In the wake of the abdication of King Juan Carlos of Spain, the New York Times ran a short piece on monarchies noting that 12 monarchies still survive in Europe with eight of them being liberal democracies – Belgium, Britain, Denmark, Luxembourg, the Netherlands, Norway, Spain and Sweden. Incidentally, these Scandinavian monarchies in particular are among the most highly developed countries on the planet – peaceable kingdoms with high material and social standards of living.
I don’t think the main economic contribution of these remaining monarchies is in terms of their injection of expenditure flows via tourism activities or as a result of investments from their wealth portfolios. As the New York Times piece argued, monarchs in these countries represent continuity and an institution that rises above politics, which is a political role. On a more pedestrian level, the fact that these particular families have survived as long as they have also suggests that along with good luck, there may be a “political survival” gene that has been passed on that makes these families fairly shrewd politicians. The twentieth century is littered with royal families that have not been very politically astute.
So what is the role of monarchy in a modern economy like Sweden or the UK? I think the New York Times piece is right about monarchy – where it has persisted – being a unifying symbol that rises above politics. More importantly, I think that in these countries, it has survived because it has evolved into an institution that separates the head of government from the head of state. This manifests itself most dramatically in the British Parliamentary tradition where there is a head of government and a loyal opposition who are both loyal to the monarch. This means one can have differing political and policy views without being considered disloyal. In democracies where there are strong political divides and a monarchy, one can see the modern monarch as a unifying figure.
Take the case of the United States where the President is both Head of State and Head of Government. I think the arrangement can give rise to very strong conflicting emotions when there are contentious issues because if one opposes the President on a policy issue, one is also opposing the Head of State –a symbol of the country. I think the way Americans have been able to deal with this is with the elevation of physical symbols such as the flag as a center of their affection and attention. The American fascination with celebrities and the British royal family may simply be a hankering after unifying symbols given the rancor of political discourse.
In any event, institutional strength and political stability is a core foundation for a successful economy and while this has been achieved in a variety of ways around the world, in European countries where the monarchy remains, it remains because it has evolved to successfully play an institutional role. Those that do not evolve go the way of the Hohenzollerns, the Hapsburgs, the Bourbons and the House of Savoy.