On the cover of the first Australian edition of Vice, a free street magazine published about once a month, a bloodied rat lay dead on a metal floor. Inside were lots of cool ads – for Pants General Co, Zoo York, K-Swiss, freedom.of.choice and Asahi beer – aimed at the cashed-up youth market. The content came mostly from Vice’s New York parent edition and included “The Vice Guide to Eating Pussy” and “The Day I Joined the Ku Klux Klan”. It was another article – “Hooray for Hate: Why ‘Tolerance’ Has Become Intolerable” – that really stood out.

“Hate does a lot more good than its supposed counterpart,” wrote its author, Gavin McInnes, one of Vice’s founders. “The warm and fuzzy stupidity of ‘tolerance’ is a refuge for dull-witted bullies too lazy to think for themselves, or too cowardly to call a spade a spade … All we know is we hate people that hate hate and we have no tolerance for the intolerance of intolerance.” Most striking, apart from the subject matter and philosophy, was McInnes’s forcefulness and his use of the word “we”. Immediately he was gathering to his bosom all those who sought refuge there.

In the two years since then Vice has published “The Education Issue”, “The Hate Issue”, “The Mental Health Issue”, “The Design Issue” and “The Sex Issue” which, in an article headlined “Hot Muslim Twat”, stated that: “Perhaps the most significant cultural fallout of September 11 2001 was the dawning realisation that we can no longer ignore the Muslim world and must somehow find it in our hearts to jerk off to their women … Lift the burqa, baby. I want to see what you got under there.”

The magazine’s overall thrust is most succinctly captured in a regular section of photos and captions called “Dos and Don’ts”. It runs for up to a dozen pages each issue and features a variety of people – some celebrities, others unknown – in everyday situations. Beneath a photo of a middle-aged man, the caption reads: “Fuck the baldies. They are old. They represent everything we hate. They represent selling out, settling down, not taking chances and not being free. If you see a bald person tell him to fuck off and make sure he gets out of here.”

Beneath an Asian woman: “Holy shit could this ball of rice be any more put together?”

Beneath two drunk and passed-out Russian immigrants drinking American beer: “Booze is the hardest part of assimilation and these niggas just don’t got the enzymes.”

Beneath a man with one hand, sleeping in the street with a rubbish bag for a pillow: “Hey stumpy, what are you, human garbage? … Ha, ha, what a drunk homeless person.”

Beneath another street person: “Good morning douchebag … I’m way more fortunate than you and that is why I am laughing my head off and taking pictures of your sorry ass. Ha ha.”

Beneath a woman with blood trickling from her nose and mouth: “If he hits you, you have to understand that you were probably being lippy and he’s only trying to make sure that it doesn’t happen again. Don’t cry about it. Be happy that he cares.” Flicking through, it felt like I, the reader, was being embraced as one of the OK people while we laugh at and condemn the un-OK people.

In Melbourne you can find Vice – so long as you get in quick – sitting on the counters of fashion stores, CD shops, cafes and bars in the city’s groovier bohemian parts. Walking up Brunswick Street, Fitzroy, almost everyone knew Vice. I was told it was “satirical”, “titillating”, “cutting-edge”, “pushing the limits”, “political: left-leaning” and “irreverent”. But there wasn’t a copy to be seen. “It’s very popular,” I was assured at Polyester Records. “We take two boxes [around 400 copies] and they’re gone in two days.”

Something’s happening here, I thought.

On Chapel Street, Prahran, it was the same story: everyone knew about it but no one had one. “It’s the quickest of the street press to go,” the proprietor of Evolve (skateboards and streetwear) told me. At Fat (fashion) the sales assistant knew plenty about it; not only do they stock it, they advertise in it. “I do find it offensive,” he acknowledged. Then he said: “Yeah, I love it.” Nearby Phillips (fashion) never stocks Vice, and the sales assistant there wasn’t a fan. She knew it well and had even been to one of the parties Vice regularly stages around Melbourne. “There’s a set,” she explained. “They think they’re underground cool. They’re wannabe cool. They’re very arrogant. A lot from the fashion industry. They love Vice but they don’t know what’s in it. They don’t actually read it.”

A few minutes later, at The Vodka Bar, one of the waitresses said she didn’t think it was offensive. “Do you find The Simpsons offensive?” she asked me, bemused. She thought Vice readers were probably “left-wingers”. She’d be happier, she said, if her little sister read Vice rather than the teenage girlie magazines because of the way they cover body-image issues. For others, the content was irrelevant. “It gets kids into the shop,” one sales assistant said. “They can make up their own minds.”

To make up your own mind, though, or to see Vice as satirical or ironic, requires a sophisticated understanding of the issues it talks about – plus a huge leap of faith. It’s like The Simpsons episode where the worn-out teen says: “Are you being sarcastic, dude? I can’t tell anymore.”

Next day I went off again to Bridge Road, Richmond. I still couldn’t find a copy. Once again Vice was well-known and highly regarded by the young shop assistants. “It’s cool,” one bloke said. “It’s certainly out there. My mates all read it. They get a laugh. And it’s free. Anything free, kids pick up.” At Melbourne Sports Depot a sales assistant in his early twenties told me: “It says what everyone’s thinking. They’ve just got the guts to say it.”

At Farrago, the Melbourne University student paper, they too know all about Vice. One of the editors, Clare Chandler, published a critique of it last year in a magazine called Bizarro Farrago, which she and some friends set up in response to the right-wing sentiment of that year’s official Farrago. On the strength of Bizarro, her team was elected and now produces this year’s official magazine. Rosie Overell, the 21-year-old arts student who wrote the Vice critique, says: “What [McInnes] is doing is trying to push neo-conservatism through the guise of being hip.”

McInnes is happy to acknowledge this, though not to his Vice readers. In a piece published in The American Conservative magazine he says that although only a small number of his readers think of themselves as conservative, reaction to Vice’s more right-wing reporting has changed. “A new group [is] emerging,” McInnes wrote, “and the vitriolic ‘you dudes are all Nazis’ letters [are] being replaced by ones saying ‘you dudes are finally telling the truth’.”

Rosie cannot hide the disappointment in her voice when she says: “A lot of young people share these ideas. Even uni students.”