Saving The Nation

THE OPEN MIND
Host: Richard D. Heffner
Guest: Victor Navasky
Title: “Saving The Nation”
VTR: 3/3/98

I’m Richard Heffner, your host on The Open Mind. I’m also its producer. And the nicest thing about that is my ability to pick and choose who it is I would like to talk with on this program, and about what.

Frequently, of course, the “who” is an old friend. As today, when my guest is Victor Navasky, the longtime editor, and now the owner of The Nation, the journal of liberal opinion that is also America’s oldest weekly magazine, having been founded in 1865.

Well, Victor was my Open Mind guest back in 1980 when we argued at this table about Naming Names, his intriguing book about the Hollywood blacklist and the enormous pressures put on people in the movie industry to name names, to inform on even old friends and colleagues who, to one degree or another, had been involved with Communist Party or other radical meetings or activities. He and I and the late, great journalist Dick Clerman, were also senior fellows together at the Freedom Forum’s Media Studies Center at Columbia a few years ago. Victor was working on a book about the historic role of journals of opinion, Dick on a book about the influential editorial page of The Wall Street Journal. And I was trying to bite the bullet and accept, once and for all, that voluntarism and the rating game simply can’t adequately enough protect our children from the ravages of harsh, new media content in an unregulated and totally market-driven society. That book is being written now.

And then, in the January 1998 issue of The Atlantic Monthly, I happened to read an absolutely charming Navasky essay titled “Saving the Nation,” and subtitled “The New Owner of the Financially Challenged Nation, a Strong Liberal Voice for 135 Years, Goes to Harvard Business School Looking for a Way Out of the Red.” And I determined right there and then to invite Victor here to share his new capitalist insights.

Victor, what did you learn?

NAVASKY: It’s good to be here.

Well, let’s see. Our subscription manager asked me that question when I came back to New York: “What did you learn at Harvard?” And I told her I learned a new way to think about our subscribers. That when I went up there, I used to think, if someone cancelled a subscription to The Nation because they were upset about something one of our columnists said, Alex Coburn or Katherine Pollack, I would send him a letter and say, “Are you sure that you want to cancel this subscription?” But I would figure that it would cost us 48 bucks, which was the price of our subscription. I went up to Harvard, and they taught us, among other things, the value of the lifetime subscriber. In other words, so that when I came back, I understood that since 80 percent of our subscribers, or our subscribers renew at an 80-percent rate, if they subscribe for four years or more, and the average rate of The Nation subscriber was 47.5 years, and 15 percent of our subscribers send this extra money and join something called Nation Associates because they care about the magazine so much, when you add up 80 percent times our 100,000 subscribers times 47.5 years times, minus, you know, adding the 15, and all of that, when someone cancels, we’re losing over a thousand dollars worth of lifetime revenue from someone rather than $48. So our circulation manager said, “So what do you do about that? What can we do about that?” So I said, “Well, you know, we could write him a letter and tell him he shouldn’t do that. And are you sure you want to?” And she said, “But you already do that.” And I said, “Yeah, that’s true.”

So I’m not sure what I learned. I learned a lot of funny, little things. They gave us books to read. Now, I could talk to you about them, but…

HEFFNER: Well, what did you learn about the business ethic? Or maybe the question isn’t “What did you learn?” but: What changed in you given your exposure to these people who, I would think, start with a very different point of view than the one you began to work with?

NAVASKY: Well, you know, there’s that old story about George Bernard Shaw and one of the Hollywood moguls. And Shaw said to the mogul, “The trouble is, you’re interested in culture, and I’m interested in money.” I was interested in: How do we take this magazine that’s lost money for 135 years and have it pay its own way in the world? And a lot of my fellow students up there were interested in: How do you feel better about your life, and how do you make some contribution while making your fortune? So that was a surprise to both of us.

The business ethic, as it’s taught up there, however, is very seductive, and they use the case-study system, so there isn’t an attempt to formally persuade you that the capitalist system is the best system in the world and that the free market is the answer to the problems of Third-World economies or anything like that. But you look at cases, and the analysis of the case always has as the assumption that the way you judge the effectiveness of the company is the bottom line. And frequently I found myself at odds with my fellow students when we would discuss these cases. For example, the first day I was up there, the professor wrote on the blackboard, and they have these elaborate electronic blackboards that they press buttons and they go up and down, it’s in a room that’s like an arena stage, and professors running up and down and making things, marks on the thing. So I said, “All right, let’s make a list of the pros and cons of this company.” And he writes “Con” on the left, and “Pro” on the right. And he said, “What are some of the cons?” So some guy raises his hand, he says, “It’s a union shop.” Well, I was brought up to think a union shop can be a pro, not a con. It’s a pro for the workers, but not only that, it can increase productivity. So I, you know, raised my hand. I said, “Well, it’s not necessarily a con. Unions can increase productivity.” Well, there were a lot of snickers around the classroom.

