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Thursday, August 26, 2010

Was the Alaska Purchase a Good Deal?

Was the Alaska Purchase a Good Deal? By MICHAEL POWELL

AUGUST 20, 2010

http://economix.blogs.nytimes.com/2010/08/20/was-the-alaska-purchase-a-good-deal/

Several readers rather better versed in Alaska than most have written to take issue with the University of Iowa economist David Barker’s essay (mentioned here earlier this week) titled “Was the Alaska Purchase a Good Deal?”

His intentionally provocative answer: Not really.

Mr. Barker argues that Alaska, like much of the American West, is dependent on the federal government. The United States, he notes, allowed Alaskans, as a condition of statehood, to keep 90 percent of the profits from the oil fields, and he says oil rents and royalties from the North Slope oil fields peaked in 1982 at $24 million.

He notes that polar winds, great piles of snow, and rain and more rain, not to mention achingly vast distances, make the state a most expensive property to maintain. The United States purchased Alaska from

Russia

in 1867 for $7.2 million, a seeming bargain that becomes less so in Mr. Barker’s rendering, as he calculates that amounts to $16.5 billion in 2007 dollars, if one adjusts for the relative size of the national economy then and now.

Now come along the rebuttals.

Professor Scott Goldsmith of the University of Alaska Anchorage and the history professor Terrence Cole of the University of Alaska, Fairbanks, pose a similar question: Could many states withstand the pitiless math Mr. Barker employs?

[…]

http://economix.blogs.nytimes.com/2010/08/20/was-the-alaska-purchase-a-good-deal/

20100820 NYT Was the Alaska Purchase a Good Deal

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