President Trump wants the United States to buy Greenland, and European recalcitrance against the idea led him to impose further tariffs on the EU to spur negotiations. Trump’s negotiating techniques may be rough, but the geopolitical advantages of a U.S. takeover of Greenland are clear, and EU hatred of Trump should not be allowed to block negotiations. Whether or not the interim solution reached late in the week proves real, there is a Greenland purchase deal to be done and past such transactions can be used to set an appropriate price.
There are three major transactions of this kind in American history: the Louisiana Purchase of 1803, the Gadsden Purchase of 1854 and the Alaska Purchase of 1867 (the Adams-Onis Treaty of 1819 did not pay Spain directly for Florida but merely assumed residents’ claims). Each of these can be examined, both as to the price paid and the relative negotiating positions of the two sides of the deal, to determine an appropriate equivalent price for Greenland today. To get a modern equivalent of a 19th century price, the most generous conversion method is to inflate by the increase in nominal U.S. Gross Domestic Product between the two dates. This takes account not only of inflation and of increased purchasing power through technological change, but also of the population increase between the two dates, which makes remote real estate relatively more valuable today. By this comparison, we can see what the U.S. might pay for Greenland, and at what price Trump may have made the usual real estate tycoon mistake of overpaying to get a deal done.
The Louisiana Purchase, first, related to 827,000 square miles of territory, purchased from Napoleonic France in 1803 for $15 million. While mostly remote from existing settlements, Louisiana’s land was in a temperate zone, so even in 1803 could be seen as ripe for U.S. expansion. Both sides had strategic reasons for doing a deal. Neither side wanted the territory to fall into the hands of Britain, considerably richer than both at that time and with the potential to block U.S. expansion. (France had woven dreams of riches from the territory in the 1716-20 Mississippi Scheme, but by 1803 had abandoned them.) The U.S. had some difficulty raising the cash, but Napoleon had a desperate need of ready money, as the second phase of his war with Britain was about to begin.
U.S. Gross Domestic Product in 1803 was $493 million, according to “Measuring Worth;” in the third quarter of 2025 it was $31.1 trillion, at current prices. Hence the 2025 equivalent of the Louisiana purchase price was $946 billion. Greenland at 836,000 square miles is slightly larger than Louisiana, so a price of $956 billion would be an appropriate equivalent for the larger area. However, Louisiana was temperate land with substantial settlements such as New Orleans and St. Louis, so one would expect a premium to have been paid compared to a Greenland purchase today.
The Gadsden Purchase of 29,640 square miles in 1854 is of the three transactions psychologically the most closely equivalent to Greenland, because it involved an unwilling and disgruntled seller, Mexico, which had just lost much of its territory by the Mexican War and the 1848 Treaty of Guadalupe Hidalgo. The Purchase was negotiated by Secretary of War Jefferson Davis, who wished to construct a southern transcontinental railroad to connect the future Confederacy to California, and needed the Purchase to allow the railroad route to avoid the Rocky Mountains. (Davis’s survey work and the Purchase itself would later be used for the Southern Pacific Railroad, the second transcontinental railroad and the first year-round transcontinental railroad, completed in 1883.) Mexico was short of cash and the U.S. following the California gold discoveries, was both rich and liquid; hence the price of $10 million was high for such essentially worthless arid terrain.
U.S. GDP in 1854 was $3.78 billion; grossing up to 2025 gives a Gadsden purchase price of $82.2 billion today. Grossing up for Greenland’s much larger size gives an equivalent 2025 price of $2.32 trillion for Greenland. Jefferson Davis clearly overpaid to get the deal done; Mexico was in an excellent negotiating position.
The Alaska Purchase of 1867 from Russia was negotiated by Secretary of State William H Seward, and he paid remarkably little for Alaska’s 665,384 square miles of frozen wasteland. Both sides were short of cash, having recently undertaken the Civil War and serf emancipation, respectively. Alaska was strategic for neither side, being impossibly remote in steamship days from both countries’ centers of population. However, Seward as a Republican was a very good if slippery negotiator, whereas Russian Czar Alexander II’s ministers, being liberal intellectuals, were very bad negotiators. They had already in 1861 made a pig’s breakfast of serf emancipation by tying the serfs to uneconomically small plots of land and burdening them with 45-year debts to buy those plots, thus eliminating the possibility of serf entrepreneurship and over time turning a conservative peasantry into alienated revolutionaries ripe for 1917.
