The supposedly harmonious capitalist world of global cooperation, led by a hegemonic state in alliance with other capitalist ‘democracies’ that set the rules for others, is over
Michael Roberts is an Economist in the City of London and a prolific blogger
Cross-posted from Michael Roberts’ blog
Today, US President Trump makes his speech to the assembled political and economic leaders of world capitalism at the World Economic Forum in Davos, Switzerland. The main issue before is, amazingly, the Arctic island of Greenland.
Greenland? – how did that name come about for an area that is mostly covered in ice? Apparently, it was a marketing ploy by Viking explorers who arrived over one thousand years ago. Calling it ‘green’ was an attempt to attract migrants to the area to occupy it. Ironically, Greenland is now becoming greener due to climate change. Recent research published in 2025 shows that Greenland’s ice sheet is melting rapidly, allowing vegetation to spread into areas once dominated by snow and ice. Over the past three decades, an estimated 11,000 square miles of Greenland’s ice sheet and glaciers have melted. That ice loss is slightly larger than the state of Massachusetts and represents about 1.6% of Greenland’s total ice and glacier cover.
Greenland is geographically part of the North American continent, but it is part (if autonomously) of Denmark. The Danes like to say the ‘Kingdom of Denmark’, just like the British talk of the ‘United Kingdom of Great Britain and Northern Ireland’. The monarchial colonial heritage remains. And we know what colonialism can mean for indigenous populations in North America.
The island had been a Norwegian possession in the 18th century, but Norway was part of a Danish empire and only gained independence in 1905. Denmark kept Greenland. During World War II, when Nazi Germany invaded Denmark, Greenlanders looked more to the US. But it has never been a US territory. After the war, Denmark resumed control of Greenland and in 1953, converted its officlal status from a colony to an ‘overseas county’ of Denmark. The people of Greenland were not consulted on this takeover. Greenland’s constitution actually calls the period from 1953 to 1979 a phase of “hidden colonisation”. Greenland eventually gained home rule in 1979, and in 1985, Greenlanders decided to leave the EEC, which it had joined as a part of Denmark in 1973.
The ‘cold war’ kicked off demands by the US to take over Greenland as a base for keeping the Soviet Union out of the Arctic. The US offered to buy Greenland for $100m. Denmark did not agree to sell, but it did agree to a treaty which allowed the US have a permanent military base on the island, forcing some Inuit families out of their homes to build the base. Later, it was discovered that Denmark had also agreed to allow US nuclear weapons there, some of which got contaminated with radioactive debris in 1968 – one bomb is still missing! So much for Denmark’s official ‘nuclear-free’ policy.
There were other consequences of Denmark’s colonial rule. In the 1960s and 1970s, Danish doctors implanted contraceptive IUDs in the wombs of thousands of Greenlandic women and girls without their consent or knowledge, as part of a campaign to limit Greenland’s birthrate. About half the fertile women in Greenland were forcibly fitted with contraception and 22 children were taken from their families in Greenland and transported to Denmark, where they were supposed to be educated as the next generation of the colony’s capable rulers! Racism against Greenlanders by Danes has been widespread. The slang phrase for heavy intoxication in Denmark is referred to being “as drunk as someone from Greenland”, a term so commonly used that it’s in the official Danish dictionary!
This is the tragedy of the people of Greenland: when they finally get the leverage to assert their dignity and demand recognition from their old master, they are now confronted with a new, much stronger and more ruthless master. Trump wants ownership, this is “psychologically needed”, he says. It’s not about security or minerals, it’s about the ambition that the French called “la gloire” (the glory). He has a yearning to become a historic president, to expand US territory.
Trump references the Monroe Doctrine, a maxim that has shaped American foreign policy for two centuries. He now refers to what he calls the ‘Donroe doctrine’. The Monroe doctrine was formulated by US President James Monroe in 1823. At the time, nearly all Spanish colonies in the Americas had either achieved or were close to independence. Monroe asserted that the New World and the Old World were to remain distinctly separate spheres of influence and thus further efforts by European powers to control or influence sovereign states in the region would be viewed as a threat to US security. In turn, the US would recognize and not interfere with existing European colonies, nor meddle in the internal affairs of European countries.