So there are a set of assumptions that I arrived with that didn’t change, about how the world works. And then there are a set of assumptions about how businesses can be run that were, I learned something, and who knows whether my fellow students learned from me. Of course, I saw them all as potential investors in our magazine, and one of the benefits of being there was that the program, which is called the “Owners’ and Presidents’ Management Program” (OPM), consisted of young, for the most part — not all, but most part — entrepreneurs who had either founded their own businesses, entered the family business and wanted to professionalize it, or came from overseas and wanted to see how Americans did it, or had catapulted from middle management to the top of their companies. And they all were great business successes. So we had a lot of exchanges of ideas.

HEFFNER: But, you know, I was so intrigued with saving The Nation, because I wondered, well, I was thinking of my own odyssey from a young man who was very much opposed to the capitalist ethic, to one who saw more and more value in what was happening around the world, more and more value to the or in the marketplace ideal, and then one who, in his later years, has moved back again and whose odyssey really has taken him kind of full circle. And I wondered, when I read that, in the Atlantic piece that you wrote, that first day’s events, what are the pros and what are the cons of this acquisition, con must be that it’s a union shop, your response to that. Do you think we’re talking about a basic conflict that really can’t be resolved between those who believe in the marketplace and those who believe that the bottom line is something other than the bottom line?

NAVASKY: Not really. I mean, there were, there was a Turkish businessman who put his arm around me and said, “Well, we’re the two communists in the class.” And he ran a multimillion-dollar set of holding companies. And there was a fellow whose family owned something like 70-odd Wendy’s franchises. And one day we were talking about what is the function of business, and he said, “Well,” he said, “The function of business is to make a fair profit, to provide a top-flight product, the best possible product, and to help our employees improve their lives.” And, you know, this is a noblesse oblige…

HEFFNER: You don’t want to dismiss it that way, do you?

NAVASKY: …patronizing attitude on one level. And it isn’t really. I mean, he really meant it. And it’s the best that you can hope for. And the fair-profit part is the capitalist part. But that wasn’t the main motivation or ethic of the man who made that statement. And I found it moving and impressive.

On the other hand, a lot of what goes on in a place like that doesn’t deal with the bottom line, except indirectly. It may deal with different kinds of management, and some of it is this kind of fuzzy-wuzzy stuff about, that has to do with hierarchies and teams. And there’s one company in the far West where people who get hired in the company define their own jobs, and they name their own jobs, and they decide who they’re going to work with on the job. And it sounds like it couldn’t possibly work, and the company is making fortunes. And you say, “Well, this is an accident of where it is and the charismatic leadership.” And then some English company imitated exactly what they did, and they all started making fortunes. So you can’t know.

HEFFNER: Can you apply any of that to The Nation?

NAVASKY: Well, again, it’s so, some of the literature is so loopy that it’s hard to apply, and yet maybe.

HEFFNER: Wait a minute. What do you mean, “fuzzy-wuzzy” and “loopy?”

NAVASKY: Well, I’ll give an example. One of the books that I read as part of this experience… You went for three weeks a year for three years, because the other executives couldn’t possibly take all that time off from their job, and it was, I had taken a leave of absence from the magazine. But one of the books we read was a book called The Flight of the Buffalo. And the point of this book was that many business leaders think that their job is to be like the lead buffalo, and that you go charging off in one direction and that all the other buffalo will follow. And the author of this book said, “It’s not that way at all.” That, in fact, the problem with that paradigm is that the lead buffalo would go charging off and the others would follow, so that’s how the early settlers were able to decimate the buffalo herds. They would kill the lead buffalo, the other buffalo would stand around waiting, and they’d knock ‘em off. And that what a good business leader is is not a buffalo, but a goose. So, going on, reading on, because geese fly in formation and they fly as a team, and when the head of the team goes off someplace, another goose goes up there and takes his place. And what you have to have, according to this book, is you have to have, implant the idea that each of the workers in your establishment is, in effect, an owner, and is as responsible as every other worker for the formation itself, for the whole business. And so that was kind of intriguing to me.

