“All those that have been pessimistic for very long about this country — its future and its growth — are wrong, and have been wrong throughout American history.”
Malcome Forbes: The Penthouse Interview
Who is Malcome Forbes? What’s it like to be worth between $200 and $600 million; to have complete control of one of the largest and most successful business publications in North America; to own a yacht that exceeds 120 feet in length; to convert a Boeing 727 for your own personal, corporate use; to own enormous — and enormously profitable — tracts of land in Colorado; to have nearly a dozen places you can call home, including your own South Seas island, an architecturally famous seventeenth-century mansion in London, a palace in Tangier, a ranch in Colorado, a townhouse in New York, and a handsome neo-classic building (complete with columns) for an office building in Manhattan’s Greenwich Village; to own a pride of motorcycles and numerous cars, including a Lamborghini (chauffeur-driven and with a reading lamp in the back); to have the world’s most substantial holding of Faberge eggs (made originally for the Russian czars), more than 30,000 toy soldiers, and art collections that could grace any great museum; and, finally, to have as your yacht guests the most powerful publishing, business and government nabobs? What’s that like?
Well, for the man having all this fun, Malcolm Stevenson Forbes, it is all very nice indeed. He is also the chairman and editor-in-chief of Forbes, the sharp-tongued, irreverent business magazine, published twice a month, that has corporate America as its beat and as its audience. Into its coffers last year flowed some $60 million in advertising revenues from those who thought it the ideal medium for their message. Such nice waves of money, however, don’t deter Forbes from critical reporting of business chicanery or stupidity; and if occasionally Forbes reporting is off-base, owner Malcolm himself would be the first to admit that no one — and no magazine — is perfect.
His very personal influence is felt throughout the publication, starting with the up-front “Fact and Comment” pages, which he writes himself. In a recent issue, these included a plug for Alan Greenspan as Forbes’s favorite for chairman of the Federal Reserve Board, a stop-picking-on-Middle-East-negotiator George Shultz paragraph, a mild reproval of giant corporations (who were unnamed) whose managements saw fit to dispose of toxic wastes in ways that were less than legal. Forbes followed this with an ambiguous essayette on the usefulness of Defense Secretary Weinberger (he slams him unequivocally in this interview) and a Bronx cheer for a bit of apparently misleading financial reporting by the New York Times. Forbes then offers his personal movie reviews (hated Britannia Hospital, loved Local Hero) and book reviews (loved Anatomy of an Illness, by Norman Cousins; hated Consenting Adults, or The Dutchess Will Be Furious, by Peter De Vries).
Where did this moneyed man come from? (The smart money, by the way, says Forbes is worth closer to $200 million than $600 million; the spread comes from the unknown worth of Forbes magazine — no one knows how much it could be sold for.) But don’t worry about Malcolm Stevenson Forbes just yet: he still managed to make the list, published by his own magazine, of the 400 richest men in America. He ranks number 399.
It’s best to start with Forbes’s father, Bertie Charles Forbes, who emigrated here from Scotland, took employment as a printer’s devil, and worked his way up to financial columnist on Hearst’s New York American, which he left in 1919 (when Malcolm was two years old) to start Forbes, a business weekly. The third of five sons, Malcolm was born in New York, grew up in New Jersey, and went to Princeton, where he received a B.A. in political science in 1941 (as well as a letter in boxing). He was the owner and publisher of a weekly in Ohio for a short time, and was then inducted into the army in 1942. A staff sergeant in a heavy-machine-gun unit, he saw action in Europe and earned a Purple Heart and Bronze Star before being discharged in 1945, after being hospitalized with a severe thigh wound received in combat. He went to work for his father, and not surprisingly rose through the ranks and was elected editor and publisher when his father died in 1954. At the time, Forbes was a staid publication, with advertising revenues of well under $2 million. But Malcolm’s involvement and his irrepressible quest for publicity brought him and his magazine enormous attention and visibility. It wasn’t long before anyone who was anybody on Wall Street was reading it, and fortune soon followed fame.
