The late Malcolm Forbes was fond of remarking that the capabilities that rocketed him to the top of the business tree were spelled

I-N-H-E-R-I-T-A-N-C-E.

Whilst it is true that certain of the characteristics for success are probably genetically ingrained in the Forbes clan, the personalities that distinguish three generations could not be more distinct. Founded in 1917 by then Hearst columnist B.C. Forbes, FORBES Magazine, known as The Capitalist Tool, is by its own definition, the business bi-weekly geared to "the man at the top."

The last word, written or otherwise, on dynastic enterprise, the Forbes family lost its most flamboyant member when Malcolm Forbes, one of America's most visible and adventurous billionaires, succumbed to what his namesake, son and heir somewhat tongue-in-cheekly feels could well have been his voracious appetite for extraordinarily varied, and thriliseeking activities. Nonetheless, the legacy of the man, from his mammoth birthday celebrations which are likely to secure their place in history as the most photographed and most illustriously attended, to his remarkable collections embracing the work of Faberge, Presidential papers, toy armies and boats, priceless works of fine art and, the ever-so-slightly incongruous Harley Davidsons, have already secured him a permanent berth in the pantheon of corporate American nobility.
Interviewed in the boardroom of the FORBES Magazine Galleries, the former site of Macmillan publishing house and the homeof FORBES since 1967, Malcolm Jnr visibly shares with his father only the trademark spectacles. Member of countless committees and recipient of as many accolades including the prestigious Crystal Owl prize which he won a record four times - awarded to the reporter making the most accurate economic forecasts for the coming year, Malcolm Forbes Jnr. is also an author, Chairman of the Board for International Broadcasting, President of the Brooks School Board, Director of the Princeton University Investment Company, and, Editor-in-Chief of FORBES Magazine amongst other formidable duties.
The scene of a rather costly rejection some forty odd years ago, the boardroom is now invitingly set for afternoon tea. This is where James Michener was given one dollar for cab fare and told to take his literary wares to Random House - it was thought by Macmillan then that he wasn't cut out to be a novelist. Today, Malcolm Forbes Jnr. more commonly known as Steve, presumably to differentiate himself from his father laughs at the irony of this myopia. Good humoured and modest despite the intellectual weight of his autobiographical notes, Steve Forbes wears the inevitable comparisons between Malcolm Snr. and himself well. Outspoken, mostly serious, perceptive and blessed with a unique insight into the workings of the world's most fascinating financial dealings, Steve Forbes is now top gun at the watchdog of American business. A job he clearly enjoys. Kostas Metaxas spoke in 1991 with the eldest of the Forbes offspring and discovers that a Malcolm Forbes by name, does not necessarily imply an eponymous nature.

VIVE.. Firstly, you come from a long line of people involved in the magazine business -and especially, the business of being in business. So, interestingly, you are in effect, documenting the history of American commerce at the same time as running a magazine...

FORBES: That's true. My grandfather started the magazine back in 1917. We thus consider ourselves to be the antidote to the Bolshevik Revolution. He was then an editor and columnist at the Hearst papers. My grandfather was the first one Hearst allowed to found a venture without Hearst Inc. owning it. Then in 1928, Hearst offered to buy FORBES Magazine for the then fabulous sum of one million dollars cash. My Grandfather turned him down,and four years later came the Depression - the magazine was broke in all but name. Fortunately, my grandfather earned enough from freelancing and his writings to keep the publication going ... Thank goodness he did, or I would now have to be earning an honest living!
I was six years old when he died, and all I really remember about him was that at the time he seemed to have extraordinarily long hair. I found that very curious, and a few years later my father told me the story behind it. Apparently, my grandfather believed that if you lived to your
biblically allotted three score and ten - then you had the right and were free to do what you wanted. My father obviously did not wait until his allotted lifespan - probably as a result of all his activities! My grandfather was quite a character - he maintained that old Scottish burr, being tight with money; he loved languages and he was self-taught having left school at the age of eleven or twelve. He learned shorthand in order to become a reporter. He believed strongly in the Victorian virtues of hard work and sound living...

VIVE.. Are these characteristics inherited down the family lineage?

FORBES: My father inherited some of both my grandfather's and my grandmother's characteristics. My grandmother was of Irish descent and she believed that life was for living and money was to be spent for fun and so I think that my father inherited my grandfather's editing capabilities as a business sense and my grandmother's love of life and living it to the hilt. My grandfather nearly had a fit once when he was going through all the bills and he said to my grandmother: 'Woman, why do you spend so?' She innocently replied: 'Because I like to!' To him that was an example of how nonsensical his wife was. Money was like the Victorian attitude to sex - you had to spend it but it wasn't something that you should enjoy doing!