And then I read further on, and I learned something as I read further. And what it said further on in this thing was that, you know, if your business isn’t working, you tend to blame whoever is in charge of it. If it’s newsstand sales, who’s in charge of newsstand sales, you’d call in the newsstand-sales manager, “What’s the matter? This isn’t happening.” Or if it’s something else. And that the moral of The Flight of the Buffalo was: If your business isn’t working, you’re the leader of the business, it’s your fault. It’s not someone else’s fault, because if someone else isn’t performing, you haven’t taught them properly, or you haven’t motivated them properly, or you’re letting someone stay in a job when they don’t belong there, they belong in another job. And so you’re at fault.

And so it was very helpful, when I came back and people said to me, “So what did you learn out there?” I said, “I learned that you’re not the problem; I’m the problem.” [Laughter] And that’s helpful. And the idea of…

And it’s really an education at that level of reminding you of the obvious, that it makes more sense to consult people who are interacting with customers, who do the day-to-day work, rather than giving them orders, to find out what their problems are.

And then there are a lot of, kind of, bromides that are fun to think about. I mean, you know, you hear in the culture, “The customer is always right.” Well, what does that mean? Well, there was a great professor up there, a fellow named Ben Shapiro, who said very movingly, he said, “You know, there is no reason to lose a lifetime customer except death. His,” he said, “And that you really have to extend yourself to cultivate these folk.”

HEFFNER: That’s like your subscriber.

NAVASKY: That’s like our subscriber.

HEFFNER: You don’t let him go. So if I go down to The Nation…

NAVASKY: Yes.

HEFFNER: …and I haven’t been there in a long, long, long, long time, what do I find? Buffaloes? Geese?

NAVASKY: You find very hardworking people, most of whom are critics of the system of government that we have, not because it doesn’t reward them, but because it results in, it exploits others. And the way that intersects with Harvard, for example, would be: we ran an article about a company that franchises pawnshops, in the magazine. And the Nation article was very critical of this company because it ended up charging loanshark rates of interest to its customers. And it pointed out the hardship this reaped on the poor. At the Harvard Business School, the same company was held up as a paradigm of good management. And when I, the way your day is organized up there is, you all sleep in the same dormitories (it’s like going back to college), and you’re on rows together. And then, about 7:30 in the morning, you gather around a table not unlike this, for a study group which meets in advance of your class to work through the problems of the cases. And when that case came up, there are six or seven in your study group, I raised the question about whether there was anything wrong with a company charging these rates. And I thought, you know, it was an interesting subject for discussion. But the discussion was not, turned out not to be about the high or whether the interest rates were too high that people were being charged; it was, interestingly: If the company is making money, it means they are providing a service that people want, and therefore poor folks who aren’t eligible for other kinds of loans are able to get cash that they couldn’t otherwise get. And that the reason they were poor, however, was their own fault, and that those who could survive… And it was a kind of survival-of-the-fittest, market-economy ethic.

So you had a debate between those who felt that the poor were poor because of, as a result of their own inadequacy, and those who felt that that wasn’t true, but the, I guess, the preponderance of belief was that it was a market test of whether the company was doing a good job or not.

HEFFNER: Victor, is it unfair to come to the conclusion that you didn’t come away having adopted what most of your fellow students would take as their essential philosophy?

NAVASKY: I came away with a lot of respect for my fellow students. And I came away with a new understanding of balance sheets, and so that the accountant can’t lord it over me the way he could before. But, no, you don’t change your fundamental value system in three weeks at Harvard. And thank God for that.

HEFFNER: Now, that leads me to a much more important question. Given the fact that The Nation, in a sense, has to support itself now, is there any shift in editorial concepts, editorial position?

NAVASKY: Well, the way I got up to the Harvard Business School was, I had a friend on the faculty, his name is Sam Hayes, and he’s a corporate finance professor. He’s on the board of Tiffany’s. And we had been on the board of Swarthmore College together. And I had a proposition for him. When Arthur Carter sold me The Nation, made me this offer I should have refused and didn’t, and sold it to me for money I didn’t have, which I then subsequently had to raise, I went up to see Sam, and I said, “I have an idea. What if we opened our books to you, and you made us one of your famous case studies for your MBA students? And you would tell us how could we take a magazine which has lost money for 130-odd years, and turn around its economics without our changing the magazine that we put out.” Because The Nation has never been market-driven, and never will be. And when it is, it won’t be The Nation magazine, and that’s what distinguishes it as one of the few independent voices in this country. And Sam thought it was an interesting idea, but not for his MBA students, but for this group of owners, presidents, and managers. That’s how I got there in the first place.

So we haven’t changed the quality of the magazine. We’ve added some color, but that’s something that we intended to do in the ordinary course of our business. And we have reached a new high in our circulation. We reach 100,000 people. When I first got there in 1978 it was 20,000 people. We have a very sophisticated circulation direct-mail program, but we had that before I went off to the Harvard Business School.

