Andrew Carnegie: “Wealth”

Andrew Carnegie was born on November 25, 1835, in Dunfermline, Scotland. He and his family sailed to the United States in 1848 and moved to the area outside Pittsburgh, where Carnegie became a messenger boy for the O'Reilly Telegraph Company in 1849. After he taught himself Morse code, he graduated to becoming a telegraph operator. Finally, he caught the eye of Thomas Scott, a superintendent for the Pennsylvania Railroad's Pittsburgh division. Carnegie became his private secretary and telegraph operator, while Scott became Carnegie's mentor. Scott taught him to invest his $35-a-week salary in stocks; when the stocks paid off in a dividend, Carnegie was hooked. It was the first money he had ever made without working for it—rather, his intelligence and Scott's advice had earned him a profit. From then on, Carnegie's future plotted itself out in finance, ownership, and investment, as opposed to physical labor.

By 1859 Carnegie had replaced Scott as the superintendent of the Pittsburgh division. Through shrewd investments, he was able to quit the railroad after the Civil War ended to concentrate on building his financial portfolio in the oil industry, bonds, ironworks, and bridge building. In 1868, however, right as he became a well-known figure in the industrial world, Carnegie wrote himself a remarkable memorandum, one that he would save for the rest of his life. In it, he said, “Thirty-three and an income of 50,000$ per annum. By this time two years I can so arrange all my business . . . as to make no effort to increase fortune, but spend the surplus each year for benevolent purposes. Cast aside business forever except for others.”

In the memo, Carnegie plotted out the purposes of his fortune for the rest of his life. As he saw it, the goal of having all this money was to get an education, cultivate intellectual friendships, take care of the poor, and generally “choose that life which will be the most elevating in its character.” He considered his own pursuit of money the worst sort of idolatry and intended to give it up soon because it “must degrade me beyond hope of permanent recovery.” His intention was to quit working in 1870 at age thirty-five; like many things he wrote in the memo, he would not do that. Yet he would save the memo for a reason, and its sentiments, if not its actual dictates, would determine his goals from that time onward.

Like many of the robber baron industrialists of his era, Carnegie focused his investments on controlling every aspect of the building of the railroads on which he made his fortune. In 1872, he learned about the new Bessemer steelmaking process and decided that steel would replace iron as the construction material of the future. Thus began the Carnegie Steel Company, the company that made him famous. His policy was to pursue what he called “verticality”: to control the process of making steel, he wanted to control the iron ore mines, the plants that produced steel, the railroads that used steel rails, the companies that made railroad engines, the products that rolled on the rails, and anything else that contributed either to the making of steel or to its utility as a product. By 1889, at the time when his two essays were first published, Carnegie Steel had bought up a number of its Pittsburgh-centered rivals, and the company was earning $4.5 million in annual profits.

Despite his lack of formal education, Carnegie was a learned man, reading voraciously and using his wealth as an opening to intellectual and political society. He counted many of the leading British political and religious figures of the late nineteenth century as his friends, including Prime Minister William Gladstone, philosopher and educator Matthew Arnold, journalist W. T. Stead, and novelist Rudyard Kipling. Over the course of his life, he himself produced eight books and numerous journal articles on varied subjects, all of which he covered with intelligence and erudition. Triumphant Democracy (1886), in which Carnegie compared the functions of American democracy favorably to the parliamentary system and national strife in British politics, sold seventy thousand copies. Carnegie was not just wealthy—he was influential.

The philosopher Carnegie most admired was Herbert Spencer, a man who considered Carnegie one of his best American friends. Spencer was the original social Darwinist, a thinker who adapted Charles Darwin's theory of evolution to the development of human society. He believed that in a properly operating capitalist society, certain people were better designed to rise to the top of that society and accumulate wealth. Upon meeting each other, Spencer informed Carnegie that Carnegie was the best example of Spencer's ideas that existed. To a man like Carnegie, who was troubled by the accumulation of wealth, such words were, as he put it in his autobiography, “my true source of comfort.” Carnegie did not let this idea go; he intended to use it.