VIVE.. You are the eldest of the Forbes clan, was it expected of you to carry on in the business? Is a Forbes genetically predisposed to work in publishing, or were you tempted by what one can only assume were many opportunities to branch out on your own?

FORBES: My father was far too smart to ram anything home about career, particularly when
we reached adolescence. He was acutely aware that to do so was to ensure that we would go another route entirely. Instead, I suppose that it was just being in the environment in which I was raised which influenced me. I had always been interested in working on the newsheets and magazines at school. When I left college and received a good job offer from FORBES, I immediately grabbed it.

VIVE. What was your father's attitude towards you as an employee?

FORBES: He was very sensible. He had worked for his, father so he knew some of the pratfalls, pitfalls and roadblocks of the situation. Initially, I did not work with him: I worked for Jim Michaels, the Editor whilst my father took a hands-off approach and it was understood that way. I was given breathing room. The magazine was much smaller when my father went to work. He actually had no intention of working with his father. Before the War when he graduated from college, he moved out to Ohio and bought a couple of small papers out there, with the intention of creating a chain of weekly newspapers. It was a real struggle and then the War happened and he sold the newspapers before entering the army. When he had completed his service, he was grateful to have the offer of a job on a salary of 100 dollars a week from his father.
He did very well, but because it was a much smaller operation, the interaction between the two was much closer than what we had. He had an instinct of when to step in and when you leave it alone.

VIVE. What do you think that you have picked up from your father and developed for yourself?

FORBES: My father was very dynamic, vibrant, outgoing and engaging - he had more personality than me! But I think that oneof the most important things that he taught my brothers and myself is not to try to be what you are not. Don't try to imitate, don't try to compete in this way or you will simply send yourself to an early grave. So where our styles and personalities are very different, I think that the spirit that animated him and animates my brothers and myself is similar. We all share a love for the business, we tend to enjoy it now because the trip is very short so rather than wait for tomorrow we want to do it today.

VIVE.. I know this is a frequentlyasked question and one that you probably hate to answer but is it difficult being compared with a personality such as your father was? Were you prepared to suddenly take the reins? He died so unexpectedly - one feels that there was an assumption that he would go on forever.

FORBES: So did we! Nonetheless, he felt that one sign of a successful executive was one who prepared his succession. He spent a lot of time in this preparation so that if and when it did unexpectedly occur, there would be a minimal amount of disruption and transition. He was very much aware of his own mortality - he had been severely wounded by machine gun fire in World War II so he wasn't going to take any chances. He was too smart to harbour the illusion that he would go on forever, although he would certainly try to do so. He wanted this to remain a family business. From the day I came to work here, he was working on ensuring that the business would stay in the family. He thought a lot about it, he set up a structure that would keep it in the family without disruption.

VIVE.. The whole structure of FORBES Magazine is such an appealing one to the outside observer - from the people who contribute such as Caspar Weinberger to the subject matter. What to you makes FORBES a successful business?

FORBES: A fair assumption would be that a successful business combines many elements that perhaps they don't teach in the managerial courses or at business school. Caspar Weinberger has contributed mightily to the success of this business in the last couple of years since he has been on board, particularly in the last year or so since my fathers death. It wasn't a case or 'Gee, wouldn't it be fun to have the former Defence Secretary on the payroll...' we are too Scottish to not be practical. We want to move ahead and I think in terms of the comparisons with my father, I am endured to that. To me, a successful business is the ultimate answer to that question. I enjoy the editorial writing and my responsibilities. So, if I am enjoying it, others can make any comparisons that they want. It won't slow me down.

VIVE.. FORBES Magazine seems to be almost a law unto itself. It has been in existence in this sphere for so long that the publication appears to know more about what is going on in corporate America almost before it happens.

FORBES: Forbes is not so much a law unto itself as this - we do things that help in ways that perhaps the competition may not have the imagination to do. In terms of the way we write the magazine. Too often, as is human nature, one starts to write for your peers or for your Editor. Our Editor pounds it into our writers that they are here to write for the reader, not for anyone else and that the reader does not have all the time in the world for 'your priceless prose'. The editing is fairly ruthless and no matter how prestigious you are, no matter how many years you have under your belt, if the story is too long, it is going to get chopped. The first and foremost obligation is to the reader and I think that that is what gives the magazine its spark - we write as if we are talking. We don't feel that we need to use 'State Department' prose, we are here to impart information which is achieved in a short, conversational way that gets the point across using lively language.

