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THE BRITISH MONARCHY
A NATIONAL TREASURE Timothy Noah: HE’S WORTH WHAT? ... Why King Charles Is England’s Biggest Moocher ... The British monarchy is a governmental anachronism, but as a capitalist enterprise, sadly, it may be the future. 
King Charles III and Princess Anne at a funeral procession of Elizabeth II MAX MUMBY/GETTY IMAGES Original article: https://newrepublic.com/article/167730/king-charles-englands-biggest-moocher Peter Burgess COMMENTARY The British Monarchy is certainly a huge anachronism ... or is it? I was born in the UK in 1940 and learned about the Royal Family as a very young child. The Monarchy was never perfect, but the Monarchy has been part of the British tradition for a very long time. There is value in tradition, though difficult to measure and almost impossible to get agreement on what the number should be! As some people know, for several decades I have been interested in the challenge of measuring values over and beyond the value associated with money. This is not easy, and made more difficult by the very entrenched and powerful systems of accounting and reporting that have dominated economic and business management for decades, if not centuries. Economics in the era of Adam Smith understood several factors were involved in economic activity ... specifically they were land, labor and capital. This is not very different from the Triple Bottom Line or Planet, People and Profit articulated by John Elkington in the 1990s as a better way of assessing and reporting corporate performance. During my own career I have been comfortable with using profit and return on investment as important measures for business performance, but not enough for the evaluation of government performance and national performance where the social impact needs to be taken into consideration. For most of my international work around economic development and humanitarian assistance I used basic measures of social impact in addition to metrics around financial costs and benefits. Around the end of the 1990s I started to incorporate environmental impact as a third segment of a comprehensive integrated system. I concluded a long time ago that a money metric like the dollar, pound sterling or Euro was not going to be a good measure for a coherent socio-envir-economic system ... a good measure does not change its size over time but is a constant. Money does not have this characteristic. Part of the solution has to do with measuring change rather than measuring an absolute value. I started to realize that change had importance when I was working with refugees and realized that happiness was significantly impacted by whether a situation was 'getting better' or 'getting worse' ... it was the direction and pace of change that mattered. This insight came from observing people who were in awful circumstances, but it also explains how a lot of people who are quite wealthy are also quite unhappy ... especially when their wealth is declining. The decline is creating unhappiness much more than any day to day material hardship. Ultra wealthy people seem to be driven to get more even though getting more actually changes very little in a material sense. A conventional financial analysis of the Royal Family along the lines of a business analysis turns up more questions than it produces answers, as does a conventional economic analysis or a conventional social impact analysis. What I find is that the sort of analysis that I am advocating as a new direction of socio-enviro-economic analysis and reporting makes more sense for an analysis of the British Monarchy just as it does for the analysis and reporting of all the other actors and activities in the socio-enviro-economic system. I seems to me that it is self-evident that the British Monarchy has a very tangible intangible value ... not a concept that is easy to number using any of the prevailing conventional systems of financial or economic measurement ... but truly valuable, nevertheless, and evidenced by the massive line of people who have waited hours and hours to pay their respects at Her Majesty's Lying-in-State. I am now in the USA, but when Winston Churchill died in 1965 I was in the UK and went to Westminster Hall for his Lying-in-State. I understand why it is that so many people want to pay their respects at this time by going to Hew Majesty's Lying in State. I would certainly go, if I was in the London area in the UK. Peter Burgess | ||
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HE’S WORTH WHAT? ... Why King Charles Is England’s Biggest Moocher
The British monarchy is a governmental anachronism, but as a capitalist enterprise, sadly, it may be the future. Timothy Noah @TimothyNoah1 ... Timothy Noah is a New Republic staff writer and author of The Great Divergence: America’s Growing Inequality Crisis and What We Can Do About It. The New Republic September 14, 2022 In George Bernard Shaw’s 1928 play The Apple Cart, a satire set in an indeterminate future, a British prime minster and his Cabinet blackmail the king into giving up the crown’s remaining prerogatives. The king consents, then upsets the titular apple cart by saying he will abdicate and stand for Parliament. The elected officials immediately recognize that as ex-monarch he can capitalize on his popularity to become prime minister and turn them all out of office. So they back down, leaving the monarchy’s powers unmolested. Shaw was no monarchist—he declined a royal order of merit—but neither did he care much for democracy. “The people cannot govern,” Shaw wrote in his preface to The Apple Cart. “Every citizen cannot be a ruler any more than every boy can be an engine driver or a pirate king.” To dramatize this point, in The Apple Cart Shaw’s prime minister and Cabinet are controlled by a mammoth corporation called Breakages Limited, leaving government entirely in the hands of plutocrats. It doesn’t pay to take Shaw’s politics at this late stage of his life too seriously. The Fabian socialist was 72 and nursing an ill-considered admiration for Benito Mussolini (who did not, it can’t be repeated enough, make Italian trains run on time). Still, it’s fun to speculate how Shaw, who died in 1950, might have reacted to the evident reality that the British monarchy has itself become a mammoth corporation, or at least a decently sized one, and that King Charles III is a sort of cartoon rentier capitalist. At last, an explanation for this king-and-queen business that we Yanks can understand. Please bear with me as I show you an equation. There’s a good chance you’ve seen it before. The British royal family is a superb petri dish in which to test