The Gospel of Wealth (1889) by Andrew Carnegie

The Gospel of Wealth (1889) by Andrew Carnegie

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Someone suggested that this book should be included in our short list of influential self-help books. I can’t think who it was, or why they recommended it with such enthusiasm. Here was a man who certainly rose from rags to riches. He came from a proud, and fiercely independent, Scottish family who lived in relative comfort on the profits his father made from a few hand looms he operated in one room of his Dunfermline home. With the sudden arrival of steam-powered mills the business became obsolete and the family was made destitute. By borrowing money from family and friends they managed to finance their passage to America. Andrew quickly found employment in a cotton mill, where he worked a twelve hour day for just $1.20 a week. Fifty years later he was judged to be the second richest man in the world, with a fortune estimated in today’s terms at over $300 billion. How was this transformation achieved?  He was undoubtedly astute, enormously ambitious, a glutton for hard work and very persistent. This trait he’d acquired at his parent’s knee, when they recited the tale of Robert the Bruce who acquired his tenacity and success by watching a spider constantly struggling to rebuild its broken web. As a child he determined that he’d acquire wealth, so he’d never again experience the insecurity that poverty brings. From his grand parents and uncles, he also acquired the determination to oppose the power of the landed aristocracy, and fight to promote the cause of the common man. His goal was equal opportunities for all, and unequal opportunities for himself. America, he felt, was the ideal place to attain these goals.

Quitting the cotton mill, he took a job with the Ohio Telegraph Company at double the salary. Shortly afterwards he became a telegraph operator at the rapidly growing Pennsylvania Railroad Company, and by the age of eighteen had muscles his way up to be superintendent of its Pittsburgh Division. Here he made himself indispensable to one of the company’s key executives, and with him started indulging in insider dealing whenever they had prior knowledge of outside deals in the railway industry.  He invested these ill-gotten gains with great shrewdness, branching out into oil wells, bond selling and finally steel manufacture, where he launched the Carnegie Steel Company which became one of the world’s largest and most profitable industrial concerns. In the process he was ready to sacrifice his scruples, preaching pacifism while his company was making a fortune selling guns and tanks. Somehow, while spear-heading this phenomenal growth, he still found time to expound his views by writing numerous articles

and several well-received books. At the end of his life he wrote an essay The Gospel of Wealth, which was first published in The North American Review. This might be considered the apologia of a man who had at times been somewhat ruthless and unscrupulous in his clamber for power. It’s been described as ‘a groundbreaking manifesto’, outlining the responsibility of the wealthy to return their fortunes to mainstream society. This he certainly did himself, for during his lifetime he erected almost sixteen hundred public libraries across America, built Carnegie Hall and founded Carnegie Mellon University. His underlying ethical principle was that a man who dies rich, dies disgraced.

In the essay Carnegie looks back with approval to the days of the old medieval craft system, when the apprentice carpenter and master craftsman lived and worked together in the same house. He regrets this loss of social homogeneity, and the growing gap between rich and poor, but says it’s inevitable in a capitalist society. He was a self confessed ‘disciple’ of Herbert Spencer, the philosopher, whom he’d met on a liner travelling from London to New York. He was glad to adopt Spencer’s evolutionary theories, particularly his pre-Darwinian concept of the ‘survival of the fittest’, which served to justify his ideas of social stratification. The founder of a steel works deserves to be rich and live in a large house because of his exceptional abilities. This may be hard for individuals to stomach when they occupy a lowly place in the pecking order, but it’s essential for the growing prosperity of the American nation, Carnegie argued, and also for the patronage of fine art, architecture, museums and concert halls. (Similar arguments are used today to justify the vast bonuses paid to casino bankers and hedge fund managers.). But with his childhood memories of working class riots, he harboured a deep seated fear that his place at the top of the greasy pole might one day be attacked by the disadvantage poor. So he makes a plea for strong law and order, quoting the Biblical injunction that: ‘Every man must be allowed to sit under his own vine and fig tree, with none to make afraid.’

To bolster his position he makes a further suggestion. The rich will always have a surplus, especially if they live frugally and unostentatiously as he recommends. All depends on how they use this surplus cash. It’s generally a mistake for them to leave it to their children who are likely to squander it, particularly since Daddy’s bequest deprives them of the motivation to make their own way in life. It’s equally unwise to leave it to charities, which may administer it badly and waste it on projects which are not of their choosing. The only solution is for the seriously rich to give away their fortunes during their lifetimes. This is what he proceeded to do, and which Bill Gates and Warren Buffet are doing with equal success today. But this only happens in exceptional circumstances. When Carnegie sold his shares in Carnegie Steel he invested the proceeds in 5% treasury stock, hiding the certificates in a purpose-built vault out of the reach of thieves, and as he admitted: ‘far away from the taxman’. But what of today’s rich, who are forced to travel in bullet proof cars and live in gated communities?  And what of the wealthy, like Michael Jackson, who choose to live outrageously and then fall on hard times?  Or the entrepreneurs in pre-war Germany who, through no fault of their own, were ruined by rampant inflation?

If this is a self help book, it has a very limited market, appealing only to the uber-rich. Far more practical help can be obtained from Andrew Carnegie’s autobiography, or better still from Think and Grow Rich Napoleon Hill’s twenty-year study of America’s wealthiest men, which Carnegie ‘commissioned’ but with his innate Scottish canniness, didn’t finance.

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