The capitalist kid hits town

Steve Forbes, the billionaire publisher and apostle of the free market
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As if the weather were not bad enough, London was hit by a different kind of storm last week. It broke on Tuesday with the arrival of Steve Forbes, billionaire proprietor of the eponymous capitalist bible and twice American presidential candidate.

As if the weather were not bad enough, London was hit by a different kind of storm last week. It broke on Tuesday with the arrival of Steve Forbes, billionaire proprietor of the eponymous capitalist bible and twice American presidential candidate.

Within 24 hours, Hurricane Forbes was heading back across the Atlantic, but not before having laid waste many of the conventions that dictate the conduct of British government. Mr Forbes may have left George W Bush to take the Republican message to the US polls next week, but that has only given him more time to hammer home to the British his message that government is bad and tax cuts are good.

"The idea of spending billions of pounds a year filling out idiotic tax forms in a code nobody understands seems a huge waste of time and brainpower," he says breezily, implicitly questioning the sanity of anybody failing to concur.

"Thanks to Margaret Thatcher's regime, you set in train policies which turned the UK from the sick man of Europe into its most vibrant economy," he continues. "Unfortunately, as happened in the US after Ronald Reagan, the lessons seem to have been forgotten for a while and the tax burden continues to go up."

Say what you like about Mr Forbes - and plenty do - he is nothing if not consistent. His political platform is built on a 17.5 per cent flat tax rate designed to stimulate the kind of entrepreneurship his magazine celebrates. Established by Malcolm, Steve's grandfather, Forbes magazine has become synonymous with its annual list of the 500 richest people in the world.

Malcolm Forbes upped sticks from rural Aberdeenshire in the 1920s and took to hanging around New York's plushest hotels to pick up the latest financial gossip for his new publication, which he continued to edit until his death 10 years ago. Since taking over, Steve's main contribution to the family business has been the launch of Forbes Global, designed to carry his "Capitalists of the world, unite!" message to every corner of the earth.

Ostensibly, this has not been a good year for the chosen 500, many of whom built their fortunes on the surge in technology stocks which has been so spectacularly reversed. But Mr Forbes believes that lost stock market fortunes will be regained. All it takes is for Federal Reserve chairman, Alan Greenspan, to start cutting interest rates and for politicians to stop interfering in the technology boom.

"Most stocks in the S&P 500 actually went down in 1999," he says. "So mandarins like Mr Greenspan shouldn't have got worried and raised rates. Markets adjusted themselves without any help from Washington. The only other thing that could hurt the market is regulation. Hi-tech has had a free ride until now, but now the internet has collided into telephony, television and radio, which are all heavily regulated.

"It raises very real questions about whether technology can progress as it should. If you just let it rip, I think you'll see enormous innovations."

The threat of break-up that is hanging over Microsoft is a classic case of unnecessary and even counterproductive regulation, Mr Forbes believes.

"The government conjured up reasons why they should destroy Bill Gates's company and that's cast a pall over the market," he says. "The idea that any one company could dominate the internet is preposterous. In fact, technology is the great leveller. Your success today is no guarantee of success tomorrow."

Mr Forbes has twice failed to convince more than a smattering of the American population that his pure strain of economic liberalism is the answer to its problems. In comparison with Europe, however, he believes America is an oasis of clear entrepreneurial thinking. To his mind, the UK should look west and join the US, Mexico and Canada in the North American Free Trade Association (Nafta). Better that than succumb to the lure of the euro and all the over-regulation he fears that will bring. "Of the growth we've seen in Europe, much of it has been a dead-cat bounce. They haven't made the fundamental changes they need for entrepreneurship to flower."

If that sounds like music to the ears of the Tory party, don't be fooled. Mr Forbes believes that the shadow Chancellor Michael Portillo has struck a bum note by allowing Labour to shift the political agenda back to the centre.

"Mr Portillo has proposed £8bn of tax cuts," he begins. "If that's the best you can do, why bother? There should be substantial tax cuts and tax reform. The Tories are worrying about cutting spending, but look at what happens when you do cut taxes properly - the government ends up with more revenue. On tax policies, the Tories are back where they were before Thatcher."

As I leave Mr Forbes's suite at the Savoy, whom should I pass but Michael Portillo himself, flanked by a trio of advisers, there perhaps to protect him from the force of the American's rhetoric. They need not have worried. As quickly as it came, the storm had passed.