A Magazine That Preached "Entrepreneurship" for 100 Years — What You Remember Best Is Its Rich List | QDaily Business History

"Oh, please, Americans don't hate the rich. On the contrary, they want to become rich."

America's three most important business magazines were founded at almost the same moment.

BusinessWeek, a weekly, was founded by McGraw-Hill in 1929. The next year, Henry Luce, founder of Time, launched Fortune. Forbes, the biweekly run by Bertie Charles Forbes, was older still, dating to 1917. But 1929 was also the year the magazine's ad sales reached a peak: 1,214 pages of advertising, a number it would not beat until its 50th anniversary.

America was in a golden age. There was new progress in the arts and in human rights, but the business climate mattered more. The Coolidge administration, which took office in 1923, was a textbook laissez-faire government: small government, loose economic policy, low income taxes. Coolidge himself said in a speech that "the chief business of the American people is business." Americans also believed that trade moving back and forth would cut the odds of another war. The Great Illusion, a new book published in 1910, made that argument, and it stayed popular in the US for a long time.

Before the depression of 1929, America enjoyed nearly seven years of plenty.

Forbes's slogan belonged to that era and to the beliefs of the elder Forbes, a Republican, and of the whole Forbes family: "Business was originated to produce happiness."

The idea and the spirit behind it were passed down undiluted. In 1982, Forbes published its first list of America's richest people, and the flamboyance of the second-generation boss, Malcolm Forbes, gave that belief its glamorous, real-world face. In the 1990s, the free market and the capitalist spirit went global along with America's "victory" in the Cold War, and "Forbes" became almost a synonym for wealth — until, in the third generation, the family business had no choice but to hand itself to an obscure "rich man."

Forbes's later decline — if that word isn't too bold — was partly the fault of digitization, which left the whole of traditional media wailing. And when the economy slows, no one is spared; business magazines take the first hit. At the end of the last century, Forbes was still helping mint the new icons of wealth in the internet boom, but people soon lived through the bursting of the dot-com bubble, and before they could catch their breath the financial crisis arrived, only too happily. For a while, rethinking capitalism became the fashion.

"Only a small number of Americans still identify with the Forbes family's aspirations today," The New York Times wrote in a 2009 report on Forbes's poor finances.

Fran Lebowitz, a financial writer who knew the Forbes family, plainly disagreed. "Oh, please, Americans don't hate the rich. On the contrary, they want to become rich. Every American believes he's about to strike it rich, and on that they will never change."

Forbes Is Founded: A Self-Made Story

Bertie Charles Forbes was a Scot; people called him B.C. Forbes. His father, Robert Forbes, kept a village grocery store and had ten children. As a boy, B.C. Forbes herded livestock for the neighbors and helped in the fields.

The founding of Forbes is a classic "self-made" story — exactly the kind of story the magazine has always prized.

The elder Forbes was a newspaperman from the start. At 17, in 1897, he was a reporter in Dundee, on Scotland's east coast, earning $2.50 a week. He took night classes at University College Dundee at the same time. B.C. Forbes founded his first newspaper in South Africa. He reached New York in 1904 and joined the Journal of Commerce, where he soon became a financial-news editor. He later ran business and finance coverage at the New York American. Even after founding Forbes, he never stopped writing for other publications, and through the hard years of the Great Depression in the 1930s he used those fees to cover Forbes's running costs.

On September 15, 1917, B.C. Forbes and Walter Drey founded Forbes. That same year he became a US citizen.

The biweekly was a pure business magazine, and from the first issue it praised success without hesitation and defended the free market. "The rich have always believed that government is the problem, and that businessmen know the answer."

As for what it covered, the elder Forbes's son, Malcolm Forbes, later recalled that in this period Forbes sat between BusinessWeek and Fortune with little to distinguish it. BusinessWeek covered business news broadly across every field; Fortune did deep reporting on companies. "Forbes did a bit of everything, but its influence was much smaller."

The elder Forbes showed no ambition to build a media empire. From 1948 to 1949 he even published American Heritage, a biweekly of American scenery that cost $150 a year. Forbes bought that biweekly back in 1986, made it over, and it grew fast for a time.

When B.C. Forbes died in 1954 he left a good deal of writing behind, including a book called Forbes Epigrams. It set out the Forbes view of wealth and happiness in full; it went through more than 118 printings and was translated into 29 languages. In it, the elder Forbes tried to teach readers how to succeed and build wealth, how to run a company and run themselves, and how to find real happiness once the money was there.

Who Is the Richest of Them All

Forbes is best known today for its rich lists. It also set off a mania for ranking.

Forbes published its first list of America's richest in 1982, and in 1987 added a global World's Billionaires list. The British accountant Rupert Hoogewerf produced a China Rich List in Shanghai in 1999 and later began tracking the world's wealthy too. In 2010, two former Forbes employees helped found Wealth-X, a research firm that calculates fortunes. In 2012, Bloomberg began publishing its Billionaires Index — in real time, no less.

