The Gospel of Wealth

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Carnegie portrait (detail) in the National Portrait Gallery.[1]

"Wealth",[2] more commonly known as "The Gospel of Wealth",[3] is an article written by Andrew Carnegie in June[4] of 1889[5] that describes the responsibility of philanthropy by the new upper class of self-made rich. Carnegie proposed that the best way of dealing with the new phenomenon of wealth inequality was for the wealthy to redistribute their surplus means in a responsible and thoughtful manner. This approach was contrasted with traditional bequest (patrimony), where wealth is handed down to heirs, and other forms of bequest e.g. where wealth is willed to the state for public purposes. Carnegie argued that surplus wealth is put to best use (i.e. produces the greatest net benefit to society) when it is administered carefully by the wealthy. Carnegie also argues against wasteful use of capital in the form of extravagance, irresponsible spending, or self-indulgence, instead promoting the administration of said capital over the course of one's lifetime toward the cause of reducing the stratification between the rich and poor. As a result, the wealthy should administer their riches responsibly and not in a way that encourages "the slothful, the drunken, the unworthy".

Andrew Carnegie

"I should consider it a disgrace to die a rich man" -Andrew Carnegie, 1887

Early life

Andrew Carnegie was born in Dunfermline, Scotland in 1835. The only schooling he received was from the local grammar school. He held onto his Scottish roots throughout most of his life - he retained close ties with his relative that stayed in Scotland; many of his early business associates were americanized Scots; his English school friends had Scottish ties; he returned home to Scotland almost every summer. Even his radicalism can be tied to his Scottish roots. His immediate family rejected the establishment, from his grandfather who was a controversial orator and contributor to Register, William Cobbet's political journal, to his mother and father, who rejected the Presbyterian Church.

Due to their radicalism, the Carnegies moved to Antebellum America in 1848. His father lost nearly everything he owned, and never recovered from the shock of his poverty, so Carnegie's mother supported the family until he, himself, was able to become the primary breadwinner, and support the family. He felt indebted to his mother for the rest of his life, which contributed to his determination to succeed, and his generosity with his money later in life. Carnegie didn't marry until after his mother died.[6]

Industrial Life

Unlike many industrialists of his time, Carnegie was not an inventor or a risk-taking Wall Street financier. Many of his fellow capitalists financed their various business ventures with watered-down stocks. This is not how Carnegie chose to conduct his business. All of his early organizations were either partnerships or associations. He chose to focus on the vertical integration of a single industry, specifically the steel industry. Most others made their profits by creating a horizontal monopoly. He worked hard to control entire industries, rather than parts of many. By 1890, Carnegie was a multi-millionaire.[6]

Scholar and Activist

At the age of 35, Carnegie decided to limit his personal wealth and donate the surplus to benevolent causes. He was determined to be remembered for his good deeds rather than his wealth. He became a "radical" philanthropist. Prior to publishing his ideas about wealth, he began donating to his favorite causes, starting by donating a public bath to his hometown of Dunfermline.[6]

Carnegie never pursued a formal education. At one point, he wrote that he wished to attend Oxford University, but that never happened. Instead, he spent most of his free time as a young adult reading and educating himself.[6]

Death

Andrew Carnegie died in 1919 in Lennox, MA. His autobiography was published posthumously in 1920, which contained many gaps, since he died in the midst of writing the outbreak of the First World War.[6]

Publication

As Carnegie tried to live his life in a way that the poor could benefit from his wealth, he decided he needed to share his ideas with the public. In 1880, he published his controversial views in an article entitled "Wealth" in the North American Review, an opinion magazine for America's establishment. It was later published as "The Gospel of Wealth" in the Pall Mall Gazette.

Assertions

The Gospel of Wealth asserts that hard work and perseverance lead to wealth.

Carnegie based his philosophy on the observation that the heirs of large fortunes frequently squandered them in riotous living rather than nurturing and growing them. Even bequeathing one's fortune to charity was no guarantee that it would be used wisely, due to the fact that there was no guarantee that a charitable organization not under one's direction would use the money in accordance with one's wishes. Carnegie disapproved of charitable giving that maintained the poor in their impoverished state, and urged a movement toward the creation of a new mode of giving that would create opportunities for the beneficiaries of the gift to better themselves. As a result, the gift would not be simply consumed, but would be productive of even greater wealth throughout the house.

In Wealth, Carnegie examines the modes of distributing accumulated wealth and capital to the communities from which they originate. He preached that ostentatious living and amassing private treasures were wrong. He praised the high British taxes on the estates of dead millionaires, remarking that "By taxing estates heavily at death the State marks its condemnation of the selfish millionaire's unworthy life. It is desirable that nations should go much further in this direction."[2]

Carnegie made it clear that the duty of the rich was to live modest lifestyles,[7] and that any surplus of money they had was best suited for re-circulation back into society where it could be used to support the greater good. He shunned aristocratic chains of inheritance and argued that dependents should be supported by their work with major moderation, with the bulk of excess wealth to be spent on enriching the community. In cases where excess wealth was held until death, he advocated its apprehension by the state on a progressive scale: "Indeed, it is difficult to set bounds to the share of a rich man's estates which should go at his death to the public through the agency of the State, and by all means such taxes should be granted, beginning at nothing upon moderate sums to dependents, and increasing rapidly as the amounts swell, until of the millionaire's hoard, at least the other half comes to the privy coffer of the State."[2] He claimed that, in bettering society and people here on Earth, one would be rewarded at the gates of Paradise.

