A royal joke after a hard day's work

THE STORY of the week may not be such bad news for the Royal Family as is being popularly supposed. For there are powerful historical reasons to believe that the new relationship that is evolving between the royals and the British people is one which has in the past been the most comfortable and, in economic terms, the most successful.

We have somehow gone back to an 18th and early 19th century monarchy. The key point here is that the country's greatest period of relative economic success was from the late 1600s to around 1860. For example, in the 1690s British living standards were not materially higher than they were in its closest neighbour, France. Amsterdam, not London, was still the world's most important financial centre and the whole notion of Britain as an international trading nation, let alone the first industrial one, did not exist.

Then a number of things came together towards the end of the century, including the founding of the Bank of England in 1694, which gradually enabled Britain to dominate the world, first by trade, then by industry.

Then, around 1860, the economy began to lose its innovativeness and vitality. From then on, there has been a sustained period of relative economic decline. But while we know that this change happened and can see several manifestations of it, it is not fully understood.

Why did so many Britons lose many of their economic ambitions and turn their energies to enjoying a life of luxury? Why did the empire, originally essentially a commercial entity designed to make Britain richer, become more of a ceremonial one, which sapped scarce financial and military resources?

These are giant questions, to which there are no single, simple answers. What one can do, however, is to point to the link between the attitudes of those who would have been called the ruling classes (and are now dubbed the 'opinion formers') to the royals and the economic vitality of the country.

For most of the period when the country was, in economic terms, most successful, the people who ran the show looked down on royalty. It is almost as though to be successful as a nation we have needed a monarchy that we can regard as irrelevant to the main business of the country - getting richer - and can also be used as a source of entertainment and amusement. We need to be able to giggle and sneer. That is certainly what the country did during the 18th century and the first half of the 19th. Attitudes to successive monarchs are very well documented.

While there was respect for William of Orange - a foreigner hired (or rather married]) to do the job - there was little affection for Queen Anne. The contempt for the early Hanoverians was legendary, and George III was not just seriously incompetent - he also went mad.

'Prinny', the Prince Regent who became George IV, and who had his own difficulties with his wife, Caroline, was rather liked by one segment of society. But this was because of his success as an entertainer rather than his competence as a monarch. He certainly was not respected: shortly after his death in 1830, the Times wrote: 'There never was an individual less regretted by his fellow-creatures than this deceased king.' Finally, as is often forgotten, Queen Victoria was extremely unpopular during the early years of her reign.

Throughout this period the royals were much less grand (and also less rich) than the families who ran the country. It suited these families to have royals who were imported foreigners, incompetents or buffoons. Once Victoria, who took herself rather seriously, was securely on the throne, and these families began as a result to take royalty seriously too, they lost their zest and vigour, and became deferential.

We think of deference to royalty as normal because it has been the custom for the best part of 130 years. But it is relatively recent, and destructive. I suspect that there is some link between the rise in deference and the decline in economic performance. Companies that suffer from an excess of deference are liable to deliver poor performance. Why should that not be true for countries too?

There are marked similarities between attitudes to royalty now and those of the 18th and early 19th centuries. The quality of the individuals is pretty standard. Some, such as the Prince of Wales, are recognised as pretty unattractive characters, as current suggestions that the monarchy should skip a generation show. (Though in the past adultery was not considered a disqualification for monarchy, rather the reverse.)

Others are boring or second rate: not people who would impress at a job interview. Two of them, the Princess of Wales and the Duchess of York, are in their different ways world-class entertainers. Measured by the column inches in world newspapers, the Princess is achieving more coverage than any other person on earth.

But - and this is the really important question - how can the fact that we have a Royal Family that entertains us have an influence on economic performance? Is there really a link?

I think there is. If the opinion formers in any country devote much of their time and attention to acquiring social status rather than money, they tend to divert their energy from economic endeavour. A bit of this can still be discerned, despite the decline in the reputation of the Royal Family.

Anyone who reports on business could identify industrialists who are more interested in getting knighthoods than earning money for their shareholders.

Less obvious, but far more important, is the way the relationship might work the other way round. It is not so much that an excess of adulation of the royals damages growth, but that our lack of adulation of these people demonstrates that we are much more interested in our wealth-generating ability.

So the lack of respect shown in opinion surveys is less a sign of their past failures than of our future success. Kicking the royals is a symptom of how we are moving back towards the robust debunking spirit that made this country the richest in the world.

And the entertainment factor? That is a bonus. There have been attempts to put a value on the royals in terms of the foreign earnings they bring into the country, but these are not very convincing. Do tourists really come here because of the Royal Family's antics? No, we should simply recognise them for what they are: an interesting, funny, sad, human story. And we should be grateful to these poeple for brightening up our lives, though perhaps not entirely in the way they intended.