The Monroe doctrine, originally aimed at opposing European meddling in the Western Hemisphere, has since been invoked repeatedly by subsequent US presidents to justify US intervention in the region. The first direct challenge came after France installed Emperor Maximilian in Mexico in the 1860s. After the end of the Civil War, France relented under US pressure and withdrew. In 1904, President Theodore Roosevelt argued that the US should be allowed to intervene in any ‘unstable’ Latin American country. This became known as the Roosevelt Corollary, a justification made in a number of places, including supporting Panama’s secession from Colombia, which helped secure the Panama Canal Zone for the US. The Cold War era saw the Monroe Doctrine proclaimed as a ‘defence against communism’, such as the US demand in 1962 that Soviet missiles be withdrawn from Cuba, as well as the Reagan administration’s opposition to the leftist Sandinista government in Nicaragua.
The Donroe doctrine is not just some whim of Trump. It is embedded in the US administration’s latest National Security Strategy. As Trump said: “Under our new national security strategy, American dominance in the Western Hemisphere will never be questioned again.” Trump went on: “For decades, other administrations have neglected or even contributed to these growing security threats in the Western Hemisphere. Under the Trump administration, we are reasserting American power in a very powerful way in our home region.”
Is Greenland worth it economically? Its economy and population of 56,000 is small, heavily dependent on fisheries, and it survives largely on an annual block grant from Denmark of about DKK 3.9bn (€520mn), equivalent to roughly €9,000 per resident per year. According to the World Bank, Greenland’s GDP just $3.5–4bn (€3.2–3.7bn), with around 90% of its exports derived from fishery-related products.
So far, Greenland currently produces no rare earths, but the US Geological Survey estimates that it holds about 1.5 million tonnes of technologically vital mineable rare earth reserves, compared to potential rare earth resources in the ground of 36.1 million tonnes. These materials are used in products ranging from electric vehicle motors to fighter jets. In total, 55 critical-raw-material deposits have been identified in Greenland, yet only one is currently being mined. The raw geological value of Greenland’s known mineral resources could, in theory, exceed $4trn (€3.66trn), according to estimates by a study published by the American Action Forum (AAF). However, only a fraction of that — around $186bn — is considered realistically extractable under current market, regulatory and technological conditions. There is very little mining going on. Some US billionaires have set up companies to mine for nickel; the current US Commerce Secretary Howard Lutnick was CEO of a Greenland mining company.
Greenland is seriously underdeveloped and short of people. It has less than 100 miles of paved roads, suffers extreme Arctic conditions and has a very small workforce. To build up Greenland would cost hundred of billions. Most Greenlanders work for the local government (more 43% of 25,000 in work). Unemployment remains high, with the rest of the economy dependent upon demand for exports of shrimp and fish, industries which are heavily subsidised by the government. Indeed, Greenlanders have been leaving the island and the population is shrinking.
Those leaving have been replaced somewhat by poor Asian migrant workers, who are either doing jobs that Greenlanders don’t want to do or have set up small shops and businesses.
How much would Trump have to pay to buy Greenland from Denmark in such a ‘real estate deal’, as Trump calls it, were it agreed with Denmark? The Financial Times has suggested that a valuation of $1.1trn would be appropriate based on the island’s resources, but the New York Times produced a much lower estimate between $12.5bn and $77bn.
But of course, nobody has consulted Greenlanders. A January 2025 Verian Group’s poll found 85% of Greenlanders oppose leaving Denmark to join the United States, while just 6% support the idea. But who knows if that were to change with the right incentives. The Trump administration is considering direct payments — between $10,000 and $100,000 per Greenland resident as a way to nudge public sentiment in Greenland toward a US realignment.
Will Trump get his way? “Greenland is imperative for National and World security. There can be no going back,” Trump says. At Davos, US Treasury secretary, Scott Bessent mocked the attempts of European leaders to push back on the US threat to impose an extra 10% on US import tariffs unless Greenland is handed over. “I imagine they will form the dreaded European working group first, which seems to be their most forceful weapon” (ho, ho). Bessent said Europe is too weak to secure itself from Russian and Chinese influence in the Arctic and that is why Donald Trump is pushing to take control of Greenland.