Reception

When Carnegie Steel busted the union in 1892, Carnegie was able to keep himself from blame because he focused on his new doctrine for the wealthy. The Homestead Strike ended in a showdown between 300 Pinkerton guards and a crowd of steel workers and supporters devolved into an exchange of gunfire. This outbreak left 7 workers and 3 guards dead, and many more wounded. It made headlines around the world, and reporters reached Carnegie, who was in Scotland at the time. When questioned, Carnegie called the violence "deplorable" but otherwise pleaded ignorance, and stated "I have given up all active control of the business." This move kept him innocent, and he began to focus on his philanthropic work and teaching the Gospel of Wealth. His good works still benefit people around the globe, and people saw that in him. The Homestead Strike did little to mar his reputation.[8]

Carnegie's controversial views on wealth sparked a trans-Atlantic debate that argued the nature, purpose, and disposition of wealth.

William E. Gladstone

William E. Gladstone, the head of the Liberal Party in England, and a friend of Carnegie's, had some sharp remarks on the publication. Even though they were close friends and had similar political ideals, Gladstone did not agree with Carnegie's paper. Gladstone defended primogeniture, unlimited inheritance, and the British Aristocracy.[6] This led to many other critics joining Gladstone in denouncing Carnegie's "radical" philanthropic ways.

These critical reviews led Carnegie to publish a series of essays defending himself. He defended individualism, private property, and the accumulation of personal wealth on the grounds that they benefited the human race in the long run. In an effort to convince his critics that he wasn't saying everyone should get free handouts from the upper class, he edited his original doctrine, so that it read "Help those who will help themselves, to provide part of the mans by which those who desire to improve may do so." Since many interpreted his writing to mean that all those in poverty should be assisted by the wealthy, it was necessary for Carnegie to clarify that charity has its limitations.[6]

Phoebe Apperson Hearst's "Gospel of Wealth"

In 1901, U.S. Senator Jonathan Prentiss Dolliver wrote an article for the celebrity magazine Success, titled "Phoebe Apperson Hearst and the New Gospel of Wealth". Hearst was an American philanthropist and suffragette. According to Dolliver, Hearst saw inadequacies of public schools and was concerned about urban poverty and vice. She, like Carnegie, believed that as a millionaire, it was her duty to help those less fortunate.[9] The purpose of Dolliver's article was to explain Hearst's "Gospel of Wealth" and illustrate how she should be viewed as a complementary equal to men like Carnegie. She declared that women who were wealthy had a sacred and moral duty to give away their fortunes to causes, especially progressive education and reform, to benefit their communities.[10] Like Carnegie, Hearst was very concerned with giving the lower class the opportunity to be educated at the same level at which the upper class was educated. Also like Carnegie, she established her own free public library. Hers was located in Anaconda, Montana.

Relevance in the Modern Age

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Carnegie Free Library of Braddock in Braddock, Pennsylvania, built in 1888, was the first Carnegie Library in the United States

Carnegie put his philosophy into practice through a program of gifts to endow public libraries, known as 'Carnegie libraries' in cities and towns throughout the United States and the English-speaking world, with the idea that he was thus providing people with the tools to better themselves.[11] In order to ensure that his gifts would not be wasted, he stipulated that the municipality must pass an ordinance establishing a tax to support the library's ongoing operating costs after the initial grant provided the costs for building and equipping the library. Each of these organizations had its own endowment and its own board of trustees. Many of them still exist today,

After several communities squandered their grants on extravagant buildings, Carnegie established a system of architectural guidelines that mandated simplicity and functionality. When it became obvious that Carnegie could not give away his entire fortune within his lifetime, he established the Carnegie Foundation to continue his program of giving.

Little Free Libraries are starting to pop up in cities like Ann Arbor and Detroit, MI, and Cleveland, OH. These free libraries follow Carnegie's philosophy of offering to the lower class things that the upper class already has access to. Little Free Libraries is an organization that stocks books in boxes throughout inner-city areas for the youth to enjoy. These kids don't have access to regular libraries, most likely because education is not a priority in their household. Having instant access to books in their neighborhood is beneficial in helping them improve their literacy and progress with their education at the same pace as the children in the more affluent neighborhoods.

Changing Perceptions

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See also

References

  1. National Portrait Gallery catalogue
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  3. The Gospel of Wealth by Andrew Carnegie
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  7. http://legacy.fordham.edu/halsall/mod/1889carnegie.asp
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  11. Abigail Ayres Van Slyck Free To All, p. 22, University of Chicago Press, 1995 ISBN 978-0-226-85031-3

External links