Then there are Forbes’s collateral activities to take into account, and they are so varied and numerous as to make any compiler’s heart sink. A brief attempt: He has become an avid balloonist and motorcyclist (activities begun relatively late in life); is an art and artifact collector; has wined and dined so many foreign dignitaries, politicians, and business leaders that keeping count would tip a calculator into terminal error; has invested, with envious success, in real estate and other diversified activities; has motorcycled through the Soviet Union; has been a New Jersey state senator; ran for governor of New Jersey in 1958 and lost resoundingly (“A good thing, too, though I didn’t think so at the time,” he told Penthouse. “I easily could have become part of the Nixon administration and I might have wound up in jail with the rest of them — though I don’t know if I should be saying that, since I still see quite a bit of him”); and all the while has been a most indefatigable promoter (some say hustler) of his magazine, seeing nothing wrong with always folding his pleasure into his business. During it all he raised five children (the eldest, Malcolm Stevenson, Jr., has been designated heir to the magazine) with his wife, the former Roberta Remsen Laidlaw, who is as retiring and private as her husband is voluble and publicity-loving. Forbes has, of course, been named to any number of boards and received a short ton of awards and honorary degrees. Now in his early sixties, Forbes is adamant about not taking his own advice to others to retire at age sixty-five. He’s just having too much fun.
Penthouse asked Joe Spieler, a New York writer, editor, and literary agent, to interview this untamable capitalist, and he offered these observations:
“Forbes is a manly sort, nearly six feet tall, with a nice touch of grizzle, good lines in his face, a shock of white hair unslicked, a bit of a limp (from his war wound), a ready smile. He’s a man who’ll easily talk your head off (and who perhaps sometimes talks off the top of his head). At his office, on a plane, or on his yacht, with the ultrapowerful or the not-so-powerful, Forbes is almost always at ease, though I sensed in the four days I spent interviewing him another, very private part that he was determined to keep that way. He’s never far away from his work, always clipping articles and tidbits from the newspapers he devours daily. Tell him about a new tape recorder you’ve found that is good for interviewing in high-noise situations, and he’ll ask you for brand and model number, to be reported to a Forbes staffer for further evaluation. Give him a book about the economy, and he’ll try to read it that night, or give it to one of his sons to read and report on. He’s manifestly a man of opinions, but he’ll hold contrary opinion$’ on the same subject without particularly feeling the need to reconcile them, as I think you’ll see in the exchanges that follow. Generous with his time, I found myself invited, while in Washington for one of the interview sessions, to his yacht for what I thought would be an informal Sunday night dinner for some people he knew. We had just finished an interview session that afternoon. He handed me a mimeo-graphed sheet of the guests who would be there that evening. There was my name: Joe Spieler, Penthouse magazine. But what was really interesting were the names above and below mine: William French Smith, attorney general of the United States; and David Stockman, director of the budget. Can’t say that I was all that unhappy with the company.”
“I thought I’d start the interview by asking him about one of his nicknames: The Happy Capitalist.”
Are you the happiest capitalist you know?
Forbes: Put it this way: I’m a very happy capitalist. a happy millionaire, as I’ve been dubbed in print. It’s absolutely true.
Why are you such an optimist, especially about the American economy?
Forbes: All those that have been pessimistic for very long about this country — its future and its growth — are wrong, and have been wrong throughout American history. There has been only one period where lengthy pessimism was justified, and that was the Great Depression.
If you’ve lost your job, of course you’re a pessimist. But if you’re adept and ambitious, there are more opportunities on the horizon than ever before.
But many economists — even some in the government — predict a future where unemployment will continue to be very high, between 8 and 11 percent, because the economy can no longer employ all those who want to work. It’s called “structural unemployment.”
