Let Trump Be Trump, and Let Greenland Be Great For the First Time

Recently, our real estate developer in chief offered to purchase Greenland from the Danes. Why did he do it? There are several possibilities. His idea of manifest destiny is more ambitious than that of most people. Real estate developers develop real estate. Maybe, he thinks the fifty states are not large enough for our country. Perhaps it was to safeguard the U.S.’s Thule Air base, our northernmost staging area for troops. Who knows? Maybe he thinks there are potential Republican voters out there.

In any case, this offer to take the world’s largest island under the wing of the U.S. was met with howls of derision. Representative Steve Cohen, (D, Tennessee), dismissed the idea as a “cryonic memorial.” But the present president of the U.S. is not the first to occupy this office who expressed a similar interest. Harry Truman in 1946 offered $100 million in gold for this parcel of real estate.

However, leaders in Denmark were “not amused.” A former prime minister asked if this Trumpian initiative was a joke. The politician in charge of administering this 830,000 square mile ice-clad territory characterized it as a “terrible idea.” According to Lars Lokke Rasmussen, leader of the opposition in Denmark, Trump’s suggestion “must be an (untimely) April Fool’s Day joke.” In the view of Greenland's Ministry of Foreign of Affairs, "We're open for business, not for sale." According to Mette Frederiksen, Denmark's prime minister, "Greenland is not for sale" and Trump’s inquiry is “absurd.” It is difficult to be more emphatic than that.

What is the economist's take on all of this? It is, surely, to ask, what is the price offered? Of course Greenland should be for sale, at the right price! We dismal scientists have dollar signs on our eyeballs and cash registers for hearts, and we are proud of them.

But we are not biased in favor of the U.S. The same goes for us selling a part of our nation to someone else. Should we sell Rhode Island? Not to Iran, China, Russia, Mexico, Cuba or Venezuela, of course. That would be a bit too much. But we could sell this real estate to a non-threatening country such as Canada, Australia, or, Denmark itself. It all depends upon the price! If we are offered $10 for our smallest state, then, of course, we should spurn it. But, if the buyer is willing to give us the “sun, the moon and the stars” in return for it, why, then, it becomes a far better deal. Suppose this offer consists of a cure for cancer, a “chicken in every pot,” the absolute end to gun violence and world peace thrown in for good measure? Well, that is an offer we surely “cannot refuse,” as they say in the Godfather movies.

Why pick on this New England State? It is the tiniest one we have. It will hardly be missed, certainly not in comparison with the gains in the offing. The economist was asked, “How is your wife?” Came the answer: “Compared to what? Even the Rhode Islanders would be happy to “sell out” for this gargantuan offer.

There is an actual case in point to guide us on this matter. In 1989 Mitsubishi purchased Rockefeller Center. At what price? It paid $1.4 billion for an 80 percent share in this “jewel in the crown” of Manhattan. But shrieks of indignation were heard throughout the land. The whiners were motivated by the thought that, We beat them fair and square in World War Two, and now they are taking over our country? ‘Snot fair! In the event, six years this Japanese concern sold out its position in this property at a serious loss, but that is entirely another matter.

The point is, all voluntary commercial interactions are necessarily mutually beneficial in the ex ante sense of anticipations (no one buys or sells anything without contemplating a gain), but this does not always obtain ex post, after the fact. Usually, benefits prevails when looked at from that perspective too, but this is not always and necessarily the case. Think of the “lemon car,” in this regard.

Will the purchase of Greenland or the sale of Rhode Island benefit both parties ex ante? Yes, necessarily so. Ex post, usually, but not always. Trump is not as crazy as he is made out to be, at least not in this case.

So, let Trump be Trump. Real estate deals are in his blood. He is hard wired for them. Yes, Go Greenland! Let’s make Greenland Great For The First Time!