Andrew Carnegie and the Rise of Big Business

Carnegie

Andrew Carnegie: Robber Baron or Captain of Industry?

Harold Livesay's biography of Andrew Carnegie portrays a man that can be called at once both a Robber Baron and a Captain of Industry. This paper will attempt to show how each title applied to Carnegie in his lifetime and how, in fact, the two titles (far from being dissimilar) may actually be considered synonymous.

Andrew Carnegie's humble beginnings do not necessarily qualify him for the title of "Captain of Industry" simply because he rose from poor immigrant status to tycoon. What Livesay's portrayal does do is show how Carnegie came to personify the "American Dream" -- even if that dream was also a nightmare. Carnegie's unflagging disposition and pluck helped him thrive in an industry that was rapidly changing even as Carnegie himself was growing up. His work in the Pennsylvania Railroad gained for him the experience he needed to manage investments that would ultimately allow him to develop his very own steel company. Like the Pennsylvania Railroad, which was the biggest corporation of the day, Carnegie's steel business would become the number one industry on the planet. Part of what made Carnegie into a "Captain of Industry" was the fact that he was in the right place at the right time: as Livesay states, "The United States transferred much of its capital, manpower, and technology from the old agricultural world to the new industrial one," (21) and Carnegie found himself right at the center of it. By controlling his investments and overseeing the rise of his steel manufacturing industry, Carnegie placed himself more and more at the forefront of the industrial revolution. He was a serious reader, a friend of intelligent men, and most importantly driven to succeed.

What Carnegie imbibed was a true sense of capitalism -- a point which ties the two titles of "Captain of Industry" and "Robber Baron" together. As Livesay asserts, "The successful capitalist views money as something to use to make more money, not as something to spend; its value depends on what it will earn, not on what it will buy. One has to overthrow the consumer's mentality and replace it with the accumulator's" (53). Making money out of nothing but money is the essence of usury, which is what is at the heart of the capitalist endeavor -- and Carnegie understood the lesson well.

Indeed, Carnegie's philosophy was ruthless, derived as it was from the social Darwinism of the day: survival of the fittest translated into kill or be killed, and in the business world this meant that a "Captain of Industry" should just as easily be ready to be a "Robber Baron" if he wanted to hang onto the title of "Captain." Carnegie's partner in the steel industry was Henry Frick, and Frick was staunchly anti-union. The Homestead Strike of 1892 resulted in (as a result of Frick's organizing of scabs and the men to protect them) a brawl that left a handful of men dead and a lot more badly injured. The Homestead Strike and the attempts to break it, cast a shadow over Carnegie's reputation: after all, he had left Frick in charge to settle the strike -- and he had to have known that Frick would not shy away from violence.

Carnegie's philosophy could also be seen in the way he forced J.P. Morgan to buy out Carnegie's steel manufacturing business for nearly half a billion dollars. By threatening to undermine the market by lowering his prices to such a degree that Morgan's own steel industry would be crippled (unable to keep up with the competition), Carnegie compelled Morgan to meet the price he wanted for his own business -- and thus was able to retire from the business side of things and turn to philanthropy and his own "gospel of wealth."

Of course, for Carnegie to practice the gospel of wealth, he had to accumulate it first -- and he did not do this by paying his laborers more than minimum wage and letting the unions get what they wanted out of him. Carnegie scrapped for every penny, monopolized the market (or threatened to), exerted pressure on political figures when needed to see that he could maintain his control over the steel industry. The low wages Carnegie paid out to his workers went a long way to stoke the fires of public outcry: to them Carnegie was a baron who was robbing not from the rich (like Robin Hood) but from the poor (the workers). Carnegie's excuse to himself, perhaps, was that he always intended to give what he earned back to the people. And indeed by such nefarious means, Carnegie was able to amass a fortune.