VIVE. Do you have troubles with libelling language?

FORBES: Well, libelling in the sense that we get our point across. Donald Trump still has not forgiven us for exposing the flaws in his financial situation . It is unravelling and he is still after us. Perhaps it is human nature - one looks for a scapegoat, tries to shoot the messenger. The banks didn't do it: he was obviously believing his own publicity and we were the first to point out that there was real trouble there. And so, he seems to think that his overborrowing, poorly-negotiated deals were our fault - for pointing them out rather than for him doing them.

VIVE.. Is that then a part of your job?

FORBES: Sure it is. We are a type of drama critic of corporate America: we don't write a story unless we have a conclusion. Each of our stories attempt to be, as our Editor puts it, a morality play. We want you to come away with a lesson, a conclusion. So, we assume that our readers have a knowledge of the daily news and then we take it a step further - we give you an analysis, a point of view, information that you don't get elsewhere. Just because something is in the news, we are not going to write about it unless we have something to add to it.

VIVE.. Clarifyng the facts and meticulous history checking must become all important in that case...

FORBES: We do that more thoroughly than just about any other magazine. We have the suitable resources and budgets to undertake this sort of research and while we occasionally make mistakes, we can always point to the source of that misinformation! I feel that because we make conclusions, the facts must be above reproach if not our conclusions will not be taken seriously.

VIVE.. Have the style and duties of the magazine changed dramatically since the days of your grandfather in this respect?

FORBES: The thread that has run since my grandfather's time is the emphasis on people who run companies. Our stories will be full of facts and figures but we always focus it on the person or persons who are in top management. My grandfather felt and we still believe this today, that a company, no matter how good its product, no matter how strong its balance sheet, if the head knocker is a knucklehead, the company is going to flounder. By contrast, if the company is in a rough industry but has good management then it will find a way to right itself. So, we don't believe in sweeping historic forces, we believe that whether it is the President of thecountry or the president of the company, that person plays a vital role in shaping entities and fortunes.

VIVE.. Let's return again to corporate America and how FORBES has been instrumental in documenting its fates and fortunes and financial cycles. If you were toanalyse the last decade and then compare it to the rest of the century, would it have been unique or just more of the same wearing a different suit?

FORBES: It was a remarkable decade because it was a black and white contrast to a decade of stagnation, insecurity and inflation in the Seventies. In the early Eighties, we did things right - we lowered tax rates, deregulated, stimulated the economy and gave people more scope to do things. So, the economy in terms of companies created, jobs created, new technologies - not only created but exploited, was one of the best decades in this countrys economic history. Everyone now focuses on its excesses, but you can look at any decade and find its underside as long as you have people, you are going to have less-than-saintly behaviour. But the decade as a whole was remarkable as was the way in which the U.S. economy transformed itself in manufacturing and elsewhere to become instead of the laggard of the world, the leader of the world. Everyone focuses on a chosen myopia - the business press and economists focussed on government deficits even though the overall deficits in this country in the Eighties were less than those of many other nations, including Germany in proportion to our size and on trade, neglecting the fact that we are importing more machinery, more machine tools and parts than we ever did before, it was for the right reasons not the wrong reasons. We were restructuring and we emerged the stronger for it and one of the sad things we see today, is the possibility that we may be backtracking to the policies of the Seventies: over-regulation, raising taxes... why the government would want to do this in a Recession is beyond comprehension.

VIVE.. What about the whole phenomenon of greenmailing junk bonds and the like - the tools for the new breed of corporate player?

