It remains an open question whether the Trump administration is interested in making an offer to purchase the island of Greenland from Denmark, but speculation about the potential price is already starting to circulate. According to one back-of-the-envelope calculation, a fair bid could be anywhere from $12.5 billion to $77 billion. That’s based on similar purchases of territory in the past and Greenland’s own economic potential.

How did Denmark acquire Greenland in the first place? Why does Greenland remain underdeveloped? And why don’t countries buy territory anymore?Those are just a few of the questions that came up in my recent conversation with FP economics columnist Adam Tooze on the podcast we co-host, Ones and Tooze. What follows is an excerpt, edited for length and clarity. For the full conversation, look for Ones and Tooze wherever you get your podcasts. And check out Adam’s Substack newsletter.

Cameron Abadi: How did Denmark come to possess Greenland in the first place? And how has the history of Danish colonialism affected life on the island?

Adam Tooze: There’s been human settlement on Greenland for thousands of years, but settlement by Europeans seems to have begun in the late ninth century with Vikings sailing out of Norway. Folks like Erik the Red, Erik’s son Leif Erikson, who we think also then pressed on to Newfoundland, were among the earliest European settlers of Newfoundland. It’s a settlement, a Norse settlement that’s well-established archeologically, from the 900s through to the medieval period, the 1450s, the 1500s, at which point it dies out. So the Norse settlement of Greenland is, in fact, an interesting example of community collapse. It’s been widely cited by people like Jared Diamond and others as an instance of ecological failure. There was a failure to manage conflicts with the local population, with the Inuit. There was cultural conservatism that meant that they weren’t able to adjust to a changing climate. And so, actually, the Norse settlement of Greenland peters out in the Middle Ages, except that no one let the Europeans know because it was such a long way away.

And in the meantime, as a result of dynastic politics in the late medieval period, as the Norse settlement on Greenland was actually facing its extinction, Denmark rises to its highest extent of power by way of dynastic connections to Norway on the one hand—we’re talking now late 1380s, 1400s—and Sweden as well. In 1397, Denmark becomes the center of the Kalmar Union. And as a result, possessions that were attached to Norway passed to the Danes, even as those possessions are actually losing their population. So this newly dynamited Denmark in the 1500s, 1600s—the Kalmar Union sheds Sweden, but Norway and Denmark remain attached to each other—becomes in its own right a rather ambitious colonial power. They establish Danish possessions in the Caribbean, there were Danish slave trading posts in West Africa, and someone has the idea that they ought to revive Danish Norwegian colonial claims that go all the way back to the Vikings. And so they send missionaries to Greenland in the early 1700s, only to discover that there are, in fact, no Norse-descended people left there. And so instead what they do is to simply convert the Inuit population and begin new settlement with quite catastrophic results because people coming from Europe in the 1700s tend to carry smallpox with them, which creates this belated, almost haphazard settlement of Greenland by this expanded Danish-Norwegian medieval early modern state. Denmark in the 1700s reaches its kind of maximum imperial extension and then falls on hard times in the 1800s.

In the early 1900s, the Norwegians finally gain full independence and immediately challenge the Danish claim—this is the first claim to say, well, what entitlement have you got to this? And an international court of arbitration, in fact, asserts that this population of a couple of 10,000 people, a huge distance from Denmark, should actually be attached to Denmark. This claim is then challenged again during World War II because the Danish government remains in Denmark during the war. Exiled resistance Danish ministers, it falls to them to negotiate with the United States over the future of Greenland, which has huge strategic significance in the conduct of the U-boat war, the submarine war during World War II. It’s a disowned rogue Danish diplomat who does a deal with the United States to secure Greenland as part of the Allied coalition in the war against Germany, which raises questions about Greenland’s future after World War II again. And once more, the Danes reassert this tenuous claim. They have a series of commissions that confirm that Greenland will remain with Denmark.

But ultimately, it’s a very precarious grip they hold. In the ’70s, autonomous movements in Greenland become more and more powerful. We’re talking about a society now of 30,000 to 40,000 people, so a small college town presiding over this giant territory. By the 1980s, the Greenlanders even gained the right to opt out of the European Communities, which Denmark is part of, over the issue of fishing, which is crucial to the Greenland economy. And from the 2000s onward, there’s a full-blown Greenland independence movement. Increasingly, Danish is resisted as an official language of Greenland. So it’s a fragile connection at best and one that has increasingly been resolving itself toward various claims for independence. Crucially, however, and it’s important to recognize this in light of America’s interest, is that the Greenlanders have representation in the Danish Parliament. So they are fully enfranchised Danish citizens. Of course, they’re a tiny group within a much bigger and richer society, so their interests don’t count for much in the Danish Parliament, but they are present and Denmark maintains its connection first by way of a trading monopoly, which we should say more about, but more recently through very generous levels of subsidy from Copenhagen and Denmark to Greenland.

CA: Does Greenland have significant untapped economic potential? And if that economic potential is untapped, what exactly explains the blockage? Is it a lack of political attention that the Danish government offers or a lack of capital?