Forbes: I think that’s utter crap. I think that in a few years finding enough people to do all the different jobs will be a bigger problem than unemployment is today. What do you do with your leisure time when you can earn enough in four days instead of five or six? You find activities that create whole new businesses. We’ve gone through the hi-fi boom, we’ve gone through vans — all sorts of things. Leisure time is a chief reason why two thirds of the jobs in this country are in service industries. So, I feel that high productivity from fewer people in the manufacturing sector does not mean structural unemployment; it means a reshifting of employment. Shortages of skilled and unskilled labor are going to be the problem in five or ten years, not unemployment.
In a recent article in the New York Times Professor Wassily W. Leontief of New York University, who won the Nobel Prize for economics, compared the coming obsolescence of many workers to the fate of horses after the Industrial Revolution in the nineteenth century. He says that we must share with others what work is available. We did not have to maintain the horses, he says, but we must maintain the people.
Forbes: A highly amusing idea. It’s a joke. It’s hard to think that somebody with the title “professor” could seriously say such nonsense. Does he really think a robot could have written Shakespeare? Does he really think that the creative arts can be done by computers? Who the hell creates the robots?
But don’t most new jobs require workers who are smarter and better educated and trained than those of the last generation? Being trained to program computers is far different from learning how to work a lathe.
Forbes: I disagree. I don’t think a fraction of the kids who put all their quarters into video games have to understand how the damned thing is made. They’re still able to beat the game. They find their intelligence challenged, not refuted. They can challenge video games, and soon they’ll be able to program them. You see, they understand the age they live in. I think they’re like the Model T car tinkerers who made this a nation of mechanics — those who created the automobile age and all that went with it. These kids playing video games are going to create a new future.
The computer is intelligence applied by human intelligence, and to say that one is going to do away with the other is just absurd, a contradiction. I don’t see how that guy can call himself a professor.
He’s a Nobel laureate.
Forbes: Listen, for years Nobel prizes have gone for peace. Do we have peace?
What about someone who has not only lost his job but also found that his skill is obsolete? Take people in the steel industry —
Forbes: Steel is not a skill. There are those who worked on a production line, who knew how to bend fenders, a job now done by robots. In that sense, if you knew how to turn a fender on a machine and were adept, you could adapt. A skill requires not only familiarity but a certain mental capability, and if you could adapt to an old skill, you could adapt to a new one. Knowledge is never out of style. A person with a skill can rapidly learn to reapply it elsewhere. What’s really tough is the guy who swept the factory floor and now finds there’s no floor to sweep.
It must be awfully tough to work for one company for twenty or thirty years and then find yourself out on the street.
Forbes: Tough breaks are not the exception in life. The exception is somebody like myself, who has a stream of luck. Anybody can take success; it’s how you respond to failure that determines how successful you’ll be.
All right, what do you think the demand will be for people without skills?
Forbes: Who the hell cleans up? In a fast food place, for instance, who the hell takes the job of turning the lights on and off? Granted, you can put the lights on a computer, but somebody has to be there. Look at the growth of jobs for people in the business of security. And it isn’t all aimed at burglary and vandalism — there’s also protection of individuals and things like guarding trade secrets.
You’ll never do away with people needed to oversee physically laborious jobs. We talk about unemployment, but just take the backbreaking jobs — like harvesting — that most of the unemployed in our cities wouldn’t take. It’s all well and good to say that Mexicans sneak into our country, but most of them get jobs doing what? Picking vegetables, hard physical work. They come across the border because there are jobs for them. Who the hell takes the job washing dishes in hotels? Service jobs are at the bottom of the ladder. Now that doesn’t offer high hope, but all I’m saying is you can’t get enough people to do those jobs now and there’s going to be fewer people to do them in the future. In the future, wages are going to have to be higher at the bottom of the scale than in the middle because there are going to be fewer people willing to do that work.
