing its in­ter­est into ac­count,” Jon Rah­bek-Clem­mensen of Den­mark’s Syd­dansk Uni­ver­sity told the BBC. [“By tak­ing this step, Copen­hagen is send­ing a sig­nal [to Green­land]: ‘Lis­ten, we’re on your team’.”]

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  5. “A Melt­ing Green­land Weighs Per­ils Against Po­ten­tial”, NYT, 2012-09-23:

    It has long been known that Green­land sat upon vast min­eral lodes, and the Dan­ish gov­ern­ment has mapped them in­ter­mit­tently for decades. Niels Bohr, Den­mark’s No­bel Prize-win­ning nu­clear physi­cist and a mem­ber of the Man­hat­tan Pro­ject, vis­ited Narsaq in 1957 be­cause of its ura­nium de­posits. But pre­vi­ous at­tempts at min­ing mostly failed, prov­ing too ex­pen­sive in the in­clement con­di­tions. Now, warm­ing has al­tered the equa­tion. Green­land’s Bu­reau of Min­er­als and Pe­tro­le­um, charged with man­ag­ing the boom, cur­rently has 150 ac­tive li­censes for min­eral ex­plo­ration, up from 20 a decade ago. Al­to­geth­er, com­pa­nies spent $100 mil­lion ex­plor­ing Green­land’s de­posits last year, and sev­eral are ap­ply­ing for li­censes to be­gin con­struc­tion on new mi­nes, bear­ing gold, iron and zinc and rare earths. There are also for­eign com­pa­nies ex­plor­ing for off­shore oil. “For me, I would­n’t mind if the whole ice cap dis­ap­pears,” said Ole Chris­tiansen, the chief ex­ec­u­tive of Nunam­Min­er­als, Green­land’s largest home­grown min­ing com­pa­ny, as he picked his way along a pro­posed gold min­ing site up the fjord from Nuuk, Green­land’s cap­i­tal. “As it melts, we’re see­ing new places with very at­trac­tive ge­ol­o­gy.” The Black An­gel lead and zinc mine, which closed in 1990, is ap­ply­ing to re­open this year, said Jor­gen T. Ham­meken-Holm, who over­sees li­cens­ing at the coun­try’s min­ing bu­reau, “be­cause the ice is in re­treat and you’re get­ting much more to ex­plore.”

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  6. NYT 2012:

    But even as warm­ing tem­per­a­tures are up­end­ing tra­di­tional Green­landic life, they are also offer­ing up in­trigu­ing new op­por­tu­ni­ties for this state of 57,000—per­haps nowhere more so than here in Narsaq. Vast new de­posits of min­er­als and gems are be­ing dis­cov­ered as Green­land’s mas­sive ice cap re­cedes, form­ing the ba­sis of a po­ten­tially lu­cra­tive min­ing in­dus­try. One of the world’s largest de­posits of rare earth met­al­s—essen­tial for man­u­fac­tur­ing cell­phones, wind tur­bines and elec­tric cars—sits just out­side Narsaq. This could be mo­men­tous for Green­land, which has long re­lied on half a bil­lion dol­lars a year in wel­fare pay­ments from Den­mark, its par­ent state. Min­ing profits could help Green­land be­come eco­nom­i­cally self suffi­cient, and may some­day even ren­der it the first sov­er­eign na­tion cre­ated by global warm­ing.

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  7. NYT 2012:

    Many im­por­tant po­lit­i­cal de­ci­sions are pend­ing for Green­land’s gov­ern­ment. The na­tional la­bor union wants it to ban the use of low-wage crews from abroad be­cause it does not want lo­cal pay scales un­der­mined or jobs lost to for­eign work­ers. But there are not enough na­tive work­ers to build mines with­out out­side help.And for de­vel­op­ment to go for­ward, the gov­ern­ment will have to re­vise a long­stand­ing “zero tol­er­ance” pol­icy for the min­ing of ra­dioac­tive ma­te­ri­al, an out­growth of . Rare earth met­als are nearly al­ways in­ter­twined with some ra­dioac­tive el­e­ments. Si­mon Si­mon­sen, the mayor of South Green­land, which in­cludes Narsaq, said that most res­i­dents of the area had over­come ini­tial fears and ac­cepted the lev­els of ra­dioac­tive ma­te­r­ial in­volved. “If we don’t get this mine,” he said, “Narsaq will just get smaller and small­er.”

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  8. “Cur­rently al­most all sand is mined within 50 miles of where it is used, said Ja­son C. Wil­lett, a min­er­als com­mod­ity spe­cial­ist with the United States Ge­o­log­i­cal Sur­vey. “Once you move it any dis­tance it then costs too much,” he said."↩︎