AT: So the answer for a long time was very clear. I mean, what defined the Greenland economy was fishing or hunting—that’s seals, whales, cod, shrimp. That’s the story. And for much of Greenland’s history, until the recent period, its trade, its economy was entirely defined by the monopoly held by the so-called KGH, the Royal Greenland Trading Department, which monopolized all imports and exports from Greenland. Greenland was a very significant base for whaling and seal hunting. And all the way down to the present day, that grim business continues in Greenland. It’s one of the major killers of seals and whales. In the early 20th century, Greenland became the base for one of the most powerful cod-fishing fleets in the world, operating in the huge shoals of, you know, Atlantic cod. And then as those fisheries became exhausted by the intrusion of fishing fleets from all over the world—but notably from the Soviet Union, the United States, and Europe—they moved to shrimp. And that seafood accounts for the vast majority of Greenland’s exports all the way down to the present day.

Greenland is known to have other resources, notably ore. One of the things that gave Greenland its significance in World War II was that it’s a major source of cryolite, which is crucial in the production of aluminum. But it’s also thought now that Greenland has reserves of perhaps 43 of the 50 minerals that are deemed critical by the United States in the current moment of supply chain anxiety. Greenland may have lots of those. And there are also people who believe that Greenland has very substantial amounts of offshore oil, which is waiting to be developed. There were some very large estimates of 110 billion barrels-plus that might be there, which would put Greenland among the larger, medium-sized, you know, reserve fields. There’s also the possibility of uranium and other rare-earth deposits.

The reason why this has not been developed in the recent period is no longer the monopoly of KGH but more mundane economics and politics. The investment necessary to develop very large-scale ore mining or oil production would be daunting. The interest in Greenland’s oil goes up when the oil price is high and goes down when the oil price moderates and as other sources of supply come on stream. And furthermore, Greenland’s own politics, which is, you know, quite turbulent and quite insistent on its autonomy; in 2021, Greenland’s parliament banned all uranium mining, casting a pall over other areas of mineral prospecting. So there is local political risk, there are market risks, there are very substantial infrastructure costs, and those are really the main obstacles to Greenland’s further economic development.

CA: The United States bought the Danish West Indies in the early 20th century and also Alaska from Russia in the previous century—yet this kind of purchasing of territory doesn’t seem so common anymore. Why has this practice faded in more recent times?

AT: Yeah, it’s really a fascinating question. I mean, if you look back, according to one itemization I’ve seen, in the 19th century, there were 13 instances of large-scale transfer of territory in exchange for payment. So, in other words, buying territory. And in the 20th century, only six. And the United States is the main participant in all of those transactions, and all of the really large transactions of the 19th and early 20th centuries were done by the United States: the Louisiana Purchase, the purchases from Mexico, and then Alaska. And in the age of high imperialism, in the late 19th and early 20th centuries, the United States paid compensation to Spain for the transfer of the Philippines. And then during World War I, the Wilson administration opened negotiations with Denmark for the purchase of the Danish Caribbean colonies, which then became the U.S. Virgin Islands. The transaction was in part motivated by strategic interests, with Denmark not wanting to pay the bill or take the responsibility for governing its Caribbean possessions and the United States anxious to patrol the boundaries of the Monroe Doctrine and also exclude German interests.

As recently as the 1940s, the United States was still in the business of cash-for-territory deals. And the largest one that actually went through was the destroyers-for-bases deal that was done with Britain under the pressure of Nazi attack early in World War II, with Britain trading very long-term leases in its Caribbean possessions for a collection of rather antique American destroyers that were crucial for defending the British convoys in the struggle against the U-boats. And at the end of World War II, the United States made another offer to Denmark for Greenland. So, on the basis of the 1941 treaty, the United States offered Denmark $100 million in gold bullion for Greenland, which the Danes politely declined. And it’s out of that embarrassing maneuver on the part of the Americans and the Danes that the treaty emerged to establish the American bases in Greenland during the Cold War.

So there is a continuity here of imperial practice that goes back to the 19th century that has been formative for the expansion of American territory and American, what else to call it, empire. And I think the fundamental reason why it has increasingly died out in the course of the 20th century—the recent sale of Egyptian territory to Saudi Arabia may be the last instance that we’ve seen in many decades—is self-determination. The right to self-determination of people who inhabit a land and a homeland trumps all other claims—I mean, already in the rhetoric of the Versailles peace treaty after World War I, you can see that this was no longer acceptable as a way of conducting policy. And so the territorial transfers that take place have to be legitimated either on the principle of ethnic geography and claims to creating homogenous nation states or the conduct of referenda of different types. And that, I think, would be the precondition for any of this to be even remotely serious. How the Greenlanders would vote, I think, is an open question. It would depend perhaps on the offer the United States made because they’re certainly not enthusiastic and loyal citizens of Denmark.

But whether or not they would choose whatever offer the Americans made, I think that’s the thing that Washington hasn’t really wrapped its head around, which is that if you wanted to do this, you would actually need to appeal to the Greenlanders, not to Copenhagen. Figuring out the price that Denmark would accept, which of course the Danes will flatly refuse, is not actually your problem. The problem is, can you get the local population to vote for you? What is the subsidy regime that would make it attractive for Greenlanders to leave Denmark and join the United States? What is the package of rights and subsidies that make that move attractive is the question that’s open and doesn’t really seem to have been posed in that form by folks in Washington.