Of course, it’s not an answer to say, “Well, they’re looking for lettuce pickers in California. Why don’t you go there?” That’s a stupid answer. What I’m saying is that things are looking up throughout the job spectrum. Keep in mind that the unemployed in our major cities aren’t representative of the health of our economy as a whole. The number of new businesses in this country is growing tremendously. The spirit of wanting to do your own thing pervades this country. Sure, failures are also up, but one out of four new businesses succeeds in the first couple of years. So, yes, the more new businesses that start, the more the failures, but the proportion hasn’t changed. You can’t reorient the whole country based on either extreme, the rich or those at the bottom. There has got to be a balance.
You cannot afford to insure and guarantee everybody against every adversity and still have a country that functions. Communism is supposed to do that, and Russia is behind the eight ball as far as their standard of living goes. They’ve put all their wealth into being a major military power, and people are frustrated and sullen. It doesn’t mean they’re going to have a revolution. It simply means (as the standard example goes) that more than half of the vegetables eaten in Moscow are grown on private little plots, using the one percent of the land, that members of communes are allowed to cultivate for their own profit. It’s nothing more than free enterprise.
Creeping capitalism is destroying the attempts of a society organized so that everybody has everything and nobody has anything in the way of freedom. There’s no room there for incentive and ambition. So we mustn’t destroy that in an attempt to right the wrongs and difficulties of a relatively small percentage of Americans.
Are you saying that the Communist system will undergo some sort of attrition?
Forbes: They’re undergoing it now. Do you know any nation that’s a convert to Communism that isn’t literally under rifle threat? Do you think East Germany wouldn’t join West Germany and freedom tomorrow if it weren’t for Russia’s military power? You find in Russia — and in China to an even greater degree — that Communism is eroding. Creeping capitalism is growing because of their need to recognize human motivation, and that requires incentive and reward. There is no such thing as “each according to his needs” [a Marxist social and economic principle). Everybody’s needs and desires are the same. But not everybody can succeed in their desires. Some people just idly wish for things. Other people will work like hell for the one thing they want most. Nobody gets everything, but a few of us do pretty well.
You spoke of being lucky in your life. Say more.
Forbes: Anybody who calls himself a self-made man is laboring under a delusion that it’s somehow amazing that they were successful. You’ve got to be out scratching to attract luck. The best path to success is to be born to parents who own a business or have money. That solves a lot of problems right off the bat. You’re assured of an education and you’re assured of opportunity.
Well, I was lucky in that respect. My father was a Scotsman and practiced frugality and taught us, through hard-earned allowances and whatnot, to be frugal. We weren’t spoiled, but we had the advantages of a man who was making money in an established business, which I was then able to succeed in when he died. As I’m fond of saying, my rise to the top was through sheer ability and inheritance. ’It’s an easy way to go, but that’s luck, and it’s too late to do anything about it.
From your position of wealth and privilege, have you ever wondered what it might be like to be poor?
Forbes: Yes. It’s not hard to be poor, it just takes having no money. I don’t think it takes great imagination to imagine that. Anybody who has been as fortunate as I have and who doesn’t realize the other side of the coin, or think about it, doesn’t have much money. But in this country we’re not talking about the kind of poverty you see in South America, where there are no jobs and no standard of living, where people scrape the soil to grow a little corn and then somebody takes it from them. We are talking about inner-city unemployment. But poverty is not hard to imagine and understand. Having no money is not hard to understand; it could literally mean starvation. I think there may be some cases of it in this country, but the existence of unemployment insurance, Social Security, and other social services means that real starvation is not a fact of life here. And I don’t think that’s looking out of pink glasses.
Now mental poverty, and the depression that comes from not having a job, that’s a whole different thing. It’s a tough thing, and I’m not unsympathetic. There are lots of people who want one and those people don’t stay down forever. They shift. They move to where the jobs are.
Do you think President Reagan and his administration are sensitive and sympathetic to the poor?
