Carnegie, Andrew (1835–1919)

ANDREW CARNEGIE ROSE from poverty to become an industrial magnate as well as a prolific and influential writer. His writings celebrated individualism, democracy, competition, and economic growth, while challenging the wealthy to practice a philanthropy that would elevate humankind.

When Carnegie immigrated to the United States from Scotland at age 13, poverty compelled him to work as a bobbin boy in a cotton factory. Making opportunities for himself, working hard, and learning quickly, he rose to become superintendent of the Pennsylvania Railroad's western division by age 24. Desiring greater autonomy, Carnegie left the railroad in 1865 to run his own enterprises. By the end of his career, the vertically integrated Carnegie Steel Company was the world's largest steel producer

Carnegie owed his incredible business success to a strategy of relentlessly cutting costs, reinvesting profits, constantly rationalizing production via scientific research, and buying out financially strapped competitors during business downturns. He was a master at organization and at finding, rewarding, and keeping the best talent as his business partners. In 1901 he sold his interests to J.P. Morgan's syndicate for $300 million, making himself one of the world's richest men. Thereafter he turned his attention to distributing his wealth and promoting international peace.

The voluble and eloquent Carnegie became the pe-riod's self-appointed spokesman for capitalism and democracy. Although he had only four years of formal education, between 1882 and 1916 he wrote 63 articles and eight books, and had 10 of his major public addresses published as pamphlets. Carnegie stood for a meritocracy in which, with integrity, thrift, self-reliance, and hard work, any man and his family could ascend the economic ladder—an optimistic creed that many Americans eagerly accepted.

His general thesis was that America's democratic institutions and the economic and social freedoms they encouraged were responsible for its ascendance over monarchical Europe and its progress in reducing poverty.

Andrew Carnegie dismissed complaints that the American economy had made the rich richer and the poor poorer.

Citing statistical evidence (with which modern economic historians concur), Carnegie dismissed complaints by populists and socialists that the American economy had made the rich richer and the poor poorer. Although he admitted that income inequality had increased, he concluded, “much better this great irregularity than universal squalor,” admonishing that the “poor enjoy what the rich could not before afford. What were the luxuries have become the necessaries of life.”

To cure poverty, he championed the era's relatively laissez-faire economic policies and the ameliorative power of competition, to which “we owe our wonderful material development.” He acknowledged that the growing economic and social distance between rich business owners and poor workers was breeding mutual distrust, but argued that the interests of capital and labor were not in conflict. In his most influential essay, “The Gospel of Wealth” (1889), he warned the wealthy [Page 126]against spoiling their heirs with large inheritances—“I would as soon leave to my son a curse as the almighty dollar”—and supported an inheritance tax as a goad to force the wealthy to give away their riches during their lifetimes, because “the man who dies rich dies disgraced.” He identified the “duty of the man of wealth: to set an example of modest, unostentatious living, shunning display or extravagance; to provide moderately for the legitimate wants of those dependent upon him; and after doing so, to consider all surplus revenues which come to him simply as trust funds, which he is called upon to administer, and strictly bound as a matter of duty to administer in the manner which, in his judgment, is best calculated to produce the most beneficial results for the community—the man of wealth thus becoming the trustee and agent for his poorer brethren, bringing to their service his superior wisdom, experience, and ability to administer, doing for them better than they would or could do for themselves.”

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