Andrew Carnegie

Andrew Carnegie may be the most influential philanthropist in American history. The scale of his giving is almost without peer: adjusted for inflation, his donations exceed those of virtually everyone else in the nation’s history. The magnitude of his accomplishments is likewise historic: he built some 2,811 lending libraries around the globe, founded what became one of the world’s great research universities, endowed one of the nation’s most significant grantmakers, and established charitable organizations that are still active nearly a century after his death. And, perhaps uniquely among businessmen, the quality of his writing has ensured that his thoughts on philanthropy have been continuously in print for more than a century, and remain widely read and studied to this day.

Carnegie was born in 1835 in Scotland, one of two sons of a linen weaver and his wife. Advances in looming technology rendered his father’s occupation obsolete, threatening the family with dire poverty. Seeking a better future, in 1848 the Carnegies borrowed money to go to the United States. They settled near Pittsburgh, where young Andrew began an extraordinary rags-to-riches business career.

Starting as a “bobbin boy” in a cotton mill for a weekly salary of $1.20, he advanced rapidly, eventually becoming a manager with the Pennsylvania Railroad Company. There Carnegie came to appreciate the importance of iron and steel for the future of the American economy and shifted his efforts toward producing them.

Carnegie had consummate—some might say ruthless—financial and organizational skills, as well as an unremitting appetite for cost-efficiencies and a keen eye for innovations (most notably the Bessemer process, the first industrial method for converting pig iron to steel). He consolidated several smaller manufacturers and mines to create the largest maker of steel and iron products in the world. In 1901, Carnegie sold his business to financier J. Pierpont Morgan for nearly $500 million. His stake was nearly half the total. Thus did the poor son of a laboring immigrant become one of the wealthiest individuals in American history.

As his fortune increased, Carnegie established himself as an international celebrity. He came to associate with the most eminent political, financial, and intellectual figures of the time, both in the United States and abroad. Especially after moving to New York City in 1870, he became a patron of numerous schools, museums, libraries, and churches on both sides of the Atlantic. (Though not religious himself, Carnegie adored the hymnody of his youth, and provided some 7,500 organs, free of charge, to congregations around the world.) By the time he died in 1919, he is believed to have given away over $350 million.

Carnegie is best known for the nearly 3,000 public libraries he helped build. As a young man in Allegheny City, Carnegie spent most of his evenings at the library of Col. James Anderson, a prosperous local businessman who gave working boys free access to his 1,500-volume library. It was clearly a formative experience, and one which he hoped might be of similar benefit to others. Starting in 1885, Carnegie began funding the construction of thousands of libraries. (The precise number he built is disputed; at the time of his death, the tally stood at 2,811 libraries. To ensure that communities were equally invested, he would only pay for buildings—and only after local authorities showed him credible plans for acquiring books and hiring staff.

During his lifetime, Carnegie created a number of charitable institutions that bore his name. In 1900, he founded the Carnegie Technical Schools, later the Carnegie Institute, and known today as Carnegie Mellon University, one of the world’s leading research universities. In 1904, he created what he called his “pet child,” the Carnegie Hero Fund Commission, which recognizes and rewards individuals who spontaneously risk life and limb to rush to the aid of others. A year later, he launched the Carnegie Foundation for the Advancement of Teaching, whose many accomplishments include the Flexner Report (which revolutionized American medical education) and the provision of pensions to college faculty members (which increased the attractiveness of an academic career).

Other organizations would bear his name, including the Carnegie Relief Fund (for the benefit of injured steelworkers), the Carnegie Dunfermline Trust (to support his hometown), and the Carnegie Trust for the Universities of Scotland (to bolster higher education in his native land). Manhattan’s Music Hall was not supposed to bear its patron’s name, but when European notables declined to attend a “music hall,” its benefactor relented and in 1893 the facility was renamed Carnegie Hall.

Not all of Carnegie’s efforts turned out successfully. For much of the final third of his life, he devoted his fortune (and personal influence) to encourage the peaceful resolution of international conflicts. For precisely that purpose, he created and closely attended to the Carnegie Endowment for International Peace and the Carnegie Council for Ethics in International Affairs. The outbreak of World War I dashed his hopes of world peace and precipitated his retreat from the public stage.

A somewhat ambiguous achievement was the creation of the Carnegie Corporation. The Corporation was among the first (and remains among the largest) grantmaking foundations in the United States, with consequential achievements including early support for the National Bureau of Economic Research, the research of Gunnar Myrdal, and the development of Sesame Street. And yet, the creation of the Corporation represented a failure of sorts for Carnegie—a failure to achieve his stated goal of giving away his entire fortune and dying penniless.

The fact that Carnegie’s philanthropic goals were (and are) well known is a testament to the third source of his enduring influence: his extensive public writings. In several widely read books, articles in serious British and American magazines, and frequent newspaper interviews and speeches, the colorful Scot’s opinions on a range of economic, political, and philosophical issues attracted public attention.

None of his writings had more influence than those about philanthropy, which were published as two articles in the North American Review in 1889 (and collected in a 1901 book called The Gospel of Wealth and Other Timely Essays). His views grew out of an economic and political philosophy that owed a lot to English classical liberalism and social theorists such as Herbert Spencer.

Carnegie attributed his business success not only to his own talents, but also to an economic system that valued enterprise, protected property, and encouraged competition. This system brought dramatic improvements in living standards to the public at-large, while enabling successful competitors like himself to become extremely wealthy. Yet Carnegie acknowledged that there were costs as well as triumphs, which included a wide gap between rich and poor, as well as social frictions between employers and workers.

Carnegie saw philanthropy as essential for addressing these shortcomings. He called on those enjoying the largest fruits of the economic system to use their wealth “to produce the most beneficial results for the community.” This would ensure that all of society benefited, reducing resentments that could ultimately lead to replacement of a bountiful system of free enterprise with a less productive one built on envy and redistribution.

Carnegie believed, however, that just giving away money was not enough—in fact, it could make things worse. “[O]f every thousand dollars spent in so-called charity today,” he opined, “it is probable that nine hundred and fifty dollars is unwisely spent—so spent, indeed, as to produce the very evils which it hopes to mitigate or cure.” The problem, as he saw it, was “indiscriminate charity”—providing help to people who were unwilling to help themselves. That sort of philanthropy only rewarded bad habits rather than encouraging good ones. He argued that philanthropy should instead support universities, libraries, hospitals, meeting halls, recreational facilities, and similar projects that strengthened and refreshed individuals so they could become more independent and productive themselves.

Carnegie urged his wealthy peers to provide for themselves and their dependents and then make it their “duty” to use the rest of their funds for their communities. They should apply their “wisdom, experience, and ability to administer” to lift up “poorer brethren” who “would or could not do for themselves.” He warned successful men who failed to help others that “the man who dies thus rich dies disgraced.”

At the same time, Carnegie’s “gospel” has attracted generations of successful businessmen, including the one whose current wealth rivals that of the steel magnate—Bill Gates. By linking giving not just to traditional religious values and moral imperatives to care for the needy, but also to preservation of the American economic and political system, Carnegie extended the rationale for philanthropy. In the process, he imbued charitable giving with an extra appeal for the generations of entrepreneurs and self-made men and women who came after him.

 

Further reading:

• Andrew Carnegie, The Autobiography of Andrew Carnegie (Northeastern University Press, 1986)
• David Nasaw, Andrew Carnegie (Penguin Books, 2006)