If the US were to buy Greenland, how would one set the price? For companies and other assets, there are valuation methods. But for an entire economy, it would be more complicated, and not just for financial reasons. Political considerations would also have to be considered. So is sovereignty priceless in the modern world? In recent weeks, Donald Trump has repeatedly expressed his desire for the US to take "ownership and control" of Greenland, an autonomous territory of the Kingdom of Denmark. Trump first floated the idea of the US acquiring Greenland in 2019. At the time, he rightly pointed out that he was not the first US president to make such a proposal. These days, however, the sale of territory between countries is rare. Still, the question is how would one decide what to pay for an entire state, territory or nation?
The idea is not new
The United States has been keenly interested in Greenland's strategic position since the early days of the Cold War. In 1946, then-President Harry Truman offered to buy the Danish territory for $100m in gold. The Danes are said to have responded to that offer in much the same way they did in 2019 and again in 2025: "No, thank you". Today, the purchase of territory by one sovereign nation from another may seem like a strange idea, but it should be remembered that this has happened many times in the past. In the early 19th century, for example, the United States bought vast territories during its westward expansion. These included the Louisiana Purchase from France in 1803 for $15m, equivalent to $416m in 2024 dollars. About half a century later, after the Mexican-American War, the United States paid Mexico for large tracts of territory. The United States also bought Alaska from Russia in 1867 for $7.2m ($160m today). In 1917, the United States purchased the US Virgin Islands from Denmark for $25m ($600m today). And the United States was not the only country to resort to this procedure. Other countries, such as Japan, Pakistan, Russia, Germany and Saudi Arabia, have purchased territories and extended jurisdiction over their inhabitants to hold territory, gain access to important waterways or simply control geographic buffer zones.
How much is a country worth?
Valuing a country is not an easy task. Unlike companies or financial assets, countries are made up of a mix of tangible and intangible elements that are difficult to measure simply economically. A logical starting point is gross domestic product (GDP). In short, GDP represents the value of all final goods and services produced in an economy in a given period, usually a year. But does it really reflect the true "value" of an economy? When one buys something, the benefits last into the future. Therefore, setting a purchase price based on the value produced in each period may not adequately reflect the value of that object to the buyer. The ability to continue to generate value in the future must be considered. Greenland's productive resources include not only the existing businesses, management and workers used to generate its current GDP estimated at $3.236 trillion in 2021, but also its capacity to change and improve its future GDP. This will depend on the expected productivity of these resources in the future. There are other attributes of value that are not considered in GDP. These include the quality of capital (human and infrastructure), quality of life, natural resources and strategic location.
Beyond what already exists, Greenland's untapped resources are what make it so valuable. Greenland has been mining coal for decades and has significant proven reserves. Its subsoil has been shown to contain rare earths, precious metals, graphite and uranium, as well as gold, silver, copper, lead, zinc and marble. Finally, there is major potential for oil exploration off Greenland's waters. None of this potential is reflected in Greenland's current GDP.
Easier to Value Assets
It is much easier to put a price on a major national asset, such as the Panama Canal, which Trump also wants to bring under US control. Asset pricing theory, which dates to the 18th century, is a fundamental part of the discipline of audit. While the "asset pricing model" has evolved over time, it essentially involves estimating the future net revenue streams of an asset, based on a few inputs. In the case of the Panama Canal, this would involve estimating the future net revenue that could be generated, based on factors such as royalties associated with its use and the expected level of traffic. Expected costs for equipment maintenance and any anticipated damages must then be subtracted. To determine the price, the probability of actually realizing this net revenue must also be estimated. Ultimately, the value of such an asset is usually determined by calculating the present value of all of these future revenue streams.
The power of historical ties
Nationalism also plays an important role. Lands are deeply tied to national identity, and selling them is often perceived as a betrayal. Governments, as guardians of national pride, are reluctant to accept offers, no matter how tempting. Added to this is a strong international norm against changing borders, born of the fear that a territorial adjustment could trigger a cascade of claims and conflicts elsewhere. In today's world, buying a country or one of its territories is perhaps no more than a thought experiment. Nations are political, cultural and historical entities that resist commercialisation. Or are they for very business-minded presidents?
Dr Ovidiu Tierean is a senior advisor at PKF Malta