The chair of Forbes Media shares his thoughts on taxes, China and the U.S. presidential race
1. In your view, how healthy is the Canada-U.S. relationship? What should Canada be doing to keep ties between our two countries strong?
One is to urge our Congress to pass the U.S.-Mexico-Canada trade agreement. And also set a good example by instead of your prime minister raising taxes, you should be cutting taxes. In other words, doing what [Canada] did a number of years ago: when the Conservatives took over, they went in for big tax cuts and big deregulation, and got some good results.
When a country does well, other countries will imitate it, and a strong Canada means a stronger U.S., so it’s a win-win.
2. To thrive in the global economy, where should a region like Metro Vancouver focus its energy?
You’ve already had an influx of people from Hong Kong and elsewhere, and that’s only going to intensify as Beijing puts its claws deeper into Hong Kong. And again, don’t overdo it on taxes and regulation, and you will boom like Dallas and Houston.
3. How do you think China will impact the world over the next decade?
That depends on China recognizing that it cannot recreate the old Middle Kingdom. The rest of the world is not going to kowtow to Beijing, and it should focus instead on creating an environment for economic growth. In recent years, state-owned companies have re-emerged as a growing factor in the Chinese economy, which is not a good thing.
If China goes for trying to flex overtly more and more military muscle, it’s going to get more and more of a reaction–other countries wanting to tie closer to the U.S. as a counterweight. So hopefully China will not follow the example of Japan and Germany 120 years ago, and instead go for letting its economic might speak for itself.
4. What are a few things you’ve learned about the wealthy over the years? Besides having more money, how are they different from average people?
It’s not background. They come from all kinds of different backgrounds. For example, the 400 richest in the U.S.—our Forbes 400, which comes out in the fall—over two-thirds are self-made, and most of the rest are ones who inherited but increased their inheritance through successful business activities.
How they’re different is they’re striving to create things, do things, willing to experiment. And also recognizing that in entrepreneurship, you have your failures. Peter Thiel, who was involved in PayPal and Facebook, likes to point out that nine out of 10 of the projects he gets involved in fail. So it’s the willingness to do the 100-hour workweek, try the unknown and recognize that they can eat well or sleep well but not both.
5. Income inequality is on the rise everywhere. How concerned should we be about the growing divide between the haves and have-nots?
The key is rising incomes, and incomes rise when you have a benign environment. Here in the U.S., you’d never know it from the public rhetoric, but most people don’t care if Bill Gates has $10 billion or $100 billion, or whether Jeff Bezos has $120 billion after his divorce or $110 billion. What they want to know is, what are their prospects? What are their chances of moving ahead, moving up the economic ladder?
And in a lot of countries, there’s slow growth that’s self-imposed from bad policy. Whether it’s high taxation or crazy regulations, those things inhibit growth. By contrast, you look at a country like Singapore, which has always had a benign economic environment, low tax rates. They have an excellent health-care system even though their tax rates are extremely low. They’ve also got a good housing system. So having economic growth does not mean not having robust social programs or a safety net.
But what you want, again, is that environment where people can get ahead. And it starts with sound currency. Canada should strive to have the Canadian dollar become much more stable. Instead of letting it float, it should strive to make the Canadian dollar as good as the Swiss franc. And then Canada will become, among its other attributes, a centre of capital and high-tech even more than it is now.
6. What advice do you have for a young entrepreneur starting out today?
Recognize that it’s a life that’s not right for everyone. People may have the knack for it, but don’t force yourself. You can give it a try, especially if you’re young, but don’t feel bad if it turns out it’s not for you. We’re all different.
But if somebody has the knack for it, recognize you are going to lead an abnormal life in terms of the hours you put in, the dedication you have and also the failure you’re going to have.
7. What are your thoughts on the future of publishing as a business?
On Forbes.com, where we have over 70 million unique visitors a month, we don’t have a paywall. We charge for certain newsletters and the like, specialized content, but overall, we welcome eyeballs. So we’re advertising-supported, and we’re also big in events, big in licensing.
So publishing, in terms of print, has to be part of a package. Even before the Internet, take newspapers, they were packages. They had sports, stock market tables, mutual fund tables, crossword puzzles, horoscopes, comics, news. Each part of the package doesn’t have to be self-supporting; it’s just got to be part of a group that makes it desirable.
8. Where are we headed with automation and AI?
Automation and AI will end up creating new jobs and a higher standard of living. It’s too bad we use the term artificial intelligence, which is really a tool for doing neat things. We don’t call airplanes artificial birds, and we don’t call automobiles artificial horses.
We’ve had massive technological change in the past 200 years, and the amazing thing is, 95 percent of the workforce has jobs. Back in the ’60s in the U.S., when concerns arose about automation, 60 percent of those jobs don’t exist anymore. And we have a whole slew of new ones, and U.S. unemployment’s the lowest it’s been in 50 years.
9. You ran for president in 1996 and 2000. Who will win the 2020 presidential election?
If I knew that, I’d be in Las Vegas placing bets and getting on the Forbes 400 rich list. With Trump, his situation reminds one of back in 1972, when Nixon was running for re-election. The head of the Democratic National Committee, a fellow named Robert Strauss, who had a great wit, said, “We Democrats could beat Nixon in a landslide if we didn’t have to run anyone against him.” They have to run somebody. And if the Democrats keep lurching to the left, people are going to go with the incumbent if the economy is good. If the economy is not good—if this trade thing gets out of hand—then the Democrats could win.
On November 20, Steve Forbes will be the keynote speaker at the sixth annual Surrey Innovation Awards Lunch, hosted by the Surrey Board of Trade and sponsored by BCBusiness. For tickets to this event, emceed by Canada Wide Media chair and CEO Peter Legge, visit businessinsurrey.com or call 604-581-7130
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