by Mark Skousen
“No system has been as effective as capitalism in turning scarcity into abundance. Democratic capitalism, as a system, is more humane than government-dominated command-and-control economies.” — Steve Forbes
One of the curiosities of financial history is that 1917 saw the birth of both Forbes Magazine, America’s first business magazine, and the Bolshevik Revolution that launched the anti-capitalist movement of Marxism/Leninism.
The centennial event is not unlike a modern-day version of Job in the Old Testament, who was blessed with wealth and then tested by the devil. Similarly, after seeing the flowering of free enterprise and the flourishing of his faithful servant B.C. Forbes, God allowed the devil to test the invisible hand of market capitalism with its greatest threat, the spread of communism and the Soviet socialist central planning model throughout the world during the 20th century. Like Job, Forbes’ brand of heroic capitalism would ultimately withstand the test and win this war, but not without a great deal of human suffering under communism. At one point almost a third of the world’s population lived under the cruel yoke of communist rule.
Three generations of Forbeses have been at the magazine’s helm and participated in the intensive battle of ideologies between capitalism and communism. Who were they, and what did they contribute to the fight?
—Treason in the Textbooks. Founder B.C. Forbes lived largely in an era when capitalism was on the defensive. Socialism and Nazism were all the rage during the Great Depression, especially on college campuses. During the late 1930s, B.C. Forbes became embroiled in a nationwide fight over high school textbooks written by “radical professor” Howard Rugg of the Teacher’s College at Columbia. This was the era of “progressive” education under John Dewey and other like-minded educators who encouraged students to question the old-fashioned patriotism of the past and the view that America is the “land of opportunity” for all.
B.C. took a seat on his local school board in Englewood, N.J. in order to rid classrooms of what he felt were “communist-inspired” textbooks. Forbes said that the Rugg books were “shot through … with the kind of propaganda championed by the Communists.” He wrote, “If I were a youth, I would be converted by reading these Rugg books to the belief that our whole American system, our whole American form of government, is wrong, that the framers of our Constitution were mostly a bunch of selfish mercenaries, that private enterprise should be abolished, and that we should set up Communistic Russia as our model.” B.C. and his followers were largely successful in their cause, and by 1943 most of Rugg’s textbooks were no longer used in American classrooms.
–Malcolm Forbes: Happy Warrior for Capitalism! Malcolm Forbes (MSF), representing the second generation to run the magazine, took a more positive approach during the Cold War era. After having run for the N.J. governorship twice (unsuccessfully) in the 1950s, MSF gave up his political ambitions and became a happy warrior for capitalism. But instead of attacking communism directly, he began a campaign promoting the idea that capitalism is a better system than communism.
How do you get rid of a bad idea? With a better idea! MSF did this by promoting Forbes as a “punchy, highly profitable, easy-to-read, mass-circulation business magazine devoted to money, wealth and success,” to quote Forbes biographer Arthur Jones. It worked, as Forbes surpassed rivals Business Week and Fortune as the world’s most influential business magazine.
Malcolm Forbes exuberantly and unapologetically promoted entrepreneurial capitalism. He collectedFabergé eggs, motorcycles and hot-air balloons; flew the world in his money-green-and-gold jet, the “Capitalist Tool”; and lavishly entertained current and potential advertisers on his yacht, The Highlander. This contributed to Forbes’s reputation not only as a great journalistic and commercial powerhouse but also the symbol of entrepreneurial success.
MSF countered the challenge of Russian leader Nikita Khrushchev by, in essence, saying: “We capitalists will bury you!”
To counterbalance Mao’s “little red book,” MSF published his own little green version, “The Sayings of Chairman Malcolm.” He was also the first person to free-fly in a hot-air balloon in China in 1982, defying flight restrictions placed on him by Communist officials.
MSF’s revolutionary capitalism campaign achieved the ultimate triumph in November 1989, when the Berlin Wall was torn down.
–“Capitalism Will Save Us!” Steve Forbes took over the reins in 1990, when his father died of a heart attack. Steve has successfully managed the difficulties of the “creative-disruption” era of economic freedom. When Mikhail Gorbachev engineered his own anticommunist revolution in Russia, the former Russian leader became a private citizen. In May 1992 Gorbachev decided to take a two-week tour of the U.S. Steve made the company jet, the “Capitalist Tool,” available to Gorbachev and his aides, flying them around the country, which included stops at the Chicago Mercantile Exchange and the NYSE, not to mention Radio City Music Hall, where Steve introduced Mr. Gorbachev and Ronald Reagan to a crowd gathered to celebrate Forbes magazine’s 75th anniversary.
Throughout his career as editor-in-chief, Steve Forbes has championed the benefits of low taxes, sound money and sensible government regulation over heavy-handed government regulation. Neither Keynesianism nor socialist central planning promised any lure, even during the financial crisis of 2008–09. “Only a dynamic, entrepreneurial private sector is capable of producing the [necessary] growth and prosperity. Government command-and-control economics simply can’t do it,” he concluded in How Capitalism Will Save Us (Crown Business, 2009).
Since 1917, we’ve witnessed a running war between these two major forces of political ideology. At times Forbes magazine barely survived the onslaught from its enemies, but it has ultimately been able to conquer the boom-bust publishing business cycle and the foes of economic liberty. At this year’s FreedomFest Steve Forbes declared victory: “The spirit of capitalism lives on,” he stated triumphantly. William Baldwin, the former editor of Forbes, said it best, “Capitalism andForbes have outlived the Bolshevik Revolution.”
–Mark Skousen is the producer of FreedomFest and a presidential fellow at Chapman University. A version of this article was also posted at forbes.com