Andrew Carnegie and The Gospel of Wealth

ASU HST 200 (Historical Themes) Industrialization and the Rise of Big Business, 1870-1900 Andrew Carnegie and The Gospel of Wealth The quintessential "rags-to-riches" tale belongs to steel tycoon Andrew Carnegie. Despite the fact that these tales were more fiction than fact, they inspired many Americans to pursue like routes to success and wealth. It was one of the few true stories in Carnegie. Carnegie, who was born in Scotland, moved to Pennsylvania in 1848 with his family. After working for a short time as a "bobbin boy," changing spools of thread at a textile manufacturing in Pittsburgh when he was thirteen, he went on to work as a messenger for Telegram. He worked as a courier for the Pennsylvania Railroad, spending a lot of time in the office and eventually developing interests in railroads, bridge construction, and the steel business. After expressing his gratitude to Tom Scott, his boss and eventual president of the Pennsylvania Railroad, Carnegie worked his way up to management within the business and started investing part of his profits under Scott's supervision. Carnegie received over $1 million in cash dividends from one specific investment in the booming oil fields of northwest Pennsylvania in 1864, which gave him the money he needed to pursue his goal of modernizing the iron and steel industries and changing the United States as a whole. As the Union troops' telegraph coordinator and superintendent of military railways during the Civil War, Carnegie witnessed firsthand the significance of industry—particularly steel—for the nation's future development and was thus persuaded of his plan. The J was his first firm. Ten years later, Edgar Thompson Steel Works acquired the freshly constructed Homestead Steel Works from the Pittsburgh Bessemer Steel Company. By century's end, his business was turning over more than $40 million in profits annually. Despite not being a technical specialist in steel, Carnegie was a skilled marketer and promoter who was able to secure funding for his business. In addition, he made astute estimates on expansion and consolidation and was able to profit from astute commercial judgments. Due to his upbringing, Carnegie was always frugal with his earnings. He kept his gains during boom times and utilized them to acquire other steel firms at a discount during the economic downturns of the 1870s and 1890s. He was adamant about having the most recent machinery and equipment, and he challenged the workers who supervised and worked in his steel mills to always come up with new and creative methods to save costs and boost productivity. More than any other businessman of the time, Carnegie promoted the notion that the nation's most successful tycoons had a social responsibility. He thought that because of the circumstances surrounding their prosperity, they ought to help the less fortunate members of society. Since Carnegie's family had lived among the suffering masses, poverty was not an abstract term to him. He wanted to be the model of generosity for all the other well-known businesspeople of the day. Carnegie discussed his convictions in his well-known article, The Gospel of Wealth, which is shown here. He took inspiration for it from Herbert Spencer's thesis of social Darwinism, which maintained that society evolved through a process of evolution similar to that of plant or animal life, with the most capable and fit individuals enjoying the most success in terms of both material and social gains. Social Darwinism gave the concept of the self-made man, appealing to many who aspired to emulate Carnegie, an air of pseudoscience. There was a strong mystique around the rags-to-riches businessman. Writing about young, ambitious boys who overcome poverty and succeed in business through a combination of "luck and pluck," author Horatio Alger made his own fortune. His stories were so popular that they even inspired a board game where players could try to win in the same way that their heroes did.