The price of $7.2 million paid for Alaska, when U.S. GDP was $8.47 billion, translates into a 2025 price of $26.43 billion, or $33.2 billion for the somewhat larger Greenland. The deal was “Seward’s Negotiating Triumph” in other words, not “Seward’s Folly.”
Even though he is nominally a Republican, Trump should not expect to sucker the EU the way Seward did Russia. Equally, he should not pay anything like as much per square mile as Jefferson Davis paid for Gadsden; if he does, he will have been the sucker. The third example, the Louisiana Purchase, also gives too high a figure at $956 billion; even in 1803 Louisiana, while no larger, was clearly more valuable than Greenland was then or now. Overall, I would suggest as a former merchant banker that $500 billion would be a fair price for Greenland today, but if Trump wished to go to $750 billion to assuage hurt European feelings (maybe with a $20 billion pledge – roughly $300,000 per capita – to keep the Greenlanders happy) he should probably do so. If the price is higher than that, Trump will have been the patsy.
The best strategic argument for the United States buying Greenland is that, given its size, it must have an abundance of natural resources, which are becoming a danger to U.S. and Western economies as China, which controls near-monopolies of rare earths and several other strategic metals, has shown itself eager to impose embargoes on the West. China has gained these near-monopolies because of dozy short-termist Western management and the eagerness of Western environmentalists to impose additional costs on mining ventures, which have made them cost-uncompetitive with Chinese competitors. For example, the West controls an excellent source of rare earths in the Mountain Pass deposit, but alas it is located in California, the principal home of environmental lunacy, so its previous owner, Molycorp, was forced to file for bankruptcy in 2015, leaving China with a near-monopoly on the most useful rare earths.
The Trump administration is making state strategic investments in MP Materials, which now controls the Mountain Pass deposit, and in several smaller rare earths companies, much to the fury of free market absolutists. As so often happens, free market absolutists are living in their own cuckoo land; state investments are essential in these cases, where an unfriendly foreign power controls a resource. The world is NOT flat, Thomas Friedman, and we must live with that fact. The German Second Reich, for example, faced an insuperable strategic problem of potential starvation in a war, since nitrate fertilizer sources were controlled by its enemies; only with the invention by BASF of the Haber-Bosch nitrogen fixation process in 1913 did it overcome that problem, which is why World War I happened when it did.
It has become clear that a Europe controlled by the oppressive EU bureaucracy and its economically self-destructive Marxist and environmentalist fantasies is no longer a reliable ally for the United States. Nor can it be relied upon to develop Greenland’s natural resources; it lacks the mining companies and is more likely to impose a plethora of idiotic environmentalist blockades against their development. Thus, in a world of malign and unscrupulous anti-capitalist states, one of which is the EU, the U.S. needs all the resources it can get. We read this week that Chinese contract workers were becoming common in Greenland; since Greenland’s population is only 57,000 and the Greenlanders are not militarized, even a modest force of Chinese “contract workers” could overwhelm the local population and seize Greenland’s resources and strategic position, essential to a U.S.-projected “Golden Dome” to protect the North American continent from intercontinental missile attack.
The flat-earth world of the economists’ models existed only between 1815 and 1871, while the benign and trade-friendly Britain controlled its arteries. Once a protectionist Germany and United States arose after 1871, that world had disappeared, although it took over 40 more years for British statesmen to realize this. Today, the “flat earth” dream of 1991-2001 has also disappeared – it was always largely an illusion, as it had not been before 1871.
Trump is the first American statesman to realize this reality; for this and other reasons he will almost certainly be remembered in 2200 as one of the greatest of American Presidents. Meanwhile Denmark, an innocent small power too small to flourish in the new world and the thoroughly malign EU should concentrate on getting the best price they can for Greenland and its inhabitants.
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(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)