Tyler Cowen makes an interesting claim:

7. Consider a deal that does make sense: the U.S. buying Greenland from the Greenlanders and also Denmark. Can we really in essence pay the 56,000 or so residents to give up their country and territory?

I agree that the Greenlanders would be unlikely to sell, but I’m skeptical of the claim that the purchase would benefit the US.

American schoolchildren are taught that our 1867 purchase of Alaska for $7.2 million dollars was a bargain, but I’ve never seen any convincing evidence to support that claim. Yes, Alaska produces lots of oil, but what about all of the US government money that goes to subside Alaska? What’s the net benefit?

In any case, Greenlanders are aware of their large oil reserves and would be unlikely to sell for $7 million, or even $7 billion. And as the world transitions to a low carbon future, the value of the oil (including the negative externalities) may be less than many people assume.

There are also diseconomies of scale in governance, which suggests that we might govern Greenland less effectively than did Denmark.

When we purchased southern Arizona from Mexico in 1854 (for $10 million), we should have pressed harder for Baja California. Even a small sliver of northern Baja (say the top 10%) would be far more valuable than Alaska. Heck, my own Orange County (only 800 square miles) is far more valuable than all of Alaska, a region roughly 800 times bigger. Greenland would be even less valuable than Alaska.

Greenland might have a minor military value, but I doubt it. Between the US, Canada, Britain, Norway, and Iceland, NATO already controls the North Atlantic. Given the pathetic performance of Russia’s military in Ukraine, I doubt they’ll be setting their eyes on the North Atlantic anytime soon.

There’s a lot of recent talk about state capacity. It’s pretty obvious that America’s state capacity has been in sharp decline for decades. Now is not the time to take on additional government responsibilities in Greenland (or outer space), rather we need to fix our dysfunctional government in its current areas of responsibility. For instance, just south of Orange County is the massive Camp Pendleton Marine Corps base. That land could be used to build a wonderful new city with a population larger than Alaska, with a glorious climate and a much smaller carbon footprint than the sort of places in Texas, Arizona and Florida where the extra population growth is currently expected to occur. These are the governance inefficiencies that we need to focus on addressing.

Don’t buy Greenland—sell Camp Pendleton.

Think big in terms of utility, not geography.