Andrew Carnegie: “Wealth”

In Carnegie's day, “Wealth” proved less influential than it was controversial. A few of his contemporaries followed his lead of making charitable contributions from their fortunes with a design on opening up opportunities for the poor to achieve self-improvement. John D. Rockefeller gave away half a billion dollars in support of scientific and educational endeavors and established the Rockefeller Foundation to donate even more. Carnegie's railroad competitor Russell Sage left his fortune to his wife, who used it to back women's suffrage groups and provide money for educational opportunities in the social sciences. Yet many more intellectuals, politicians, and other industrialists said that giving away money to charitable endeavors would do nothing but corrupt the poor—essentially agreeing with Herbert Spencer and his concept of the “survival of the fittest.” To them, Carnegie's Christian sympathy with the working man's plight was simply misplaced. Even worse, Carnegie's actions themselves soon made his sympathies seem hypocritical.

In 1892, the Carnegie Steel plant at Homestead, outside Pittsburgh, was in the midst of labor strife. The Amalgamated Association of Iron and Steel Workers union's contract was about to expire and the workers agitated for material improvements in conditions and salary. Carnegie, on his way to Scotland for his annual vacation, told Henry Clay Frick, his CEO, to “take care of” the union, meaning that Carnegie wanted the strife ended on his terms. Frick took this to mean he had a free hand in handling the union, and regular telegrams from Carnegie encouraging Frick's actions in stonewalling the union convinced Frick he was doing the right thing. Frick shut the plant down when the contract terminated on June 30, 1892, locking out the workers and erecting fortifications around the works. The workers armed themselves and surrounded the fortifications, intending to keep any strikebreakers out. Frick then hired armed guards from the Pinkerton Agency to force the workers to leave. On July 6, the guards and workers fired on each other in a bloody battle for control of the plant; nine men were killed in the worst violence in American labor history to that time.

This was not what Carnegie had in mind. He blamed Frick for misunderstanding his orders; however, throughout the conflict he had telegraphed his support to Frick repeatedly. It was Carnegie whom the public blamed for the violence, and despite his determination to be seen as a responsible employer, Carnegie would never live down the battle at Homestead. When Frick attempted to take control of Carnegie Steel in 1899 and 1900, Carnegie's anger and disgust led him to reconsider his career. He ousted Frick and sold his interest in Carnegie Steel to J. P. Morgan for $480 million. By March 1901, Morgan had formed the United States Steel Corporation out of Carnegie's holdings, and Carnegie, retired at age sixty-five, was the richest man in the world.

Retirement meant that Carnegie could finally devote his fortune to fulfilling the purposes of his 1868 memo and follow through on the principled lifestyle he had outlined in “Wealth.” He had already been involved in many philanthropic projects, mostly the endowment of libraries, the building of public baths, and the donation of pipe organs to churches. Now he intended to give away his entire fortune. He built public libraries all over the United States, Canada, and Britain. He established pension funds for his former workers, built universities and funded professors and their research, and provided museums and galleries for the cultural betterment of the people of Pittsburgh, his original American home. Once he came to realize that his investments were making him profits faster than he could give away his fortune, he established the Carnegie Corporation as a philanthropic institution to give it all away after he died in 1919.

Carnegie's “Gospel of Wealth” survived along with his foundation. Henry Ford was likewise inspired to establish a number of charitable endeavors during his lifetime, but Carnegie's ideas about the betterment of his fellowman has shown the most resonance in the modern day. In the twenty-first century, figures like Bill and Melinda Gates, Michael Bloomberg, Mark Zuckerberg, the Walton family, Warren Buffett, and others have established foundations simultaneously with their business endeavors, handing out charitable donations with the same regularity that they rake in profits. Thus, Carnegie's ideas on the “Gospel of Wealth” have undoubtedly paved the way for a tradition of American philanthropy that seems likely to last well into the future.