Steve Forbes: The agitator working to deliver Forbes to the fourth generation

The Presidential challenger is now focused on running his publishing empire in the new world, says Stephen Foley

In essence, my grandfather was a blogger." So says Steve Forbes, third generation of the great publishing dynasty whose eponymous magazine has been the capitalist's bible now for 92 years, dispensing fortnightly sermons on how to accumulate wealth, and incanting its lists of those who have accumulated most of all.

BC Forbes was a columnist for the Hearst group of newspapers when he hit upon the idea of a publication "devoted to doers and doings" in 1917, and he still dominates the magazine's boardroom today, by way of an austere portrait. "Being a good Scotsman, he hated the idea of not being able to use all the material he gathered," his grandson says. "That was one of the reasons he started Forbes magazine. He loved to write, and he wanted an outlet for his material."

We are harking back to these early days of the Forbes family's entrepreneurial journalism because these are convulsive times for journalism, as the internet upends readers' habits and the recession has wiped out great swaths of advertising income. Writers fear for their jobs (more than 100 have been laid off at Forbes); editors cast about for ways to promote stories above the din of the web; owners watch the value of their businesses diminishing before their eyes.

But Steve Forbes is not in the slightest bit gloomy. A two-time candidate for the Republican presidential nomination in the US, he is the arch free-marketeer, secure in the knowledge that all destruction is creative. But it is more than ideological. We are feeling our way, he says, towards a landscape that is not impoverished, as some fear, but in fact is richer in journalism than before. In other words, we are all BC Forbes now.

"Everyone is a reporter these days," he says. "When the plane crashed in the Hudson, where were the first pictures coming from, the first words coming from? People on the scene. Boom: 140 characters, get the word out. It's a different world, but one that probably young people will be more comfortable in. The only question is how do you bring it together so that it meets the needs and wants of particular groups of people and constituencies?"

Having merged the online and magazine staff over the past year, Forbes.com is now experimenting with potential ways to make money from online content. Mr Forbes is sceptical about charging for the day-by-day business journalism ("it's like bread and butter in a restaurant, you don't expect to be charged for it") but he has had some success with special sponsored events, online conferences for groups such as financial advisers, which might attract just 1,500 "attendees", but for whom advertisers are willing to pay a big premium.

Communities of readers and reporters will form around media brands, he predicts. Specialist publications will be able to charge a narrow audience for their work. Longer, investigative work will be funded largely by charitable foundations or think-tanks. Magazines in physical form will endure, more certainly than newspapers, because they offer an at-your-leisure read, he says. And the Forbes brand, of course, is strong.

It is hard to think of another publication so tied together with the identity and philosophy of one family and, these days, one man. Steve Forbes initially set up his own magazine, Business Today, as a student at Princeton University, but he was preordained to run the family heirloom and has been Forbes editor-in-chief since his father's death in 1990.

He is a shyer, less bombastic incarnation of the dynasty, often described as awkward in social situations, but he is charming, one on one. He has a gift for metaphors, which pop into almost every sentence, and which he is fastidious about not mixing. We meet in the Forbes boardroom, decorated – as if to illustrate the magazine's singular focus on wealth – with photographs of all the family homes, including Old Battersea House in London, a bargain snapped up in 1970 by Mr Forbes' late father, Malcolm, when the neighbourhood was less than salubrious. Recently, though, reflecting the straitened times and the falling value of the magazine, there have been more sales than purchases; the family yacht, The Highlander, was mothballed at the start of the year, and a collection of Victorian art from Battersea went under the hammer in the summer. The bonfire of billionaires' fortunes, described in the magazine's regular rich lists, has not entirely spared the Forbes family.

At the height of the financial panic last year, Mr Forbes himself appeared on the front cover to optimistically explain "How Capitalism Will Save Us". The market chaos had been caused not by the free market, he argued, but because markets were not free enough. Too much cheap money pumped in by the Federal Reserve and policy mistakes by government were his villains; tax cuts and the entrepreneurial grit of the American people would be saviours. (It is a theme he has extended in an uncompromising book of the same title, just published, which acts as a kind of dinner-party defence manual for Republicans who want to argue in favour of free-market capitalism.)

"The reaction was fairly positive, even from those who might not have agreed with either the diagnosis or the prescription, but at least someone was trying with a clear voice to make sense of the chaos around them, and that's what publications should be doing. Never before in my life have I seen the financial system almost collapse, go into cardiac arrest."

At the time, Mr Forbes was acting as an economic adviser to John McCain's presidential campaign. As for whether he might fund a third presidential bid of his own, and make another attempt to bring a flat tax to the US, Mr Forbes barks a "No" before the question is even half- spoken. "I'm an agitator now, I just stir the pot."

And he's certainly agitated. The Obama administration's response to the economic crisis has been plain wrong, he says. Government spending to stimulate the economy and a policy of benign neglect towards the dollar will do major harm in the long run.

He has a template in mind for what should be happening instead, a lesson taken from one of the books currently on his Kindle e-reader, an economic history treatise nestled in amongst the mystery novels of Robert Parker and Jonathan Kellerman that are his air-travel treats. "People don't realise we had a depression in 1920-21 when the Fed tightened up because of the post-war inflation," he says. "The first year of the thing was worse than the first year of the Great Depression, but the response of the government was to cut spending and to cut taxes and within 12 months we were out of it." He chuckles. "No stimulus packages. You could do worse than following that template, and we are."

If the US is going off down the wrong track, at least Mr Forbes is confident about the family business. His daughter, Moira, is publisher of Forbes Woman, and his nephew Miguel works on overseas licensing deals. "We'll see if others are interested," he says with a smile. "We call it G4. We are the third generation, so they will be G4. It's coming along."

Forbes in brief: From business to politics

Born 18 July 1947, in Morristown, New Jersey

Title President and chief executive of Forbes Inc, and editor-in-chief of Forbes magazine.

Family Son of publishing mogul Malcolm Forbes. Married with five daughters.

Education Undergraduate degree in history from Princeton University.

Politics Appointed by Ronald Reagan to chair the Board for International Broadcasting, broadcasting radio behind the Iron Curtain. Sought the Republican nomination for the presidency in 1996 and 2000.