Forbes: I think the president has received some well-intended but very obtuse advice. I mean, he’s talked about people not falling through the poverty net, but he’s been so misinterpreted. He is a warm and decent human being and probably has as big a heart as in his movie roles. But what he’s trying to do is so basic: he’s simply saying that we must reverse our social deficit spending — for instance, the growth of food stamps and other programs that are now costing billions of dollars and growing geometrically every year. The programs have gotten out of hand. All he’s trying to do is limit their growth. Otherwise we’ll come to the point where most of what you earn will go for taxes — a redistribution of the wealth. There’s nothing wrong with capping great wealth if it doesn’t stifle ambition, and there’s nothing wrong with redistributing some of it and taking care of needy people.
It’s easier to dramatize cases where Reagan’s program has worked a hardship — and these cases make for exciting news — than it is to dramatize some guy who is happily doing his job and getting to keep a little more of what he’s earning. You’ve got to keep in mind the carrot as well as the carrot-eater.
What about President Reagan’s enormous defense-spending programs?
Forbes: I think [Secretary of Defense) Weinberger is the biggest bust we’ve had in the Defense Department since his predecessor, Harold Brown. I don’t think Cap Weinberger has performed well for the president. I think he’s a perfectly nice guy, but he is not a national asset. In my mind he’s performing no service for the president, because he doesn’t make any hard choices and say to the president, “I think we don’t really need an MX missile” — which program, in my opinion, is an exercise in strategic futility. I think we’ll have better defense with infinitely less spending and by making hard choices among different strategic weapons systems instead of trying to buy them all.
Do you think we can make do with, say, 80 or 90 percent of our current defense budget?
Forbes: I think cutting back across the board is the wrong approach. For instance, cutting back on the amount of exercises, the number of training missions. Hell, the only reason that our planes, in Israeli hands, wiped out the Russian-supplied Syrian Air Force during the war in Lebanon was because the Israelis knew how to use the weapon. They had hours of training, flying, and combat experience. Our pilots probably aren’t half as good as theirs, simply because they haven’t had as good training and flying experience.
So you don’t cut back across the board. What you cut out is a whole proposed system. For instance, this business of building two new aircraft carriers and their support ships is crap. We already have thirteen. That’s enough to project our power where it can stand. If it’s war against Russia, for God’s sake, those forces would be sitting ducks.
I don’t think all that proposed defense spending is necessary. The president needs tougher and sounder analysis of Russia’s capability than he’s getting sieved through to him by either Cap Weinberger or [National Security Adviser William] Clark.
Are you afraid of the Russians?
Forbes: I’m not a bit afraid of them.
Do you think they want to come here?
Forbes: No, but I think they certainly would like to spread their power — to be able to dominate Western Europe and the rest of the hemisphere.
I think that to minimize the Russian threat would be as foolish as to overinflate it. Remember that the Russians were ripped apart in two world wars. They are surrounded, mostly by hostile neighbors. How would you like to be a Russian soldier marching toward a Western front with Czechs and Poles on either side of you and the East Germans behind you? My God, you’d be shot from behind or from the side long before you’d be shot by NATO soldiers. The Russians have a deep fear, and the only thing that makes them a superpower is their enormous nuclear military capability — that and their missile capability. They’re not a superpower because of what they produce or because of their standard of living, not from all the things that have given the United States power. I’m saying is, we sometimes get over-wrought by it, and thus we can overspend militarily and by defense overkill hurt ourselves and our economy from within.
You’ve been to Russia and China. What did you find?
Forbes: I motorcycled from one end of Russia to the other, and I motorcycled in China. I certainly had a good reception in both countries. You know, people-to-people isn’t the problem. People say things would be different if they could just know each other. Witness the Russian athletes in Kansas the other day getting such a warm reception. It’s statesmen tending to national interests and defending their country that’s the problem. The people aren’t responsible for developing defense systems, but without those systems a people cannot be free. Turning the other cheek may be a Christian ideal, but look what happened to the Jews for many hundreds of years. Now look where Israel stands. Why? Because they don’t turn the other cheek anymore. They punch the other cheek — they have the military capability. Do you think they’d be free today and have a country if they weren’t militarily capable and aware of their danger?