More than likely Trump will succeed in getting Greenland and so be the first US president to expand America’s Western hemisphere empire. Military action is ruled out, but economic war is on the agenda unless the Europeans capitulate – and Europe is heavily dependent on US liquid natural gas imports for its energy and US military might to continue the war against the Russian invasion of Ukraine. So some ‘real estate deal’ is likely.
And then Trump will move on: in Latin America, his sights are on finally taking Cuba; in North America, Canada is still a target for annexation. This latter objective has led to a sharp change of tack by Canada’s prime minister Mark Carney. Carney is the arch representative of the international finance capital class, a former Goldman Sachs executive, former head of Canada’s central bank and the Bank of England. He returned to Canada and neatly took over the Liberal party that won the last election on a nationalist program of Canadian ‘independence’ from Trump’s takeover demands.
Now at Davos, Carney delivered a startling speech.: “I’ll speak today about the rupture in the world order, the end of the pleasant fiction and the dawn of a brutal reality in which great-power geopolitics is unconstrained….Every day we are reminded that we live in an era of great power rivalry. That the rules-based order is fading. That the strong do what they can, and the weak suffer what they must.”
With surprising honesty (after the fact, of course), Carney spelt out the reality of the international rules-based order, globalisation and the Washington Consensus. “For decades, countries like Canada prospered under what we called the rules-based international order. We joined its institutions, praised its principles, and benefited from its predictability. We could pursue values-based foreign policies under its protection. We knew the story of the international rules-based order was partially false. That, the strongest would exempt themselves when convenient. That trade rules were enforced asymmetrically. And that international law applied with varying rigour depending on the identity of the accused or the victim. BUT: “This fiction was useful, and American hegemony, in particular, helped provide public goods: open sea lanes, a stable financial system, collective security, and support for frameworks for resolving disputes.”
But that’s all over. “More recently, great powers began using economic integration as weapons. Tariffs as leverage. Financial infrastructure as coercion. Supply chains as vulnerabilities to be exploited. You cannot “live within the lie” of mutual benefit through integration when integration becomes the source of your subordination. The multilateral institutions on which middle powers relied— the WTO, the UN, the COP—the architecture of collective problem solving — are greatly diminished.”
What to do? “When the rules no longer protect you, you must protect yourself. But let us be clear-eyed about where this leads. A world of fortresses will be poorer, more fragile, and less sustainable.” Carney says he is leading the way for the major capitalist economies in this new era. “Canada was amongst the first to hear the wake-up call, leading us to fundamentally shift our strategic posture. Canadians know that our old, comfortable assumption that our geography and alliance memberships automatically conferred prosperity and security is no longer valid.”
Other leaders at Davos should recognise what is happening. “It means naming reality. Stop invoking the “rules-based international order” as though it still functions as advertised. Call the system what it is: a period where the most powerful pursue their interests using economic integration as a weapon of coercion.” The global reality is that “the old order is not coming back. We should not mourn it. Nostalgia is not a strategy. But from the fracture, we can build something better, stronger, and more just. This is the task of the middle powers, who have the most to lose from a world of fortresses and the most to gain from a world of genuine cooperation. The powerful have their power. But we have something too — the capacity to stop pretending, to name reality, to build our strength at home, and to act together.“
So Carney is the realist while the European leaders struggle to cope with ‘Donroe’ and the end of the Washington Consensus that supposedly confirmed a ‘Western alliance’ against the forces of ‘autocracy’ (Russia, China, Iran). Carney now wants the ‘middle powers’ to organise separately – a BRICS of the North? Canada has just signed a trade deal with China and is preparing to defend its independence from the hegemon on its border, once Trump snaps up Greenland.
The supposedly harmonious capitalist world of global cooperation, led by a hegemonic state in alliance with other capitalist ‘democracies’ that set the rules for others, is over. Now it is every nation for itself, looking for new alliances in a multi-polar world. Nothing is certain or predictable any more. No wonder gold, that safe haven asset of the past, is at a record high price.
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