KEY POINTS:
John Micklethwait's office, high above the rooftops and church spires of London's Mayfair, looks much as you might expect. The erudite editor of The Economist, who took up the post on April fool's day last year (yes, really), sits behind a sturdy desk in a sparsely furnished room, with mementos and trinkets arranged on the shelves behind it - including a cartoon of President Bush being buffeted by the ill winds of Hurricane Katrina.
Also there, inevitably, is a tiny bust of Adam Smith, the 18th-century economist whose "invisible hand" guides the title's pronouncements on everything from the success of Google to the American invasion of Iraq.
His celebrated works provide an intellectual touchstone rather than a fully-formed ideology, says Micklethwait, 45, an Oxford graduate who succeeded Bill Emmott as editor.
But it is still tempting to imagine The Economist's 20 or so London-based writers bowing reverentially before the Scotsman's image as they file in for weekly editorial meetings at the newspaper, as it still insists on calling itself.
The Economist's recent commercial success and stellar circulation growth would be the envy of any title. Like its rival British-based periodicals, The Spectator and the New Statesman, it sold between 50,000 and 70,000 copies a week until the late seventies when global expansion catapulted it into a different league. It now shifts more than 1.2 million copies in 201 countries and the business made a pre-tax profit of £49 million ($131 million), a 59 per cent rise.
So much for the effect of the internet and the corresponding decline of the printed word.
"A hurricane hit newspapers," says Micklethwait, who admits he assumed when he ascended the editor's chair that it must go on to hit magazines as well.
"But there seem to be products - mostly Sunday newspapers and magazines - that even young people still want to pick up. The print version of The Economist didn't seem to be as immediately threatened as we first thought."
Last month, the title unveiled a new marketing push, ditching its distinctive series of advertisements (typical example: "It's lonely at the top; but at least there's something to read") in favour of a less haughty campaign designed to emphasise that it is far more than a business title.
There are other innovations, too, including the launch of a glossy new monthly spin-off (it was previously a quarterly) called Intelligent Life, an attempt to provide Economist readers with "lifestyle" journalism without dumbing down.
Perhaps more importantly, it also gives luxury goods groups a chance to reach a big audience by advertising in a format they are comfortable with.
Micklethwait has introduced a financial column, Buttonwood, in the title proper to complement those on UK, US and EU politics.
There have been online innovations, too, with a year's content freely available at economist.com and audio versions of the title (call them podcasts if you really must) frequently at the top of the iTunes chart, a surprise hit if ever there was one.
"It may not make sense in London or Manhattan but in places like California, where most people drive to work, it does," Micklethwait says.
Most of The Economist's rivals, including The Financial Times and the The Wall Street Journal, are moving in the same direction, calculating that the day when online advertising revenues will cover the cost of giving away content is fast approaching.
Economist.com was profitable, Micklethwait said, although it might not be if the contributions of staff paid by the print edition were removed. The internet version includes blogs, but there are still no bylines - a phenomenon unique to The Economist and one which Micklethwait concedes is, to a large extent, "a branding decision".
He claims that of the potential recruits he's approached, only one journalist felt aggrieved at the prospect of embracing anonymity; the policy, he argues, reflects the fact the title is a genuinely collaborative effort.
"If we disagree with a piece we might change it, so would it be fair to keep the same byline on it? Probably not."
The Economist's one-size-fits-all editorial stance, which recommends a dose of liberal economic measures as a remedy for almost every ill, gives it global clout but makes it many ideological enemies. But Micklethwait emphasises that the title's "liberalism" is a reference point and says it has never claimed it is a panacea.
He defines the creed as liberal (for which read free market) economics combined with liberal social values.
While that tradition is well understood in Britain, that is not always the case abroad, he says, and many of its leading exponents, including Nicolas Sarkozy, rarely administer the medicine undiluted. The French President's labour market reforms are overshadowed by protectionism and support for state industries.
Even in the UK, he says, political parties "including the Liberal Democrats, tend to jettison either the economic or the social arm of liberalism" and it is difficult to find any party which pushes the liberal agenda as The Economist defines it.
One of the magazine's tenets is the primacy of the market but, when we meet, the collapse of American sub-prime mortgages had already set the financial world reeling and, although the extent of the crisis was not yet clear, Micklethwait identified the main problem as one of uncertainty - no one knew exactly which organisations were most exposed to the sector, or the extent.
Speaking again this month, after the Northern Rock crisis and a spate of profit warnings from many of the world's biggest investment banks, Micklethwait says he now believes it is likely to be serious.
"There is still a debate about how deep the credit crunch will bite but most of the evidence looks bad."
More transparency would be helpful, he says, but his confidence in the financial system has not been shaken. That is hardly surprising, but the title is more idiosyncratic than you might expect. It has little time for Bush's neo-conservatives - Micklethwait is privately scathing about the American President - and even less for the evangelical right (on which he has co-authored a book).
"There is a difference between libertarianism and liberalism," he says, pointing out that The Economist has argued for state-sponsored healthcare in the US to address "market failure", a stance that has not endeared it to the American right.
But the title has continued to support the war in Iraq and it will remain at the forefront of the battle of ideas for as long as there are causes left to fight, Micklethwait says.
"Liberalism is spreading and the spread of individual freedom and democracy is increasing. But it is not a message that is universally accepted - and it is still a battle worth fighting."
Promoting free trade as a civilising and moral force
Before becoming editor John Micklethwait edited the US section for 10 years from 1996.
He ran the New York bureau for two years after four years as the editor of the title's business section. He set up The Economist's Los Angeles office in the early 1990s.
The Economist was founded in 1843 and is part owned by Financial Times owner Pearson, although it is run by an independent trust.
Under the title's constitution, no organisation or individual is allowed to buy a controlling stake in the group.
The paper claims to remain true to the principles of its founder, James Wilson, who was a disciple of Scottish economist Adam Smith and championed free trade: "We seriously believe that free trade, free intercourse, will do more than any other visible agent to extend civilisation and morality throughout the world."
Walter Bagehot, who edited the paper from 1861 to 1877, broadened the publication to include politics.
The Economist now covers science, technology and the arts as well as news, business and economics.
- Observer