Let’s get back to one of your favorite topics. Do you think capitalism is an eternal system, or will it transmute into something else, into a synthesis of today’s various political and economic systems?
Forbes: Capitalism doesn’t lend itself to rigorous definition. Human nature is eternal, and that makes capitalism eternal. Capitalism deals with the essence of human nature: the ambition either to do better or to do one’s own thing — and that’s not going to change. So capitalism is a very fluid system. It needs regulation, certain stringent government controls to prevent abuses, to prevent fraud either against the consumer or in the marketplace.
Do you think socialism can ever coexist happily with capitalism in one state?
Forbes: Sure. There is no purity in any system. We have socialism in this country — the mail system and a lot of operations that are essentially government-owned. What’s the Ure department? It’s socialism. What’s the police department? It’s a form of socialism. But if government has to confiscate businesses to support giveaways, it cuts its own throat. It reduces income. Look at the Scandinavian countries, which were the example par excellence of freedom, democracy, and socialism, i.e., the guarantee of cradle-to-grave security. Much of their economy is now underground as people swap services because they don’t like to pay 60, 70, 80, 90 percent of their income in taxes to the government to support all the free services. People are contradictory. We’re all contradictory. We don’t vote against any of the guarantees that either come from the heart or answer a real need, but we also resent the government taking our income. In a socialist system you can’t have competition. The state owns the existing chemical business or the drug business. They control the research. So there’s no reason not to do things the same old way, no spur or need to be competitive.
What’s the most capitalistic experience you’ve ever had?
Forbes: Having a Forbes magazine jet, which we painted gold and money-green in large letters. We painted the name “Capitalist Tool” — which is the slogan of Forbes magazine — on the plane’s nose. Once we had Nicholae Ceausescu, the president and Communist party chief of Rumania, on our yacht and he said you must visit us in Rumania. I showed him a picture of our airplane and he saw “Capitalist Tool” printed on it, and I said, “Wouldn’t that present problems when we landed in Communist Rumania?” He laughed and said, “Well, we’ll probably have to double the airport guard, but I’m not sure if it’s to keep people off the plane or because they want to get on it.”
Do you agree that avoiding nuclear war is now mankind’s most important task?
Forbes: Of course, and I also think it’s only because of the existence of nuclear weapons that there’s been no atomic war on a worldwide scale yet. The capability of each side to destroy the globe has, relatively speaking, ended direct confrontation of the superpowers.
Do you think nuclear war is survivable?
Forbes: I suppose it will be for some.
Would you want to survive?
Forbes: No, and I don’t think it’s a question most of us would have to face if there were nuclear war. I think there will be survivors, but it’s going to be a different jungle, like the whole thing beginning all over again. I wouldn’t want to come out of a bomb shelter and look around and see here and there a few people and everybody dying of radiation. It’s unthinkable and survivability is irrelevant, because I doubt there’s anything you’re going to want to survive for, with, or about.
President Reagan has been talking lately about sophisticated space defense systems. Do you agree with him that we can have a perfect defense against Russian missiles?
Forbes: I would say this: the only perfect defense is always to have military capability in any area in which we can retaliate — it’s the only insurance of peace. I don’t think there’s ever going to be a perfect defense. There’s no such thing as ultimate safety, except being up to or ahead of the state of the art.
Well, what about President Reagan’s plans to develop space lasers and other exotic space hardware?
Forbes: Lasers, yes. We have no choice, because the Russians are looking into that, too. We damn well better go all out to be the first, and not to have a big time lag when they are one up on us in some of those things. That is a matter of necessity, and fortunately the president has given it a full head of steam.
