We celebrate the Royal family because it symbolises our liberty Ask a friend overseas what he or she associates with Britain and the chances are that the monarchy will come up within seconds. The Crown defines our brand, in the sense that it is thought to say something about the rest of us. Foreign coverage over the past week has been less about the baby than about the way the British are perceived: as traditional, formal, hierarchical, tied to ancient institutions. There's an element of truth in that caricature. The monarchy is indeed hugely popular: opinion polls show support for a republic to be low and unfluctuating, at around 18 per cent. Although our political arguments are as vigorous as any country's, we are at least agreed on the legitimacy of the regime: we conduct our arguments, in other words, within rules that almost everyone accepts. When you think of how many different varieties of European government have risen and fallen during the reign of the present Queen alone, this is no small thing, Only recently, though, has the monarchy become a unifying national institution. The peoples of Britain spent most of their history being ruled, in effect, by foreigners. For three-and-a-half centuries after the calamity of 1066, French was the language of the English court, and the early kings spent most of their reigns across the Channel. Under the Stuarts and the early Hanoverians, anti-monarchists tended to make their case using nationalist rhetoric. A dying echo of such sentiments can be heard in the republicanism of the BNP. The domestication of the British monarchy can be seen in the story of Prince George's earliest namesakes. The first two Georges, who never mastered our language, were seen as alien and contingent. "George my lawful king shall be / Except the Times shou'd alter," says the Vicar of Bray, prepared, as always, to abandon the dynasty at the drop of a hat. Not until the final defeat of Jacobitism in 1745 was there broad agreement on who should fill the throne. Our national anthem, which we now think of as a symbol of familiarity and continuity, has, in its full version, a panicky line dating from that year: "Lord, grant that Marshal Wade / May, by thy mighty aid, / Victory bring..." It was during the long reign of George III that the British developed something like their present attitude to the monarchy: familiar, proprietorial, half-humorous. As the historian Linda Colley showed in her great book, Britons, the gentle teasing of monarchs, far from being subversive, tended to enhance the sense that they belonged to the nation. This aspect of British royalism is almost impossible to explain to foreigners - except those from the Dominions who, of course, are not properly foreign. Royal occasions have a play-acting, imaginative quality that my Brussels newsagent and my American interviewer simply couldn't see. We Britons know that there is something faintly ridiculous about plucking a baby by genetic lottery and making him the exemplar and repository of our national story. Yet that doesn't make our support for the institution any the less sincere. The philosopher Roger Scruton put it well when he likened the magic of monarchy to the enchanting light at the top of a Christmas tree, which we perfectly well remember, having climbed up to place it there ourselves. This enchantment depends on the sovereigns being - or at least appearing to be - unflashy and unintellectual. When George V, great-great-great-grandfather of the new Prince George, toured an exhibition of French Impressionists, he boomed at his queen, "Look at this, May, this'll make you laugh!" The idea that we like our monarchs to be blunt and simple is again, in my experience, difficult to get across to people outside the Old Commonwealth. Hardest of all, though, is to challenge the idea that Britain is a hidebound, heritage-obsessed nation - an idea that many Britons themselves now fall for. For most of our history, we saw ourselves in precisely converse terms, as a restless, adventurous, innovative race. It is hard to think of a country that has invented and exported so many things: parliamentary democracy, the Boy Scouts, the stock exchange, the spinning jenny, golf, habeas corpus, horse racing, the internet. A single Cambridge college has produced more Nobel Prize-winners than France. If our institutions seem old, it's because they work. The United Kingdom was the only European country to have fought in the Second World War and not, at one time or another, lost. In consequence, we did not have to start afresh in 1945. Our political system had not failed us. What we sometimes think of as our character is bound up intimately with our political system. A national culture is not something that hangs numinously alongside institutions; rather, it is a product of those institutions. Ours was the country that came up with the idea that rulers were subject to the law rather than the other way around, and that we should be governed through MPs whom we could hire and fire. Royal rituals that strike so many as medieval flummery - the State Opening of Parliament, for example - are there to exalt that idea. British identity subsists in the countless bodies that are too old to be claimed as property by our political leaders: counties, Army regiments, ancient universities, churchwardens, jury trials. These institutions remind us that our government has been kept in check. A monarchy that we simultaneously chuckle at and respect underlines that relationship. In the European Parliament, I am often struck by how many of my colleagues grew up under dictatorships. Not just those from the former Comecon states, but the Spanish, the Portuguese, the Greeks and a few of the older Germans and French. Liberty under the rule of law is not the natural state of an advanced society, nor even of an advanced Western society. It is a very specific product of English-speaking civilisation. As late as 1943, democratic freedom was more or less confined to the Anglosphere. And that, deep down, is what we're cheering when we cheer the birth of a new royal baby. Over many centuries, as we have watched our neighbours traumatised by dictators and revolutions, we have been able to feel as you might feel when, warm in your house, you hear the storm shake your windows. We developed and exported the sublime idea that taxes ought not to be raised, nor laws passed, save by our own representatives. That idea was not dreamt up, as in most European constitutions, by a recent convention of bigwigs: it is a birthright inherent in each of us, which the new prince happens to symbolise. That, surely, is something worth cheering. Daniel Hannan is a Conservative MEP. His next book, 'How We Invented Freedom," will be published in November by Head of Zeus