the French economist Thomas Piketty’s hypothesis that r > g where r is the return on capital and g is the rate of economic growth. That is a matter of great interest here in the United States, where the Baby Boom generation (of whom the new king is a member) will leave behind an estimated $68 trillion in wealth even as taxation and other limits on wealth inheritance wither away. (See my December 24 piece, “Defund the Dead.”) Piketty warns that the U.S., France, the United Kingdom, and any number of other advanced economies may be returning to the “patrimonial capitalism” that prevailed before the twentieth century. In that sense the British monarchy, which for a century has been understood to be an anachronism, must now be recognized as way ahead of the curve. Nothing is more patrimonial than a royal line of succession. The vital question surrounding r > g is whether a third variable, invisible to economists but familiar to anybody who reads the tabloids, will reduce r sufficiently to render the formula incorrect. That variable is dissipation (d). Allow me to revise Piketty’s hypothesis: r-d > g where r is the return on capital; d is how much of that capital gets pissed away through taxation, procreation, and reckless living; and g represents the rate of economic growth. In effect, compounding interest (historically low for the past decade but lately headed upward) must outrun the costs of taxation (declining globally), procreation (declining in wealthier countries), and the loafing and degeneracy that attend the inheritance of great fortunes. In the case of the royal family, taxation is at worst a minor concern. Writing in The Washington Post, Adam Taylor explains that although the British government usually collects a not-inconsiderable 40 percent on inheritances exceeding $380,000, Charles won’t pay a cent because he’s exempted. However much of the queen’s roughly $500 million in personal assets is bequeathed to Charles will not be taxed. However much of the queen’s assets pass to Charles’s siblings and to his and their children, who run the spectrum from mild indolence to possibly illegal degeneracy, will be taxed. The great majority of the $500 million, presumably, will go directly to Charles. That imposes a useful limit to how much of the royal fortune can be burned through by riding on horseback, hosting Grand Knockout tournaments, dressing up as a Nazi, or allegedly sexually abusing underage girls. The royals are of course worth a hell of a lot more than $500 million. Forbes put their collective worth at $28 billion. But much of that is controlled by the British government and therefore more like a jumbo-size expense account. An exception is the $950 million Duchy (i.e., dukedom) of Lancaster, which Charles inherited from his mother. The Duchy of Lancaster, which dates to 1362, could be a poster child for r > g. It passes from sovereign to sovereign, bypassing both taxes and royal wastrels (though the queen gave much of the proceeds to her children). A New York Times story by Jane Bradley and Euan Ward that was also posted Tuesday trained its sights on the Duchy of Cornwall, in Charles’s possession for the past half-century and now transferred to Prince William because it always passes from one royal heir apparent to the next. The Duchy of Cornwall, which dates to 1337, is valued at about $1.4 billion, an even bigger pile of cash than the Duchy of Lancaster’s. Royal heirs apparent are riskier as conservators than monarchs because they incline toward loafing and degeneracy. (See Shakespeare’s Henry IV, parts one and two). But Prince Charles, his Tampax fetish notwithstanding, was no Prince Hal. He husbanded his wealth with alacrity. The Duchy’s financial performance, lackluster when Charles inherited it, is now shipshape, according to the Times. Score another victory for r > g. Part of the secret to making the return on capital outrun taxes and dissipation is to invest whenever you can in offshore tax havens. The 2017 Paradise Papers revealed that the Duchy of Lancaster, while in the queen’s possession, invested millions of pounds in the Cayman Islands and that the Duchy of Cornwall, while in Prince Charles’s possession, invested millions of pounds in Bermuda and other offshore tax havens. In both instances, Buckingham Palace insisted that the royals enjoyed no tax benefit from the arrangement, which I find hard to believe. (In the case of the queen’s investment in the Caymans, The Guardian explained the scheme was arranged to avoid U.S. taxes, so perhaps the palace spokespeople meant the royals got no British tax benefit from the arrangement.) As a form of government, the British monarchy is a ridiculous anachronism. But as a form of capitalism, it’s the cutting edge. Much like the economies of the U.S. and Britain, the crown accumulates wealth the same way it governs—by not doing anything. In the great sweep of history, this is new. Back in medieval times, whenever an English king felt a little short on cash, he’d start a war (usually in France) and fatten his purse through taxes and theft. When the Industrial Revolution came along, England and later America accumulated wealth by manufacturing goods. That sort of vigorous activity is no longer how you get rich. Today finance, insurance, and real estate represent about 20 percent of gross domestic product in the U.S. and roughly the same in the U.K. That’s about twice their relative size when Elizabeth became queen in 1952. The central activity in finance, insurance, and real estate is waiting around for capital to accumulate (or trading to make it accumulate faster). To a remarkable extent, that’s what today’s economy is: sitting at your desk (or throne) and watching your capital grow. Even during what may be a recession, with compensation costs rising at a pretty brisk annual rate of 5.1 percent, corporate profits are rising faster. Capital’s share of national income is going up, labor’s share is going down, and last year the median price increase in houses exceeded median income. Working for a paycheck? Don’t be a sucker. Ours is now a rentier economy. King Charles III and his mother pioneered it by being, respectively, a constitutional monarch with no power and a constitutional monarch-in-waiting with even less power. They just watched their royal fortune grow. Now that’s what all capitalists do. Only the commoners get left out. Timothy Noah @TimothyNoah1 ... Timothy Noah is a New Republic staff writer and author of The Great Divergence: America’s Growing Inequality Crisis and What We Can Do About It. Editor’s Picks How Britain Built an Empire of Fraud ... Geoffrey Wheatcroft
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