Do you think that nonmilitary spending on space projects should be increased?
Forbes: Yes, I think it probably has been cut back too much. They’ve had to postpone some of the space exploration shots and so on — because of military spending. We must have the military capability, and that’s taking a disproportionate amount right now. I hope that we spend more on the peaceful exploration and uses of space as soon as we can order our priorities.
How do you feel about government support for the space industry?
Forbes: It’s an absolute must from the point of view of survival. If there were to be another world war, space and the control of it and the ability to operate in it would be essential in terms of our survival against the Russians. That survival could depend on our knowledge and capability in space. The free world depends on our capacity in space. But even generally speaking, we should be in space. The vast fallout, if you will, of derivative benefits in science and high technology that were developed from our space shots have been of immense value. So this is an area where it is a function of government to be a prime source of funding that is beyond the capacity of private industry. Thank God, we’re doing it.
Do you think we’ll eventually colonize and live in space?
Forbes: Nonsense. I think that makes for amusing science fiction, just like building cities in air bubbles underwater. Who needs it? We’ve got plenty of space to live in, right here. Why should we transport our problems of pollution and so on into space?
So you don’t agree with Professor Gerard K. O’Neill of Princeton University, who is busy planning blueprints for entire colonies in space?
Forbes: I’m sure there’s a value in it for military capability. As for a life-style, it might be fun to spend a weekend in Space City, but it’s got no feasible function.
Do you believe in detente with the Russians?
Forbes: Absolutely. We have detente now; we just don’t give it the name. We call it the “cold war.” Detente is not a warm friendship; it’s a standoff, just a mutual agreement that we’re not going to wipe each other off the globe and the globe with us. We have to talk with the Russians; we have to reach an accommodation at a level we can support. To have a nuclear freeze now is almost meaningless. It’s not that we don’t have enough. It’s that we want to be able to survive a first strike and they want to be able to survive one. In that name, they want a greater-than-first-strike capability. It’s an endless race. We could probably win in numbers but we would pay an economic price, too. Witness our prospective national debt and the setback to our economy, the setback to funds for social needs. Yes, militarily, I think we’re doing more than we need to.
Trade problems between the United States and Japan seem to be heating up to the point of real animosity. How do· you envision our future relationship with the Japanese?
Forbes: We should remember that world trade is a major part of our economy. Our agricultural exports nearly pay for the oil we import. Some estimate that at least one out of five jobs in this country is directly related to world trade. So we can’t take too narrow a concept. The fact is that the American consumer is the one who has made the choice for Japanese products because — as in the case of motorcycles — the Japanese have a better product; you get more for your money. The Japanese took high tech and applied it to their assembly lines, whether it was televisions, or this recorder that we’re talking into, or stereos, or automobiles.
After all, one of our most popular and least polluting cars is the Honda. It was the only one that had low emissions, high mileage, and met even California’s tough pollution specs years before the gas shortage and years before Detroit tried to compete.
But, as a people we are competitive. Our “Japanese problem” is really a reflection of management, not of Japan as a competitor. Our problem lies, in most instances, in our own executive suites. We aren’t going to save our inefficiency by erecting high tariff walls. That would effectively stop American growth. The world is a marketplace and America has the capacity to have a very large share of it. We do now and we’ll continue to. But where we have lost out, where people have lost jobs, is in companies that didn’t know how to or couldn’t compete against Japanese products and thus went out of business. The answer to them is not to save an industry that has become less efficient, but to go into areas where we either have a lead or can develop a lead. We are doing that in the fields of high technology.
Lots of people now talk about the Japanese way of doing things. But it seems that Japanese society is so different from ours — it’s so homogeneous. Are there really any valid lessons we can learn from Japanese labor and industry, or from their style in general?