Apart from the consensus that Bill Gates was the richest man in the world, the numbers these outfits produced did not agree, and sometimes diverged sharply, yet almost none of them was ever shunned over credibility. The list-makers usually make their money selling the data to banks, to private-jet and luxury-goods salesmen, and to universities and charities hunting for donors — or by staging high-profile events.

In September 1982, the first Forbes 400 list of America's richest appeared. At first the rich waved it away. "What is this thing," one said in an interview. "I glanced at it once and tossed it on the table." They also worried that exposing their fortunes would invite blackmail or kidnapping, and one man planned to sue Forbes.

Malcolm Forbes paid no attention to any of it, and he was more influential than his father. He smiled with his lips pressed together and he loved to collect things: motorcycles, Russian Fabergé eggs, private jets, hot-air balloons. He was the first person to cross an American coastline in a balloon. He is said to have believed such stunts would make ordinary people who cared nothing for business pick up Forbes. He also loved staging lavish PR events, entertaining clients on private islands, yachts, and grand old castles. In 1966 he hosted more than 1,300 guests on a yacht of his own, all of them judged useful, one way or another, for promoting Forbes. When Malcolm died, his friend Donald Trump called him "an unusually positive force in American business and social life."

Malcolm had the idea for the list two years before it ran, guessing that people would always want to know who was truly rich and how the rich got there. Even inside Forbes there were doubters. The editor James Michaels recalled thinking the idea was risky: how could anyone track down all those rich people tucked away in obscure corners? They tried anyway. Mostly they combed through publications and traveled to 15 major cities to talk with local bankers, business editors, and company executives, asking who they knew to be rich, or "who's richer than you."

By 1984, when the third list came out, some of the wealthy were glad to help Forbes tally their own fortunes. "They wanted to be on the list too," said a researcher who worked on it at the time.

The lists also caught the big shifts in the business world. When Forbes ran its first Forbes 400 in 1982, it held 14 Rockefellers, 28 du Ponts, and 11 Hunts. Twenty years later there were 3 Rockefellers and 1 Hunt, and not a single du Pont.

The numbers were not precise, but you could tell at a glance which industries made fortunes fastest in a given era. In 1982, most of the money came from oil and real estate: of the 400 richest Americans, 89 were in oil, 63 in real estate, and 40 in media. A 24-year-old Steve Jobs was on the list too. Malcolm put himself at the very bottom, without a net worth attached.

The surprises were the ones worth chewing on. Sam Walton still drove a pickup, but he had caught Americans' appetite for discount stores early, and in 1983 Walmart made him the second-richest man in America. Businessmen also came to see that swings in the stock market had become the key to a personal fortune. Walmart's share price had more than tripled. Ross Perot, founder of EDS, the largest independent computer-services company, watched hundreds of millions of dollars come and go on the share price alone.

Broadly, you could also say Americans had grown richer. At his peak Rockefeller was worth $1.4 billion, 1.5% of the gross national product of his day. Bill Gates's fortune came to only about 0.6% of a later GNP. Other numbers hinted at the fashions anyone hoping to join the club would do well to follow: in 1992, 21 of the 400 richest owned sports teams.

Malcolm rode the momentum and launched the Forbes World's Billionaires list in 1987. The "paths to riches" were then handed down: in 2003 the company published the Forbes Global 2000 list of the world's largest public companies, and in 2012 the 30 Under 30 list. In 2014, Forbes held its first 30 Under 30 Summit.

By 2014, what Forbes was proudest of was its conference business and its lists. The Forbes Women's Summit was especially successful. The other lists included the Forbes China Rich List, the Forbes Fictional 15, the World's 100 Most Powerful Women, the Celebrity 100, and the Forbes Travel Guide star ratings.

A Crisis of Capitalism

In September 2001, Forbes's then editor-in-chief, Steve Forbes, planned to run the old play again and entertain guests on a yacht. They passed the Statue of Liberty, downtown, and the Twin Towers, but the view was not what it had been.

After Steve Forbes took the magazine over from his father, the good years lasted another decade, thanks in part to the steady quality of the editorial team. In the early 1990s, Forbes led the reporting that exposed the "Wolf of Wall Street," Jordan Belfort.

In 1992, Forbes launched Forbes ASAP to cover e-commerce. Sold bundled with Forbes itself, the bimonthly was one of the first magazines to cover the internet boom.

At the end of 1996, Forbes launched a website — another early move — betting on digital rather than long, dense reporting. The site drew investment from six companies, including BMW and Oracle. Editors at the time reckoned it would turn a profit by 1998.

Going digital cost the family business a great deal of money, and the dot-com crash that followed at the turn of the century destroyed most of the media the boom had produced — Forbes, Fortune, and BusinessWeek were all hit. ASAP became a quarterly in its last year and closed in 2002. That year a Forbes spokesperson said: "There's no longer a market for new business publications."