FORBES: Well, what happened in that respect was that initially, junk bonds started out as a vehicle for companies that otherwise couldn't get capital . Take Fibreoptics which is the great new technology of the Nineties, it would not have been developed had it not been for junk bond financing making it possible. In terms of takeovers, for the first time in forty years, corporate management became accountable to their shareholders. When we went to college in the sixties, we were always taught that companies are self-perpetuating, you have a managerial class, shareholders don't matter... then suddenly in the Eighties, the shareholder came back with a vengeance. To concentrate only on the excesses is like saying, well, gee we better ban the motor car because some people are dangerous behind the wheel,' or 'let's ban stocks because you get speculation.'lf we made some changes in the tax codes, in terms of not rewarding debt over-equity, you would see a lot of those excesses all go by the wayside.
Greenmailing, what was that? That was entrenched corporate management oblivious to shareholders concerns, trying to pay someone off to get rid of them. That could easily been taken care of through having a shareholder vote if you were going to pay someone a certain premium above a certain price, there were ways of dealing with that. But I think it was not just greenmail that should have been criticised, it was corporate management for being willing to pay these people off. They didn't go to Congress and ask for the power to call a shareholder vote, they wanted to pay off with no attention paid to the dealings.
The problem apropos banks and the S&L's was not so much deregulation as much as the deregulation was very incomplete. If you want a level playing field, why did they raise the deposit insurance from $40,000 to $100,000? If you were going to go out on your own, you were going to have to raise capital just like everyone else without a government guarantee. Having put the government guarantee out there, they should have made sure that the premiums as you would in any free market, be based on the quality of your portfolio. Instead everyone got charged the same price whether you had good loans or garbage loans, you paid the same price for the insurance. Now what kind of incentive was that?
If they had deposit reform done in the early Eighties, where you couldn't get it unless you met certain conditions, or if you got it, that money that you raised through those insured deposits had to go for short term investments like you do in a money fund, if they had done that, then you wouldn't have had the S&L debacle. If they had worked to stabilise the dollar instead of knocking it down, then you would have had lower interest rates and you wouldn't have had the magnitude of the disaster there. Or, if you take airline deregulation - they deregulated one part of the airlines but they didn't deregulate the other part, which is the whole element of the FAA They're sitting now on'$8 or $10 billion in a trust fund, that was collected through airport taxes and was supposed to be spent on airport infrastructure and they never spent it! You could have 50% more airline planes, more capacity flying today with up-to-date computer controller systems - they have the technology now where you could vastly increase that capacity, there is no need for those huge airport delays at airports. And if they freed up the FAA, if they freed up the selling and buying of slots, the building of small airports, you would have had both sides of the equation, not just the flying side, but the airport service side freed up. Then, you would have had the real benefits of deregulation.

VIVE. So, your main criticism of the period is that so many of the strategies were incomplete...

FORBES: Deregulation did not fail completely more people are flying today than ever before, airfares are substantially lower than what they were ten years ago, it is just that now that it has become obvious that the implementations were not complete, don't try and turn back the clock which created inefficiencies and overpriced tickets, bring it to its more logical conclusion.

VIVE.. Looking into your own crystal ball, what then do you see as the outcome of this economic period throughout the world?

FORBES: The next few months are going to be really rough because every Central Bank has
been on a credit squeeze, including our own. Our regulators now in reaction to S&L's have frightened banks so that they don't make any loans in a big knee jerk reaction. They are overcompensating for what they should have been doing four or five years ago. But I think if you look beyond next year which is going to be turbulent, just as this year was, the prognosis should be good, barring doing dumb things like in this country, not passing any capital gains tax reduction which is ludicrous. Virtually every other country is much lower and if you want competition, you want to create an environment where people can start businesses to challenge the existing order. That means a lower tax on capital, not a greater one because that is how you create the new enterprises. That is the lesson of the Eighties. You want to increase government revenue so make it more worthwhile for people to do more business so you can take a bigger slice of money. Between 1982-86 in this country, capital gains tax revenues went from $13 billion to $49 billion. Then they raised it substantially and then went down. Last Fall, when Congress almost passed a cut, a minority in the Senate blocked it and small stocks were first hit and this Summer, even before Iraq, the Blue Chips started to wobble.

VIVE.. If you were a businessman looking to find a potential economic and commercial Utopia,where would you head on the benefit of your knowledge and powers of observation?

FORBES: It would naturally depend on what kind of business and what kind of businessman, but generally speaking, if you were the kind who likes to operate out of a suitcase then you would find opportunities in Eastern Europe. I think the most promising for the Nineties is the U.S.. Germany still has a lot of restrictions in setting up business, they regulate everything over there. Then I think as the decade wears on, the surprise is going to be Latin America. Mexico is starting, to get its act together; Brazil is floundering right now but the message on the winds is good.
In terms of Latin America, one of the things that you see happening which economists overlook is that economics is people and one of the signs which I think is the harbinger of a good future is the extraordinary rise of evangelical Protestantism in Brazil and elsewhere. It is people saying that the old system is not good - I want my pride, I want the feeling that I have control over my life. So you look at the changes that Celinas is doing in Mexico, look at the social changes that are starting to take place in countries like Peru, and Brazil where you can eventually change some of the crazy policies that are now in place in Brazil. Looking ten or twelve years down the track, you can see Latin America really begin to boom the way that the Pacific Rim did in the late Seventies and Eighties.

VIVE.. What then are your predictions for the South-East Asian region in the coming year?

