(FORTUNE Magazine) – THE SOCIETY/COVER STORY 42 THE UPBEAT GENERATION Surprise! A FORTUNE poll says working Americans in their 20s are optimistic about their careers and financial prospects, and expect to live just as well ) as their parents. What explains their optimism? A different view of the American dream: not the accumulation of material objects, but the acquisition of intangibles -- a rich spiritual or family life, a rewarding job, the chance to help others, and the opportunity for intellectual enrichment. by Alan Deutschman

18-MONTH FORECAST 56 THE ECONOMY COMES BACK Leaving behind three years of stagnation, recession, and halting recovery, the economy is finally entering a period of recognizable expansion. Growth will continue over the next 18 months at a sustainably moderate pace. by Vivian Brownstein

62 THE WINNERS AND LOSERS Sure, it's the slowest recovery in memory. But most industries are getting at least a shot at growth and are making the best of it. A sector-by-sector analysis. by Andrew Erdman and Sally Solo

INNOVATION 81 PRODUCTS TO WATCH AT&T's Smart Phone that lets you autodial your pals and check on your bank account, the Digital Compact Cassette and recorder, and Thomson's wide-screen TV and camcorders. by Alison Sprout

CORPORATE PERFORMANCE 82 INSIDE AMERICA'S BIGGEST PRIVATE COMPANY Cargill, the grain trading dynasty, faces tumultuous change: a CEO from outside the family and a move into higher-value businesses. In a sharp break with precedent, the normally secretive managers of the second-largest diversified services company in the U.S. allow FORTUNE an extensive look inside. by Ronald Henkoff

91 COMPANIES TO WATCH By steering clear of flash-in-the-pan growth after a leveraged buyout, International House of Pancakes has increased sales and maintained quality in its franchises. by Richard S. Teitelbaum

Also: The Money Store and Lifetime Hoan.

EXECUTIVE LIFE 92 WHAT FREQUENT FLIERS KNOW They don't check luggage, of course, and they choose mind control over sleeping pills. They also have informed tastes in airlines, especially those that upgrade you to first class. by Faye Rice

EUROPE 96 'THEM' Fleeing war, poverty, and repression, immigrants are flooding a Europe grown increasingly intolerant -- and derailing the drive toward the unified market that multinational companies have been banking on. Closer political union among the 12 members of the EC now looks tenuous. An immigration policy is badly needed. by Carla Rapoport

TECHNOLOGY 100 THE RACE FOR A RARE CANCER DRUG Taxol comes from a scarce tree and costs the earth to make. Bristol-Myers Squibb has already poured $100 million into developing it, but smaller outfits are right behind. by Gene Bylinsky

105 TECHNOLOGY TO WATCH Interactive television lets you match wits with other fans calling a basketball player's next move -- and maybe even advise a President Perot on policy. by Gene Bylinsky

COMPETITION 106 A BILLIONAIRE'S GLOBAL STRATEGY Li Ka-shing, the richest man in Hong Kong, is shopping for bargains in the West. He's got a lot of cash, and he is investing in real estate, cellular phones, even show business. by Louis Kraar

DEPARTMENTS 4 EDITOR'S DESK How FORTUNE got Cargill's go-ahead for a comprehensive corporate profile of the enormous multinational. Also: Which twin is the taxol?

8 INDEX 12 NEWS/TRENDS Signs of life in the Northeast, Japan sweats a Ross Perot presidency, a surprising PC gender gap, hip families drive a Detroit hit, and free trade as whipping boy. Also: The wrong way to cut CEO pay, why Japan still loves Ray , Josephs, Merrill Lynch plans lower fees, and Washington adds to the Fannie Mae family.

29 PERSONAL INVESTING Looking for more than the skimpy returns from bank CDs and money market funds? Go for safety with some sizzle. Here's a guide to mutual funds for the fainthearted. by Susan E. Kuhn

Also: Are environmental stocks about to sprout? and Portfolio Talk with Robert Farrell, chief market analyst at Merrill Lynch.

36 LETTERS TO FORTUNE

110 FORTUNE PEOPLE Where the toughest bosses end up: From Frank Lorenzo to Donald Rumsfeld, those chief executives sometimes identified as ''mean bastards'' aren't retiring. They're offering others the benefit of their experience. by Laurie Kretchmar

111 KEEPING UP A radical with clout, bankers on the hot seat, more news about spineless animals, what pollsters know about Ross Perot (ask Mr. Statistics), and other matters. by Daniel Seligman

ABOVE: Jim and Kim Malin at home in Wyoming with daughters Maggie and Katie. Photo by Karen Kuehn (Matrix).

COVER: Konyk, photographed by Alan Levenson, exemplifies his generation's sense of freedom.