Andrew Carnegie: “Wealth”

Carnegie states his thesis immediately: “The problem of our age is the proper administration of wealth, so that the ties of brotherhood may still bind together the rich and poor in harmonious relationship.” His example of how far Western civilization has advanced since that time is a comparison with the Sioux peoples, then housed on a miserable reservation near Wounded Knee, South Dakota. Certainly, in their poverty they were all equals, from the chiefs to the lowest members of the tribe. A year later, in 1890, many of the Sioux would be massacred by US soldiers in fear of the Ghost Dance movement, a provocative but peaceful religious sect that awaited the disappearance of all white men from North America. This might not have been the best comparison Carnegie could make between societies that distribute wealth well and those that do not.

Nevertheless, Carnegie's point is that wealth and wealthy people are constructive for the whole of society, so long as the benefits of their wealth are made available to all. He calls on the memory of “Maecenas”—Gaius Cilnius Maecenas, a Roman aristocrat and soldier who patronized poets like Horace and Virgil and made them well known to Roman society. Carnegie sees this as the purpose of wealth: to uplift the society in which it is accumulated.

Often, Carnegie simply updates the arguments in Adam Smith's Wealth of Nations (1776), the foundational text of capitalism. Smith argues that those who succeed at business employ others to make more products and expand their profits and improve their products to be competitive, thus benefiting society as a whole. Carnegie notes, “It insures the survival of the fittest in every department. . . . It is a law, as certain as any of the others named, that men possessed of this peculiar talent for affairs, under the free play of economic forces, must, of necessity, soon be in receipt of more revenue than can be judiciously expended upon themselves; and this law is as beneficial for the race as the others.” As a result, he is able to dismiss the idea that socialism, anarchy, or communism is a better way to organize society. To do otherwise—to organize a society that looks like the eighteenth-century philosopher Emanuel Swedenborg's conception of heaven as a place where all angels work for each other—is to overthrow society and human nature itself.

Carnegie refers often to the perceived inadequacies of socialism and communism to solve the problems of poverty. In 1889, when he wrote “Wealth,” socialism, though not of the Marxist variety, was becoming popular in the United States and Britain. In the United States, farmers had organized into a series of political units that would later become the Populist Party; among other issues, they advocated for public ownership of railroads and an income tax, both perceived as ways of redistributing wealth to the poor. In Britain, the Fabian Socialists called for workers' ownership of the means of production and state-sponsored efforts to redistribute wealth from rich to poor. Such movements alarmed Carnegie because he believed they were misguided efforts to improve society that would instead result in its impoverishment, as he repeats all through the essay. To Carnegie, Spencer's teachings argued that a society organized properly along the lines of social Darwinism would be naturally capitalist.

Thus, Carnegie asks: “What is the proper mode of administering wealth after the laws upon which civilization is founded have thrown it into the hands of the few?” To Carnegie, there are three ways—to give it all to relatives after one's death, to bequeath it for public uses, or to distribute it oneself before one dies. The first method is that of aristocrats and monarchs, who simply hoarded their wealth in land and ended up left behind in the growth of capitalism. Waiting until death to distribute wealth means that a rich man is essentially sitting on resources that could better his community and gives Carnegie the impression that “men who leave vast sums in this way may fairly be thought men who would not have left it at all, had they been able to take it with them”—a rather damning indictment of such men's motivations. Carnegie even approved of estate taxes as a method of forcing contributions of wealth on the rich.

In Carnegie's opinion, the only proper way to administer wealth was in one's own lifetime. The purpose of wealth was to use it in a fashion that would allow others to discover their own design, to permit people to achieve the best that they could with their own lives. Those among society's self-starters should get the opportunity to use the tools that a rich man's wealth could provide them in health, education, taste, and moral uplift. As such, they would work and earn their way into comfort and perhaps wealth themselves, and society's riches would be better distributed. He provides two examples—of the donation of the American industrialist Peter Cooper to create the Cooper Union for the Advancement of Science and Art in New York City and of former New York governor Samuel Tilden's bequeath of $5 million to the city of New York to found a public library.

Carnegie starts his conclusion by asserting that wealthy people need not be Christ-like to be good; the example he uses is of Leo Tolstoy, the most famous Russian novelist of the day. Like Carnegie, Tolstoy took a personal vow to give away all of the wealth he had received from the profits of his novels and his aristocratic lifestyle; unlike Carnegie, he believed that the proper way to do this was to live a life of poverty as Jesus had. Carnegie's entire point is that the wealthy need to do what they do best—get rich—in order to better their fellowman: one needs to work for riches in order to give them away. Rather the man of wealth should live a modest lifestyle, take care of his family's needs and comforts, and give away the rest of his profits to intelligent public uses, to the approval and betterment of the community in which he lives.

The key element in giving away wealth is to do it intelligently. As examples here, Carnegie holds up Peter Cooper of the Cooper Union (again); Enoch Pratt, who gave funds to build a free library in Baltimore; Charles Pratt (no relation), who established the Pratt Institute in Brooklyn—an educational body similar to the Cooper Union—and Leland Stanford, founder of Stanford University. In another article published in the North American Review, Carnegie gave readers a list of “the best fields of philanthropy,” of which there were seven. At the top were universities and scientific research institutions, libraries (Carnegie's favorite, due to his background), hospitals and medical schools, parks, concert halls, public baths, and churches.

To Carnegie, these men and others like them are the hope of humanity in the Western world. They know what to do with their wealth and when to do it. Should more follow their example, the world would be a better place. Should they not, Carnegie indicts them with this famous statement: “The man who dies thus rich dies disgraced.” Such is, as he terms it in the end, “the true Gospel concerning Wealth.”