FORBES: Well, I think it is going to depend on how quickly those countries restructure themselves. They started a little bit of it in the Eighties - then New Zealand threw its Prime Minister out, Hawke has made some progress in Australia but there is still a ways to go. In terms of removing trade barriers - it was only in the Eighties that Australia opened up its financial system a little bit but you still have very protectionist trade policy. Your tax rates are ludicrous, so if you want to participate in the global economy, a global boom, you can't pretend that you are an isolated fortress in the Pacific. The more those countries open up, the more a lot of existing interests will have to become competitive again.

But there is no reason why you can't fully participate - Australia's future is not so much minerals and resources like everybody says that can be a part of it - but you can certainly develop the human capital to do far more than just dig into the ground. It is there and 1 think the fact that when you bring in outsiders be they Chinese or Hungarians after the '56 revolution, they really move it in your country. So. I think that with some structural changes, some systemic changes those countries should do very well. But unfortunately, they still have the baggage of Fabian Socialism of Britain and the idea that a countryof 17 million as in Australia's case can sustain the same weight of regulations that Pre-Thatcher Britain used to have. You can't afford that any more.

If Australia opened up, I think that the economy would develop a depth so that as in the US, a Trump can come along and rise and fall but life goes on. Through leverage and aggressiveness, the Australian tycoons who have fallen got way ahead of themselves but they had an outsized influence whereas if you had a stronger economy, they wouldn't have risen quite so far. I think that it is a sign that there were rigidities there and it is too bad you had to depend on them to shake it up a little bit. If you made some changes on the tax regulatory side, you would get a much broader base of businesses, entrepreneurs and services than you did through a handful who were like comets spectacular but where are they now?

VIVE. The issue of 'how the mighty have fallen' can be well applied to someone like Michael Milken who went from corporate hero to white collar criminal in the public estimation...

FORBES: Milken was never so much a corporate hero in the sense that an Iacocca was, as he was a figure of enormous power who could very easily disrupt a boardroom meeting of the best directors in the country with one phone call. He wasn't someone that kids emulated, who they wrote to for autographs, he in fact shunned the limelight and made it difficult to be approached. He thus appeared to be more sinister. Right now Iacocca has a real challenge in reviving Chrysier again in this current slump but I think that even depsite Chrysler's troubles, Iacocca's reputation is higher than Milken's ever was.
Trump, I think appealed to people's Waiter Mitty side: he was brash, he was young, he was the baby boomer's age, did grand things, challenged the city... people applauded him. The problem was that he started to believe his own palaver that he could turn lead into gold so he started overpaying: the Plaza, the airline he'd be lucky to get fifty cents in the dollar on that and most of all he went on an expansion binge and ruined himself - all on leverage and borrowings, and business just wasn't there. He was like the emperor without any clothes parading around as if he still had all his robes on. The banks have put him on artificial respiration because they are scared if they pull the plug it will end up costing them more than if they pretend he still has a viable business.

VIVE.. Can a definitive profile of the corporate American be painted?

FORBES: I don't think so. In this country you can't come up with a typical CEO. You find multitudinous styles from the touchy-feely to the corporate terror - it ranges over the lot. On the whole though, you find Americans a lot more adaptable and willing to try something new that might work.

VIVE.. How do you perceive the notion that America searches for its royalty in two spheres: Hollywood and Commerce?

FORBES: Royalty in America, if you want to call it that, is like an ongoing French Revolution. We don't decapitate people literally, but in terms of a rise and fall of businesses and fortunes, because you are on the throne one day, doesn't mean that you are not going to be running from the mob the next. It is perpetual, there is very little longterm stability anywhere and that makes this country in one sense a little uneasy for someone who comes from a society like Britain where even the eccentric has his pigeon hole and everyone has their place. In this country there are no places. It is wide open. If you are not open, then you are not going to make it. But there is a downside. This country's peculiarity is what they call - the loneliness of the crowd, you do have the anxiety that yes, you can go up, but there is no reason why you can't go down just as rapidly. America is quick to reward but just as quick to punish.

VIVE.. Have you ever wanted to expand FORBES Magazine globally?

FORBES: It is really an American magazine although we have a German edition that is doing
very well and we have a Chinese edition coming out soon - that will include Hong Kong, Taiwan, Korea ... We are growing in this country and one of the advantages of being privately owned is that we don't have to be big for the sake of being big. That gets you in big trouble.

VIVE. In what direction will you take the company?

FORBES: That is very difficult to say. My father and I worked closely together so there is no hidden agenda. I think that continuing to make the magazine more useful - indispensable to our business audience is first and foremost. If there are other opportunities then we will take them but my father liked to say that the biggest lies are Five Year Plans.