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Forbes Sings a Paean to Capitalism

July 03, 1987|BILL STEIGERWALD

Even Karl Marx would probably be converted by the 490-page manifesto to capitalism that Forbes, the ever-eager Capitalist Tool, has produced to mark its 70th birthday.

Thickened with 302 ad pages worth $10.5 million in revenue, the issue is rich with raw data, economic concepts, historical perspective and passionate arguments for free markets, freer trade and less government economic regulation.

The issue's oft-repeated theme is economist Joseph Schumpeter's idea of the "creative destruction" of capitalism--the concept that a society's economic evolution depends in great part on capitalism's powerful winds of change that sweep away old social structures and technologies and replace them with new and better ones. But compassionate democratic governments often try to protect the victims of change with legislation, says Forbes' William Baldwin, and so the difficult trick is to help short-run victims "without thwarting the wrenching change through which capitalism renews itself."

Even Biggest Are Vulnerable

As part of its proof that "nothing is permanent in big business except change," and to demonstrate that even the biggest companies are vulnerable to it, Forbes charts the life cycles of the top 100 companies of 1917. Change has swept away all but 22, and of those, only 11 survive unchanged and with the same name. For example, Baldwin Locomotive Works, No. 81 in 1917, thought the steam locomotive would last forever. Now it's just a subsidiary of Greyhound.

Among 30-odd other change-loving articles, Nobel Prize-winning economist George Stigler says unfriendly corporate takeovers are good for stockholders and the economy. Jerry Flint says that the media and academic pessimism about the decline of capitalism is fallacious and ill-founded (our real standard of living is increasing 20% every 10 years, he says). Peter Huber argues that the greatest threat to American competitiveness and our standard of living comes from courts and federal agencies that are strangling the development and marketing of new technologies.

And Drexel Burnham's Michael Milken, an "apostle of change" whose inventive and controversial "junk-bond" financing schemes are credited with having "done more to change American business than anyone since J. P. Morgan," humbly advises: "If you want to be successful, you have to embrace change, not fight it." Milken, 41, may be on to something. According to Forbes, his personal worth is about $500 million.

The Great Lakes

Lake Erie isn't "dead" anymore and today the waters of the Great Lakes fairly sparkle. But lakes Superior, Huron, Michigan, Erie and Ontario are still nothing like the "sweetwater seas" that 17th-Century French Jesuits used to call them, says National Geographic.

The Great Lakes--home of 95% of the surface fresh water in America (and enough to cover the contiguous 48 states 10 feet deep)--are troubled waters. With its customarily spectacular graphics, the Geographic employs everything from photos of a fish with lip cancer to weather satellite pictures and a data-rich fold-out painting of the entire ecosystem to explain the natural and man-made problems besetting North America's fifth coast.

Most of the industrial pollutants and the phosphorus-laden sewage that accelerated the lakes' natural aging process and so badly gunked up Lake Erie with thick green algae have been eliminated. But there is airborne pollution, and unseen, non-odorous toxic chemicals like PCBs in the waters pose a serious danger to the 40-million people living in the highly industrialized region. One U.S.-Canadian study said Great Lakes residents "are exposed to more toxic chemicals than those in any comparable segment of North America."

Man-made problems are being addressed, but nature is another matter. High precipitation in the Great Lakes watershed and 25 years of colder-than-average temperatures that have reduced evaporation have raised lake waters to their highest levels in a century. Lake Michigan already periodically sloshes into downtown Chicago, and violent Lake Erie storms seasonally wipe out beaches and sea walls and destroy shoreline homes. And one scientist, who describes the lakes as overflowing bathtubs with no plugs, predicts that levels are headed even higher.

Parking Problems

In the Atlantic's "How to Save Our National Parks," Alston Chase contends that America's wilderness areas are an ecological mess (Atlantic uses the word crisis ) and that the main source of the problem isn't the Reagan Administration or Congress but the National Park Service itself.

Vacillating between the goals of preservation and providing for public use since its creation in 1916, the Park Service has poorly managed the country's 337 natural and historic sites, Chase says. "What our national parks need, more than protection," he says, "is restoration. If they are to be preserved, they must first be restored to a semblance of ecological balance."

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