There are some things, I guess, that I think about differently. So we have a very active outreach program. We have a radio program that’s up on 100 different public-radio stations. We have a website. And I guess it didn’t hurt that I studied the case of The Saturday Evening Post, and the case study took place during a period when they had the choice of taking the extra millions of dollars they had and either buying CBS or investing the money in a set of printing plants, and they invested it in a set of printing plants. And this, of course, was before the television business had become what it is today, and that there are people who have printing plants who make a lot of money, but the idea of investing in, thinking of asking the question, “What is your business?” and thinking of investing in your business, while it may not be print, it may be communications or information in that case, probably informed The Nation when it decided to put up its own website, which we have now. But we haven’t figured out how to make money off of our website, and it’s another way of getting out the message and information that comes, that is generated by the magazine.

HEFFNER: Victor, forgetting about Harvard for the moment, tell me: How do you think the concept of the marketplace, the whole social Darwinian ethic (you referred to that a moment ago), fares in America in 1998? Where are we?

NAVASKY: Well, I think it fares very well for the very wealthy, and not well at all for the very poor. And the rich are getting richer, and the poor are getting poorer, and the middle class is getting thinner as it gets divided between these two groups. So that the problem is that there isn’t right now an alternative on the horizon that one sees that works, and so the old welfare-state notions about how you deal with a capitalist society, to me, are very much alive although they’re not well.

HEFFNER: They’re not well. They’re not well in terms of your own examination? Or they’re not well in terms of what others around us are doing?

NAVASKY: In terms of what the political, of what has until now been politically thought to be possible. So that you have a Democratic president who got re-elected by adopting a Republican program. And at the expense of the welfare system. Now, the welfare system was an imperfect system, but poor people are the victims of the decisions that were made in that transaction. And the, you know, the ideals of the administration — universal healthcare — are ones that I share, that The Nation magazine shares. But when they attempted to put in their own jerry-built healthcare program, and it was so complicated that even those who were in favor of their values couldn’t support the program, the result was no substitution. And the, whereas right next door you have a single-payer system that, while it’s not perfect, in many ways seems to serve the people of Canada better than our lack of any system serves the people of this country.

HEFFNER: Well, let me ask a not unrelated question in the couple of minutes we have left. The Nation last year did a big issue on the matter of First Amendment considerations. And they are related to this whole matter of the free and open, unfettered marketplace of ideas and of goods. Did the fact that you brought together a good number of people who were strangely critical — and I say “strangely” because in the past they hadn’t been — of First Amendment absolutism — you brought together others too — indicate any shift in The Nation’s own editorial posture on this question?

NAVASKY: The Nation has a group of core values, and among them are free speech, respect for human dignity, belief in political and civil rights, and anti-imperial stance. And we could go down the list. It doesn’t suggest any change in the commitment to free speech. However, the framers didn’t have these multinational corporate entities, communications conglomerates to contend with when they wrote the First Amendment. And so, how you apply the Constitution to a technologically changing society is always a problem. And it’s always a question of making these difficult determinations. And right now, I think, is a period when it does pay to have a kind of debate and dialog about it, which we had.

You mentioned the Freedom Forum before. Another one of our fellows was Elie Nome, who specializes in studying these new technologies. And I remember The Nation did a special issue on the new conglomeratization of the media that Ben Bagdikian put together for us. And he wrote a book in the early 1980s saying that there were something like 27 companies that dominated the… Well, he started out by saying there were 50 companies that dominated over 50 percent of the information environment, by which he meant all of the book publishers, magazine publishers, newspaper, television, etcetera. The book was revised a few years later, and the number was down to 27. Then he did an issue for us in which he predicted that by the end of this century there would be a half-dozen. And it looks like he was right. Elie Nome said, “No, there’s more diversity now when you consider Microsoft and all this stuff.” Well, it’s important to have that debate, and we’re a forum for that debate.

HEFFNER: Good. Victor, thank you for joining me today. They said for me to say, “Goodbye.” Goodbye.

NAVASKY: Okay.

HEFFNER: And thanks too, to you in the audience. I hope you join us again next time. And if you would like a transcript of today’s program, please send $4 in check or money order to: The Open Mind, P.O. Box 7977, FDR Station, New York, NY 10150.

Meanwhile, as another old friend used to say, “Good night, and good luck.”

N.B. Every effort has been made to ensure the accuracy of this transcript. It may not, however, be a verbatim copy of the program.