Andrew Carnegie on Business Philosophy

The Carnegie Hero Fund Commission's own mission page records that the institution's two-fold mission is to recognize and support those who perform acts of heroism in civilian life in the United States and Canada, and quotes Carnegie's founding Deed of Trust from 1904: We live in a heroic age, he wrote, and not seldom are we thrilled by deeds of heroism where men or women are injured or lose their lives in attempting to preserve or rescue their fellows. The page records that Carnegie's hero fund, administered by a twenty-one-member volunteer commission in Pittsburgh, was charged with honoring those he called the heroes of civilization, whose lifesaving actions he set against the heroes of barbarism who maim or kill their fellow man. The page notes that the mission has remained unchanged over more than a century despite massive upheaval in the social and world order, which it treats as testament both to Carnegie's foresight and to the essentially unchanging nature of human courage.

The Wikipedia article on the Carnegie Endowment for International Peace records that the institution was founded by Andrew Carnegie in 1910 with an initial endowment of ten million dollars and that its stated mission was to hasten the abolition of war, the foulest blot upon our civilization. The article records that Elihu Root, the former Secretary of State and Secretary of War, was selected as the Endowment's first president and that Root organized the institution's early program around international law, arbitration, and the promotion of the Hague Conventions. The article treats the founding as the institutional form of Carnegie's growing preoccupation with the abolition of war, a preoccupation intensified by his transatlantic correspondence with British statesmen including Gladstone, Morley, Rosebery, and Bryce, and made concrete in the Endowment's permanent staff and endowment. The institution survives today as the Carnegie Endowment for International Peace, a Washington-based foreign-policy think tank.

The Gospel of Wealth, more properly the essay titled Wealth, was written by Andrew Carnegie in June 1889, according to the essay's Wikipedia article, and describes the responsibility of philanthropy by the new upper class of self-made rich. The article records that Carnegie proposes that the best way to address the new phenomenon of wealth inequality is for the wealthy to use their surplus means responsibly and thoughtfully, in a posture akin to noblesse oblige, and that he argues surplus wealth produces the greatest net benefit to society when administered carefully by the wealthy themselves rather than bequeathed in lump sums. He argued against the wasteful use of capital in extravagance, irresponsible spending, or self-indulgence, and for the administration of capital over the course of one's lifetime toward reducing the stratification between rich and poor. The essay is the canonical text for the founder-thesis position on accumulated wealth.

Andrew Carnegie, born November 25, 1835, in Dunfermline, Fife, Scotland, and dying August 11, 1919, at Lenox, Massachusetts, is recorded by his Wikipedia biography as a Scottish-American industrialist and philanthropist whose 1889 article proclaiming the Gospel of Wealth called on the rich to use their wealth to improve society, expressed support for progressive taxation and an estate tax, and stimulated a wave of philanthropy. The biography identifies his leading role in founding and leading the Carnegie Steel Company and a dense list of named institutions — the Carnegie Library, Carnegie Hall, the Carnegie Institution for Science, the Carnegie Corporation of New York, the Carnegie Endowment for International Peace, Carnegie Mellon University, and others — each of which survives the founder by more than a century as the operating evidence for the philanthropic thesis he published in middle age and as the institutional architecture that made his fortune durable.

The Wikipedia article on the Carnegie Endowment for International Peace records that Carnegie had already provided funding for the Peace Palace at The Hague, which opened in 1913 as the home of the Permanent Court of Arbitration, and that the Endowment was the standing institutional vehicle through which Carnegie intended to advance the cause of international arbitration over the long run. The article notes that the Endowment's endowment and the Peace Palace gift together represented the largest single commitment by any private individual to the cause of international peace up to that time, and that the founder's selection of Root, a Republican foreign-policy elder, signaled that the project was meant to operate within the existing state system rather than as a pacifist protest against it. The article treats the Endowment and the Palace as complementary instruments of Carnegie's peace program.

Carnegie's Wikipedia biography records his earliest American employment as a cotton-mill bobbin boy after his family migrated to Allegheny City, Pennsylvania, in 1848, with subsequent work as a telegrapher, and that by the 1860s he had investments in railroads, railroad sleeping cars, bridges, and oil derricks. The biography frames the 1860s as the diversified-capital phase that preceded his concentrated steel bet, and notes that the cotton-mill and telegrapher years were the formative discipline from which his later cost-conscious and operator-minded management style descended. The progression from bobbin boy to telegrapher to railroad executive to sleeping-car and bridge investor to oil-derrick speculator and finally to integrated steelmaker is the canonical Carnegie arc the biography uses to explain how an immigrant weaver's son assembled the personal capital and operating apprenticeship that made the Carnegie Steel bet possible at all, and how a decade of small stakes preceded the million-dollar steel venture.

The Wikipedia article on the Gospel of Wealth records that Carnegie argued that the wealthy should consider the surplus revenues that come from the community as a matter of trust to be administered in the general interest, and that the article locates this argument within Carnegie's broader posture against inherited aristocracy and in favor of progressive taxation and an estate tax. The article notes that the essay contrasts the personal administration of surplus wealth by its possessor with the alternative of leaving wealth at death through testamentary bequest, on the ground that posthumous bequest often misallocates capital to heirs who neither earned nor understand it. The article also records the immediate transatlantic reception: Gladstone arranged for English publication in the Pall Mall Budget, and Cardinal Manning, Rev. Hugh Price, and Rev. Dr. Hermann Adler wrote formal replies, to which Carnegie himself responded, establishing the essay as a live transatlantic debate rather than a closed statement.

