Andrew Carnegie’s Gospel of Wealth

(from Super Summary, 2017.)

In 1889, the steel magnate Andrew Carnegie published a pair of articles later known as “The Gospel
of Wealth” in the North American Review. The essays laid out his ideas about how the ultra-rich
should use their assets to restructure the unequal distribution of wealth, rather than hoarding their
money. By this time, Carnegie was the second richest person in the US – a man whose fortune was
built through canny industry monopolies and through often violent strike-busting. Nevertheless, the
articles’ focus on the importance of moderate living, philanthropy- giving back to the community,
built Carnegie’s reputation as a benevolent immigrant success story rather than a rapacious titan of
industry. And it’s true that by the time of the publication of “The Gospel of Wealth,” Carnegie had
been living by its precepts for over 20 years.

The first essay that makes up “The Gospel of Wealth” begins with Carnegie’s firm belief that the gulf
between the rich and the poor is not only natural in a “survival of the fittest” kind of way, but is also a
good indicator of who is willing to do the hard work and who is lazy. The modern reader can see in
Carnegie’s beliefs both the 19th century’s misguided application of Darwinian evolutionary theories to
economics, and the Protestant teaching that poverty is a moral failing rather than a matter of birth,
luck, or opportunity.

Despite all this, Carnegie asks his readers – what should those who have excess wealth do with it?
Carnegie’s answer to this question is the thesis that his essay will try to prove: the super-rich do owe
some small amount of their success to the public, so maybe it’s only fair that they share some of it
back.
Carnegie discusses THREE possible directions for massive wealth: (1.) Bequeathing it to either family
or (2.) the public after death, or (3.) giving it away during one’s life. Family is right out, he declares –
history is full of heirs squandering fortunes on degradation, and assuming that you will somehow feel
the pride of your family’s importance after your death is silly. The problem with leaving your money to
the public is similar – who is to stop the trustees from spending your money in foolish ways after
you’re dead? Carnegie concludes that the best thing for the rich, especially the self-made rich, to do is
to use the same skills and abilities that they perfected in amassing their fortunes. Just as you worked
to rise to the top, now work to maximize the benefits that your money can have for society.

So where should this excess wealth go? Since Carnegie already pointed out that the poor are destitute
because of their own laziness, it makes no sense to give money directly to them. Instead, the best
thing to do is to make sure to only “help those who will help themselves; to provide part of the means
by which those who desire to improve may do so.” This could also mean contributing to public projects
that would function as “the ladders upon which the aspiring can rise.”

“TO DIE RICH IS TO

DIE DISGRACED.”

The second essay of “The Gospel of Wealth” picks up the idea of public projects and expands on it.
According to Carnegie, community resources that are suitable places for the rich to dispense their
wealth include universities, museums, libraries, hospitals, churches, parks, and pools. This way those
poor who would fritter away actual cash charity would, instead, be lifted up by institutions created for
their benefit. (The modern reader can see from this list that Carnegie practiced what he preached:
from Carnegie Mellon University, to his efforts to prevent WWI through the Carnegie Foundation, to
the over 5,000 community libraries that he founded, he used his wealth exactly in the ways he
thought best for the public good.)

The benefit to generous donors would be the praise and adulation of the communities they give to,
Carnegie argues. But at the same time, Carnegie balances this carrot with the stick of taxation,
praising the idea of high taxes on the super-rich and even suggesting that it would make sense for
governments to claw back a significant portion of estates after death from those who hadn’t
distributed their fortunes in life.

Carnegie’s essay ends by reminding his wealthy readers of the Biblical lessons of Jesus, whose
comparison between a rich man trying to get into heaven and a camel trying to get into the eye of a
needle offers a sharp rebuke to those hoarding their fortunes.
Upon publication in the U.S., and subsequent re-publication in England, “The Gospel of Wealth” set off
a debate, and then a backlash, as other members of his socio-economic class branded Carnegie a
“radical philanthropist” who wanted to upset the social order. Particularly scandalized were those
with inherited fortunes, those who argued strongly that the aristocracy was a necessary social good.
Carnegie was forced to write a series of short essays explaining his firm belief in private property and
capitalism in order to defend himself.

Today, Carnegie’s paternalism – his belief that poor people aren’t capable of spending money correctly
– faces criticism. However, his general idea that the super-rich should spend their wealth on public
works has been adopted by such billionaires as Microsoft’s Bill Gates and Berkshire Hathaway’s
Warren Buffet, who have pledged to distribute the bulk of their enormous riches on causes related to
health and education.

Social Darwinism
by Johnny Roy, PhD Apprend, 2019.

Social Darwinism is the application of Darwin’s theory of natural selection to society- specifically in
economics and business in America. Social Darwinism was embraced by the nation’s wealthy upper
class in the late 19th century to justify their accumulation of wealth and power.

The theory held that due to natural selection, the most intelligent, industrious, and productive people
would grow wealthy and survive while the uneducated and lazy would remain poor and die off. The
theory held that due to natural selection, the most intelligent, industrious, and productive people
would grow wealthy and survive while the uneducated and lazy would remain poor and die off. This
justification of wealth accumulation by upper-class society, as well as laissez-faire policies by the
government, led to the creation of powerful monopolies and trusts that dominated the economic and
political landscapes of the late 19th and early 20th centuries. Industrialists like John D. Rockefeller
and Andrew Carnegie amassed substantial power and wealth by building monopolies in oil and steel.
They controlled the marketplace and fully embraced the philosophy of Social Darwinism and the belief
in “survival of the fittest”.

