Carnegie, Andrew (1835–1919)

A Leading Paradox

Paradoxes defined Carnegie's life. Born in Dunfermline, Scotland, the child of parents thrown into unemployment because of industrial technology, Carnegie exemplifies the prepotency and efficacy of industrial innovation. The quintessential symbol of U.S. rags-to-riches folklore, he was also an elite business entrepreneur who personified the unprecedented power of big business. Having created one of the most powerful vertically integrated companies in the world, he nonetheless criticized the protective tariff and corporate trusts, championing instead competition and the limited partnership form of business organization. Innovative in bureaucratic management systems, he developed an unrivaled method of systematic cost accounting, which he oversaw personally. Ironically, when the financier J. P. Morgan (1873–1913) challenged Carnegie's steel empire, Carnegie opted to sell the enterprise to his rival for $480 million (worth about $10.1 billion in 2002 dollars but equivalent to an astounding $238 billion to equal the same percentage of GDP), effectively making him, as Morgan dubbed him, “the richest man in the world.” Though he respected select Judeo-Christian values, he was not religious. Rather, he “came fortunately upon Darwin's and Spencer's works,” which inspired him to get “rid of theology and the supernatural” in favor of “the truth of evolution” (Carnegie 1986, 327). Social Darwinism's doctrines of extreme individualism and devotion to survival of the fittest helped him justify his hard-nosed acquisition of wealth, his merciless industrial competition, and his heavy-handed treatment of his workers. Nevertheless, in his controversial “true Gospel concerning Wealth” Carnegie emphasized—to the disdain of his wealthy peers—that the rich were morally obligated to practice bountiful and altruistic philanthropy, for “the man who dies thus rich dies disgraced” (Carnegie 1889a, 664). To this end, he engaged in unprecedented philanthropy toward educational institutions and public libraries and in support of medical research and world peace.

While the Vanderbilts, Rockefellers, Morgans, and others passed unprecedented fortunes from one generation to the next, the renegade Carnegie argued for an inheritance tax, and, even more radically, that the wealthy should not burden their children with great fortunes, as “great sums bequeathed oftener work more for the injury than for the good of the recipients” (Carnegie 1889a, 658). While his wealthy peers conspicuously championed what his contemporary, the economist Thorstein Veblen (1857–1929), disdainfully called “conspicuous consumption,” Carnegie called for “modest, unostentatious living, shunning display or extravagance” (Carnegie 1889a, 661). Nevertheless, Carnegie had a magnificent mansion in New York City (now the Cooper-Hewitt National Design Museum), the Skibo Castle in northern Scotland, and a hundred-room summer home in Lenox, Massachusetts. Optimistic, combative, supremely self-confident, even arrogant, Carnegie also had times of crisis of conscience and self-doubt, harboring a strong need to be found exceptional, to be noticed. Loyal to friends, he still found it difficult to share power.

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