Carnegie's 1886 book Triumphant Democracy, or, Fifty Years' March of the Republic, recorded in his Wikipedia biography, framed the American republican experiment as a superior alternative to the inherited institutions of Europe and became the first of his major public writings to attract transatlantic attention. The biography records his purchase of Skibo Castle in the Scottish Highlands in 1898 as his principal retirement estate and his sustained involvement in Anglo-American affairs through the period of his greatest wealth, as well as the late-career award of the honorary Doctor of Laws from the University of Glasgow in June 1901 and the Freedom of the City of Glasgow later that year in recognition of his munificence. Together the book and the estate mark the transition from operating steelmaker to transatlantic public intellectual and philanthropist that defined Carnegie's public posture from the late 1880s onward, the platform from which the Gospel of Wealth was issued.

Carnegie's Wikipedia biography records that after the 1901 sale of Carnegie Steel he received the honorary degree of Doctor of Laws from the University of Glasgow and was elected Rector of the University of St Andrews, serving from 1901 to 1907, and that he was already serving as Rector of the University of Edinburgh. He used the academic platforms to argue for the responsibilities of wealth and for the cause of international peace, the latter intensified by his close personal contacts with British political leaders including Gladstone, Morley, Rosebery, and Balfour, and by his sustained correspondence with American presidents from Cleveland to Wilson. The biography treats the rectorships and honorary degrees as the institutional scaffolding that allowed Carnegie to convert his fortune into moral authority on the public questions of the day, especially the abolition of war, which he pursued through the Endowment for International Peace chartered in 1910.

Andrew Carnegie opened his posthumous 1920 Autobiography by grounding his origin in Dunfermline, Scotland, where he was born on November 25, 1835, in the attic of a one-story weaver's cottage at the corner of Moodie Street and Priory Lane. His father, William Carnegie, was a damask weaver, and Dunfermline had long been the center of the Scottish damask trade. Carnegie took conspicuous pride in his grandfather Andrew, a wit remembered around Patiemuir as chief of the lively club nicknamed Patiemuir College, whose seventy-fifth-year Hogmanay pranks still circulated among village old-timers. The first chapter is avowedly intimate in posture, written, as he said, not as one posturing before the public but as one speaking among his own tried-and-true friends and family, modeling the book on Judge Mellon's private Pittsburgh memoir, which had given him such pleasure that he hoped his own informal record might do the same for his descendants.

Carnegie dated his steel-making revolution to roughly 1870, when chemistry was almost unknown in American pig-iron manufacture and the Lucy Furnace lurched from trouble to trouble on rule-of-thumb management. He and Henry Phipps put shipping clerk Henry M. Curry in charge and hired a learned German chemist, Dr. Fricke, whose analyses opened great secrets: ironstone from mines with high reputations contained ten, fifteen, even twenty percent less iron than credited, while supposedly poor mines yielded superior ore, turning the entire purchasing logic upside down. Nine-tenths of the uncertainties of pig-iron making, Carnegie wrote, were dispelled under the burning sun of chemical knowledge. Competitors claimed afterward they could not afford a chemist; Carnegie replied that, had they known the truth, they would have known they could not afford to be without one, a posture he treated as the central lesson in how science converts cost into competitive distance.

Carnegie dated his shift from accumulation to distribution to the publication of his Gospel of Wealth essays, after which, he wrote, it was inevitable that he live up to its teachings by ceasing to struggle for more wealth. He resolved to stop accumulating and begin the infinitely more serious and difficult task of wise distribution. Profits had reached forty million dollars per year, and the firm figured that seventy million was achievable under its extension plans. He recorded that at this juncture, in March 1901, Charles M. Schwab told him that J. P. Morgan had said he would like to know whether Carnegie wished to retire from business, and that Schwab had already consulted the partners, who were disposed to sell. Carnegie replied that if his partners desired to sell he would concur, and the deal was done. Carnegie emphasized he never saw Morgan or anyone connected with him on the subject — only his own memorandum, which Morgan judged eminently fair.

Carnegie recorded that the Gospel of Wealth, published as a book by the Century Company of New York in 1900, contained magazine articles written between 1886 and 1899 and appearing in the Youth's Companion, the Century Magazine, the North American Review, the Forum, the Contemporary Review, the Fortnightly Review, the Nineteenth Century, and the Scottish Leader. He dated the title itself to the Pall Mall Budget, which republished the North American Review essay in England at Gladstone's request, and recorded that Gladstone, Cardinal Manning, Rev. Hugh Price, and Rev. Dr. Hermann Adler answered the essay and that he replied to each. The book became the operating charter for his philanthropic phase, the public commitment under which, as he wrote in the next chapter, it became inevitable that he live up to its teachings by ceasing to struggle for more wealth.

Carnegie's narrative of his early career turned on his intimacy with Thomas A. Scott, the Pennsylvania Railroad superintendent who became his mentor, and on the chapter titled Telegraph Office, where he recalled learning Morse as a messenger boy and then as an operator in Pittsburgh. The railroad service chapter records his promotion, still in his teens, into positions of authority on the Western Division, and the chapter titled Superintendent of the Pennsylvania tracks his ascent into divisional command. The Civil War Period chapter describes his secondment to Washington under Scott, then Assistant Secretary of War, to organize military telegraph and rail transport, and the Bridge-Building chapter pivots from railroad payroll into his first equity stakes in bridge construction and the Woodruff sleeping-car patent, the combination of salary and equity that built his initial capital long before steel. The chapter structure itself shows how the future steelmaker's apprenticeship was paid for by railroad payroll and sleeping-car royalties.