Shears
(Scissors)

American Beauty Rose, Literary

Digest , Guy Spencer, 1905.
Anti-trust legislation passed in the late 19th century combined with Teddy Roosevelt’s presidency
finally began to break the stranglehold these monopolies had on society, and ushered in a new
Progressive Era for Americans. Following the end of Reconstruction in 1877, domestic policy shifted
from the social issues of slavery and began to revolve around promoting economic growth in the
country. Over the next several decades, the nation experienced one of the greatest technological and
manufacturing booms in the country’s history. The 2nd Industrial Revolution that occurred in the late
19th and early 20th centuries resulted in a rapid industrialization of a once agrarian-dominated
economic system.

This rapid expansion created mass amounts of wealth for the nation. However, this wealth was
concentrated in the hands of a few. As the country struggled with the emerging class warfare that
resulted from concentrated wealth and an ever-expanding lower class, the wealthy sought to justify
their amassed fortunes and the theory of Social Darwinism was exactly what they were looking for.

The wealthy sought to justify their amassed fortunes and the theory of Social Darwinism was exactly
what they were looking for.

Working off the theories put forth by Charles Darwin in his 1859 book On the Origin of Species,
wealthy capitalists defended their accumulation of the nation’s wealth and influence as simply the
process of natural selection. Herbert Spencer’s book Principles of Biology (1864), coined the term
“survival of the fittest,” which seemed to support the idea of natural selection. Spencer claimed that
Mother Nature worked to get rid of the weak aspects in order to allow the strong to survive.

Wealthy capitalists of the time viewed themselves as being the smartest, most industrious, and
forward-thinking people in society and thus, entitled to all the wealth, power, and influence that they
created and enjoyed.

Wealthy capitalists of the time viewed themselves as being the smartest, most industrious, and
forward-thinking people in society and thus, entitled to all the wealth, power, and influence that they
created and enjoyed. Social Darwinism became the justification for the business empires and amassed
fortunes created in the 2nd Industrial Revolution and gave rise to The Gilded Age.

“The way to make money is to buy when blood is running in the streets.”
-John D. Rockefeller

As a belief in the theory of Social Darwinism spread throughout the country, more and more business
empires were created. However, not everyone was experiencing the benefits of this industrial boom.
The Gilded Age was represented by extravagant parties held in lavish mansions and supported a
freewheeling attitude among the country’s wealthy. Yet, there was a growing resentment among the
country’s laborers, who felt as if they were not receiving their share of the profits. Vast empires were
created in oil, steel, railroads, and banking, and powerful executives emerged at the helm of these
companies.

In 1882, John D. Rockefeller founded Standard Oil and used a system of horizontal integration (The
acquisition of a business operating at the same level of the value chain in a similar or different industry.) to
either devour the competition or drive them out of business. Forming trusts and monopolies became
the pathway to economic dominance as survival of the fittest became all too real for many small
businesses. By 1890, while under the leadership of Rockefeller, Standard Oil grew to control nearly
90% of the country’s oil refineries. This amount of control gave Rockefeller immense power and
influence over not just oil but also state and national politics, which he used to gain more control and
wealth. Because of his monopoly on oil and the abundance of cheap labor due to an influx of European
immigrants,

Rockefeller was able to undercut the laborer and pay very little, further increasing his profits. The
laborer and the government saw the dangers that all-powerful monopolies presented to the country
and were forced into action.

The laborer and the government saw the dangers that all-powerful monopolies presented to the
country and were forced into action.
Name______________________________________________________ Period_____ Date: / /
Directions: Answer questions (1-15) based on the articles on Carnegie’s Gospel of Wealth and The Theory
of Social Darwinism. (7 points each.)

1. Define Andrew Carnegie’s Gospel of Wealth: ___________________________________________________________

_______________________________________________________________________________________________________

2. Define philanthropy: _________________________________________________________________________________

3. What is Carnegie’s belief on poverty according to his first essay in his Gospel of Wealth? Carnegie

_______________________________________________________________________________________________________

4. Carnegie believes that the super-rich owe a small amount of their success to whom? _____________________

5. What were Carnegie’s THREE possible directions for massive wealth?

a._______________________________________b._______________________________c.____________________________

6. Why did Carnegie feel that leaving money to your family, after your death, was silly?

_______________________________________________________________________________________________________

7. Why did he also feel that giving money directly to the poor was not a good idea?

_______________________________________________________________________________________________________

8. In Carnegie’s second essay, why did he decide to donate his money for public projects?

_______________________________________________________________________________________________________

9. Give TWO (2) examples (names) of these public projects:

a.____________________________________________________ b._____________________________________________

10. Define Social Darwinism:___________________________________________________________________________

11. How does the political cartoon, The American Beauty Rose (1905), exemplify Social Darwinism?

_______________________________________________________________________________________________________

12. “Social Darwinism became the justification for the business empires and amassed fortunes created in the

2nd Industrial Revolution and gave rise to The ____________________________________Age.”

13. Define The Gilded Age: _____________________________________________________________________________

14. Why did Rockefeller utilize horizontal integration?

_______________________________________________________________________________________________________

15. Besides Social Darwinism, and horizontal integration, list ONE (1) other ruthless tactic Rockefeller used
to create his oil monopoly?

_______________________________________________________________________________________________________