Forbes: There’s a lot. We’re learning from them in the automobile industry, for instance. Instead of having to shut down an assembly line and/or spend large amounts of capital on inventory and spare parts in manufacturing, they have developed a way of bringing parts into the factory almost as they’re needed. It’s cut their cost. They can get their parts right from their supplier onto the assembly line without the expensive steps of inventorying and storage.
The Japanese also have learned to make “associates” — to use a loose sort of word — out of assembly-line workers. They pool suggestions on how to do a better job and so on. We’re now developing that. There is no longer the rigid foreman-worker separation that was the key to American management’s feeling: that it was their role to make decisions and the most they would allow workers was to suggest whether paper towels might be better than cloth ones.
Our steel, automobile, and other industries are studying Japanese management and manufacturing techniques. We’re going to learn from them just as they came over to the United States and learned from us after World War II.
Of course, we are never going to have — and who wants to have? — the sort of worker loyalty to the company in which workers do exercises at the plant in the morning and sing company songs, and, in general, where the worker’s life is the company. That’s crap in America. We don’t want any part of that life-style. When we work, we give a day’s work, but we don’t want to make it a lifetime way of life — give and die for IBM. It’s a very important part of the Japanese style. It’s an ingredient of their success. But we in this country wouldn’t want to pay that price. We want to lead individual lives. There, as you point out, because of the density of the population, the proximity of everybody to everybody, privacy is very important. But the community’s interests come ahead of those of the individual. In Japan, everybody has to conform. Here that would be a total minus.
Speaking of conforming and privacy, what do you think of the Reverend Jerry Falwell and the Moral Majority?
Forbes: I regard it as an abuse of religious conviction. I think that anybody who thinks that everyone has to follow his idea of what is right and wrong — anyone who sets himself up as everyone’s moral arbiter — is arrogant. I have no use for extremists, in any area, who proclaim that what they believe is what other people should live and be guided by. Fortunately, such people are not often of lasting influence — these waves and periodic voices, they come and go.
Inheritance aside, you spoke of your father allowing you to attain the position you have today. Could you amplify on that?
Forbes: He always emphasized the importance of who has the steering wheel. He used to say to me — and it’s been my guide in the conduct of Forbes editorially — that he never bought stock in a company on the basis of a balance sheet. He always recommended investing in a company on the basis of his impression of the caliber of the guy who ran it.
How would you set out today to make a million bucks?
Forbes: As the old saying goes, it takes money to make money. If you have some money, it’s much easier to multiply it than to get the scratch to begin with. If I were starting out as a young man — nothing in my pocket, so to speak, except an education or principally an ambition — I think obviously I would go into my own business. Find out what it is you like, what you most enjoy. It should relate to what you’ve learned from working for somebody else, or to what you really care about. Look at the people who like to climb mountains that have made money from it. They got in the business of developing light tents, backpacks, and other gear. Every day we see new millionaires in people who understand the computer and the computer software business.
If you have the desire, you can make it in any field, whether you’re a garage mechanic or a motorcycle dealer. What you are into you can turn into a good living if you are willing to put in the time and realize that you’ll probably have twenty-five-hour days before you’re done. You get loads of headaches, but you have the fun of being your own boss. Also, if you can make your business make a buck, you get to keep a bigger share of that dollar than if you’re a salaried employee.
It doesn’t mean you can wave a wand and be a millionaire. But what do you use money for? Things that give you pleasure. That’s what philosophers of economy teach in college — they call it psychic income. You use your money, if you have it, to buy things that give you pleasure. If work gives you pleasure, then you’ve already gotten some real income.
Admittedly one of the most colorful personalities of the last century, Malcome Forbes died at the relatively young age of 70 years old in 1990. While having a heart attack while you’re napping certainly beats a lot of ways there are to die, it does seem a sad testament on the risks of a lifetime of excess. That said, we can quote the second line of this article for some insight. “What’s it like to be worth between $200 and $600 million…?” Most of us probably do not need to worry about the same risks, we’re thinking.