It showed up mainly in ad revenue that could no longer carry the magazine. At first AOL and Yahoo ran page after page of ads in Forbes, hoping an authoritative magazine would give them a name. Within a few years those same internet companies had become Forbes's biggest rivals for advertising. "That's the climate, and we're not immune either," Steve Forbes said, repeating the line around 2002 and again around 2009. He added that things were the worst they had been since the 1930s.

In 1933, because of the Depression, Forbes ran 269 pages of advertising for the whole year. Before the Depression, in 1929, it had run 1,214. In 2000 and 2001, Forbes's ad pages fell by half against previous years.

Today's Forbes is described as having a "split image." In digital advertising it has been aggressive: its BrandVoice system lets advertisers post articles straight onto the Forbes site. By 2013 some 1,200 bloggers were writing for Forbes, paid according to how popular their pieces were, and the magazine was accused of clickbait, of diluting its brand, of "busywork."

"The company has, on one hand, become a self-promoting digital pioneer — yet at the same time it has called its own brand into question," the media analyst Ken Doctor told the Financial Times.

Some felt that once Malcolm's liveliness was gone, Forbes was less appealing. Steve Forbes also ran twice for the Republican presidential nomination, in 1996 and 2000, and lost both times; the public was cool to his flat tax.

But the trouble Forbes ran into may have gone deeper. It is no exaggeration to say the times had changed, and the capitalism it celebrated dealt it a double blow within its own lifetime.

In the fourth quarter of 2008 and the first quarter of 2009, US GDP fell about 6%, the first back-to-back decline since the late 1930s. Economies everywhere were contracting: in the first quarter of 2009 Japan's GDP fell a startling 9%, Germany's 7%. Some emerging economies were badly hit as well.

On the cover of the November 2008 issue, Steve Forbes tried to turn the tide. In his later book of the same name, How Capitalism Will Save Us, he wrote:

"The free-market economy may indeed be destructive and unpredictable, but this process of 'creative destruction' is essential to the healthy development of both the economy and society."

"The rich get rich by creating opportunity and wealth for others."

For business magazines like Forbes, and for publishers generally, what came next was still not good news.

In 2009, Bloomberg bought BusinessWeek for just $5 million (there have since been reports it may be shut down). Fortune announced it would cut its issues from 25 a year to 18 starting in 2010.

Forbes fought on alone. In the end it had to sell much of Malcolm's old collection, and its old office building on Fifth Avenue in New York.

Asia Takes Up the Forbes Vision of Wealth

In 2013, word came that Forbes meant to sell itself as well.

The rich were buying media in bulk, and the usual explanation was that they had developed a public-spirited sense of philanthropic duty, or wanted to push some political agenda, or were simply pleasing themselves.

That year The Washington Post was sold to Amazon's Jeff Bezos for $250 million. The common view of that deal was that Bezos's insight and experience on the internet might really help the Post recover.

Earlier there was speculation that Time Inc. could be a buyer for Forbes. The two sides probably did talk; Forbes executives were spotted at Time's headquarters early on. But they likely could not agree on price. Time knew perfectly well that with revenue disappointing, Forbes was worth less by the month. A valuation above $400 million also scared off China's Fosun Group, which had been interested, and Europe's largest publisher, Axel Springer SE — though Axel Springer went on to buy the business site Business Insider, valued at $390 million.

The investment firm Elevation Partners had bought a minority stake in Forbes Media in 2006, with the option to sell that stake back to Forbes at the same price a decade later. It later judged that Forbes's performance "fell short of our original expectations." To avoid being forced to buy the stake back, the Forbes family spent nearly a year looking for new investors.

The family finally sold the media business to Integrated Whale Media Investments, a group of Asian investors. The deal valued the business at $475 million. But the Forbes family also lent the buyer tens of millions of dollars toward the purchase — something that happens only when a seller is desperate to close. The two sides later fell out over $40,000 of interest.

As the farce ended, the Financial Times, like many observers, asked: why would Forbes sell its flagship product to a financier working in an opaque corner of the Hong Kong market?

Most likely because Asia is where the Forbes vision of wealth and happiness is now being practiced.

Forbes's first international venture came in 1997, when the family decided to publish an international edition of the magazine called Forbes Global. Based mainly in London, the biweekly covered business outside the North American market. In 2001, it had a circulation of 110,000, with most readers in Europe and Asia.

But the changes stirring in the emerging world were clearly more promising.

In 2001, Forbes held its first Forbes Global CEO Conference, in Singapore. Steve Forbes was even photographed with Singapore's prime minister, Lee Kuan Yew.

Forbes launched a Russian edition in 2004 and a Mexican edition in 2012. Today it has 37 local editions around the world. Its Asian summits are still popular and still make the company good money, the women's summit above all. The Financial Times has also reported that the new owner, Integrated Whale, may extend the Forbes brand into Asian financial services and real estate.

Forbes may well recover in another form. In the places that have chased a free market for years without reaching it, free-market capitalism still has boundless appeal, and rethinking modernity looks beside the point. The "Forbes" of 1917 is the most forceful answer to that idea.