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Has a sovereign state selling off land to another sovereign state ever been considered profitable in hindsight?
by steve19 11y ago
Has a sovereign state selling off land to another sovereign state ever been considered profitable in hindsight?
- eli 11y agoIt's almost always true that holding real estate is better in the long view than selling it. I expect my house to continue to rise in value indefinitely. Doesn't mean it's never the right call to sell it.
- gwern 11y ago> It's almost always true that holding real estate is better in the long view than selling it. Actually, the usual belief held by economists is the opposite: that it's almost never true that holding real estate is better in the long view than selling it and investing it, since the value of land as a fraction of industrialized economies has been constantly falling and conversely, labor/capital rising. (There's also the diversification and uncompensated risk issue.)
- Trombone12 11y agoKeep in mind that economist tend to have a long view goes between 1970 and the present (Piketty goes so far back as 1700, which is why he is famous).
- eli 11y agoI think the was my point: it's totally plausible that a country selling off land could have been "profitable" depending on what the country was going to do with the proceeds.
- fiatmoney 11y agoMany of those instances are selling what one is unable to hold. There was, for instance, ~zero chance that France would end up actually retaining the Louisiana Purchase lands in perpetuity, so the only question was whether they'd get something in return (and they quite needed the money at the time), or lose them in an expensive war later.
- kryptiskt 11y agoSweden sold off Swedish Pomerania at the end of the Napoleonic wars in a good piece of business. Initially they wanted to swap it for Norway with Denmark, but as the Norwegians balked they never handed it over and then the Prussians swooped in and bought that and other bits and pieces off Sweden and Denmark. It was a good piece of business as the defense of it would have cost resources but it still would have been a walkover against a serious opponent. And they would have lost it soon enough, at the latest in 1848 and the upheaval then.
- tsotha 11y agoYou could make almost exactly the same argument for Napoleon's sale to the US of French territories in North America.
- deleted 11y ago[deleted]
- chimeracoder 11y agoIt's debated whether the US has made money off of the purchase of Alaska from Russia or not[0]. The question of whether the US has made a return is not exactly the same as whether Russia profited off of the transaction (the costs to the US of governing the property may not be representative of what Russia would have paid), but they are related. [0] https://en.wikipedia.org/wiki/Alaska_Purchase https://en.wikipedia.org/wiki/Alaska_Purchase
- mcv 11y agoThe Dutch Republic traded New Amsterdam (modern day New York) to England in exchange for Suriname. But after England had demonstrated that they could take New Amsterdam whenever they wanted, so getting something in exchange was certainly better than nothing.