Rags to Riches to Philanthropy | Book Review
Rags to Riches to Philanthropy
Review of Andrew Carnegie, by David Nasaw
By: Will Schneider, 3/8/2007
His generosity changed the face of American philanthropy forever, and using philanthropy, he left eternal marks on the landscape of America and abroad. In fact, when Warren Buffett declared his intent to donate $31 billion to the Bill and Melinda Gates Foundation, he said he was following in the footsteps of a simple Scottish steelmaker. Nine decades before Bill Gates and Warren Buffett made headlines with their multi-billion dollar gifts, Andrew Carnegie turned the world of philanthropy upside down.
In a new book, David Nasaw explores Carnegie’s life and legacy. Nasaw, the author of The Chief: The Life of William Randolph Hearst, is an adept biographer. His Andrew Carnegie is a rare in-depth look at the great philanthropist’s private life. A particular strength of the biography is the detail with which Nasaw analyzes Carnegie’s upbringing in order to determine the factors that led him to his progressive philanthropic views.
Born into poverty in Scotland, Mr. Carnegie moved to Pittsburgh as a child, and proceeded to amass a fortune so huge that at one point he controlled 1/166 of the wealth of the United States. His “Gospel of Wealth” works appear to have been an attempt to understand why he was chosen to rise from poverty to extreme wealth. Timely investments, rather than a particular skill or talent, led to his wealth. In fact, Carnegie famously believed his wealth was unrelated to his hard work. For most of his career, he was somewhat of an absentee executive, often traveling and only occasionally checking in with his business interests.
Unlike John D. Rockefeller, Sr. whose faith led him to believe that a higher power had chosen him for wealth, Carnegie credited his success to the working man. He pledged to return the bulk of his fortune to the men and women on whom it had been built. While Rockefeller, to whom Carnegie is most often compared, viewed philanthropy as part of his religious obligation, Carnegie felt simply that he had an obligation to distribute his money to the needy and deserving.
Carnegie famously declared that “The man who dies rich, dies disgraced.” Indeed, in his seventy-third year, concerned that he still retained a fortune, he wrote to a number of people he highly respected, including Theodore Roosevelt, seeking their advice: “If you had say five or ten millions of dollars to put to the best use possible, what would you do with it?” In fact, he died with hundred of millions of dollars in assets (billons today), a fact which troubled him in the last years of his life. Upon his death, Mr. Carnegie effectively righted this “wrong” by endowing the Carnegie Corporation, in order to continue his good works after his death.
The book makes particular mention of Mr. Carnegie’s first experience with a profitable investment, his years as a business “robber-baron”, and his eventual attempt to distribute his fortune. Of his first dividend check he wrote, “I shall remember that check as long as I live, it gave me the first penny of revenue from capital — something I had not worked for with the sweat of my brow. ‘Eureka!’ I cried. ‘Here’s the goose that lays the golden eggs.’”
As the biography develops, the most curious aspect of Mr. Carnegie’s personality emerges. Although he accumulated one of the largest fortunes the world has ever seen, he consistently spoke in favor of Socialism. He declared to the New York Times in 1885 that “socialism is the grandest theory ever presented, and I am sure some day it will rule the world.”
He reiterated this theory in his “Gospel of Wealth” essays. “I believe the day is coming when a man who leaves more than a million at his death, except for public uses, will be regarded as not having properly administered that for which he was only the trust.” In fact, Mr. Carnegie strongly advocated for the steepest possible estate tax, in effect as a punishment from society on the wealthy who do not distribute their money before their death.
Not withstanding his Socialist-leaning declaration, Mr. Carnegie was certainly not prepared to divide his wealth. He postulated that if certain citizens accumulate vast quantities of money, they will be able to do more good by giving it away intelligently than by distributing it to the masses. “The more wealth that landed in wise hands, the more that could be given away wisely by the retired capitalist acting ‘as trustee and agent for his poorer brethren, bringing to their service his superior wisdom, experience, and ability to administer, doing for them better than they would or could do for themselves.’”
Philanthropy as it is known today was coined by Mr. Carnegie’s belief that society exists to benefit the working man, and that the wealthy are given the responsibility of supporting the common man where it is necessary. To this day, many notable philanthropists have followed his model of shunning multi-generational wealth, up to and including mega-billionaires Mr. Gates and Mr. Buffett.
Andrew Carnegie, by David Nasaw, The Penguin Press, 2006 | Click here to view the book at Amazon.com