This week the world welcomed the new Prince of Cambridge.  Named George Alexander Louis he is officially called Prince George of Cambridge.  He is third in line to be king of the British Monarchy.   He is son to the Duke and Duchess of Cambridge, William and Kate.   He will one day be king.   He is preceded in the line of succession by his father, Prince William, and his grandfather, Prince Charles.

Great Britain is a constitutional monarchy.   The role of the Monarch is largely symbolic.   The role is described as "focus of national unity", that is in other words a "tourist attraction".  The monarch and his/her immediate family undertake various official ceremonial, diplomatic, and representational duties.  Since the monarchy is constitutional, the monarch is limited to non-partisan functions such as bestowing honors and appointing the Prime Minister.  The Monarch is also the traditional Commander in chief of the British Armed Forces.  At the end of the day, though, the Monarch takes little direct part in government.  The decisions to exercise Sovereign powers are delegated from the monarch either by statute or by convention, to Ministers or officers of the Crown or other public bodies.

As Monarch the King of Queen is  Benefactor of "The Crown Estate".  The Crown Estate consists of a $13 billion real estate portfolio, $10 billion in urban property and $3 billion in rural property.   The Estate also includes golf clubs, parks, apartment buildings, retail space, mineral rights, and much more.  Technically the monarch owns maritime life reaching 12 nautical miles off the coast on England.  In 2012 profits from "The Crown Estate" were $450 million.  In 2012 Parliament passed the "Sovereign Grant" which entitles the sitting Monarch to the rough equivalent of 15% of revenues from "The Crown Estate".  The remainder of the money goes into the treasury   The Monarch receives services equivalent to the predetermined amount.   These are services like travel, security, and maintenance at the "occupied royal palaces."  All this typically amounts to between $40 - $60 million worth of public services.   The Monarch does not have to pay any rent, mortgage or property tax on the various castles. The taxpayers of Great Britain subsidize the Monarch and his/her extended family, and there area no taxes on these state provided benefits. 

Since 1992 Queen Elizabeth has agreed to pay personal and capital gains taxes on her other sources of income, just like any other taxpayer.  The Queen's private income, known as the "Privy Purse" is derived mainly from her ownership of the Duchy of Lancaster, a 46000 acre territory that has been passed down to the sitting Monarch since 1399.  She earns around $25 million per year from the Duchy of Lancaster.   She uses this  money to fund expenses incurred by the extended Royal Family.

In an agreement that dates back to King George III (American Colonial times) the Monarch turns over to Parliament the revenue  from the royal lands.   This comes to about $300 million a year.  In return Parliament supports the Royal Family at a cost of about $60 million a year.  This is a net profit for Parliament of $240 million a year.   Then there are the general benefits to U.K. tourism that derive from the Royal Family.   These profits come from airports, hotels, restaurants, shops, homes, and streets full of tourists.   Incidentally,  most of the tourists are Americans.   The economic boost from the birth of the new Prince is estimated to be close to $800 million. 

So, there you have it,  real life Kings and Queens, Princes and Princesses, Dukes and Duchesses,  occupied castles and much pomp  and circumstance.   This is not to mention all the money that is generated.  Just like a fairy tale, only it's real.   Is it any wonder that the Monarchy has survived.