Andrew Carnegie: Business Empire and Philanthropic Legacy

Introduction

Perhaps the story of Andrew Carnegie begins best in his own words: "During my childhood the atmosphere around me was in a state of violent disturbance in matters theological as well as political. Along with the most advanced ideas which were being agitated in the political world — the death of privilege, the equality of the citizen, Republicanism — I heard many disputations upon theological subjects which the impressionable child drank in to an extent quite unthought of by his elders" (Carnegie, 1920, p. 22). If this sounds much like the world around us today, then it is perhaps the life of Carnegie — having described the world around him to which we can now relate — that remains a historical figure of significance by whom we might be guided in looking to the past for direction for our future.

Carnegie was a man who seized opportunities during a time when the world was not only in a constant state of upheaval but was also in the midst of an industrial revolution. Carnegie said: "Mastering technological change, in particular, had become a vital condition of doing business. Little, I think, does one know, who is not in the whirlwind of business affairs, of the rarity of the combined qualities requisite for conducting the business enterprise of today. The time has passed when business once established can be considered almost permanently secure. Business methods have changed; good will counts for less and less. Success in business is held . . . nowadays . . . at the cost of perpetual challenge to all comers" (Smith & Dalzell, 2000, p. 6).

This quote shows that Carnegie was aware of the opportunities around him, and equally aware that those opportunities extended beyond himself to others. The people he saw as having access to the same opportunities were those whose circumstances were even less fortunate than his own (Carnegie, p. 137). Born in Scotland to a poor family, Carnegie had the benefit of a close family (p. 1). His family helped him grasp the importance of education, which he likely had little trouble appreciating as he observed that it was the educated people around him who were best positioned to take advantage of the many opportunities available, especially in America. His first job in the United States was in a cotton mill at $1.20 per week (Wren & Greenwood, 1998, p. 106). Later, he secured work as a telegraph operator at $35 a week for a Pennsylvania Railroad superintendent (p. 106). Carnegie had impressed the superintendent with his self-taught skills as a Morse code telegrapher; he was reportedly fascinated by the telegraph and quickly mastered the code (p. 106).

Whether or not Carnegie ever considered himself a self-made man is not addressed directly in his autobiography. He does speak at length about the many opportunities he seized, but he also recognized that the technological advances of his era created opportunities for himself and others alike. He remained impressed by self-made men throughout his lifetime and would meet many such individuals.

Carnegie was neither intimidated by nor resentful of the success of those around him (Carnegie, p. 137). He applauded their resourcefulness and perhaps stood in awe of the way they embraced opportunity. In his autobiography, Carnegie described some of what he witnessed regarding the success of working-class people:

"What surprised me was the good humor which prevailed everywhere. It was a vast picnic, full of amusing incidents. Everybody was in high glee; fortunes were supposedly within reach; everything was booming. On the tops of the derricks floated flags on which strange mottoes were displayed. I remember looking down toward the river and seeing two men working their treadles boring for oil upon the banks of the stream, and inscribed upon their flag was 'Hell or China.' They were going down, no matter how far" (Carnegie, p. 137).

Carnegie the Businessman

Carnegie went on to describe how, as industrialization took hold of the country and different industries grew up to support and expand it, order followed out of chaos (Carnegie, p. 137). Born into poverty but driven by goals of personal accomplishment instilled by a family that held education and humanity in high regard, Carnegie seems to have taken great pride and pleasure in witnessing the men around him achieve their own goals alongside his steel business. His admiration for the rise of the hard-working man helps explain why, after amassing a great personal fortune, he gave it all away — perhaps so that others could aspire and be inspired (p. vii).

Carnegie came into entrepreneurial maturity during what has been described as "The Incorporation of America" (Phillips, 1999, p. 17). The men behind the entrepreneurial force in the country, like Carnegie, became known as "robber barons" (Smith & Dalzell, 2000). Carnegie appeared to have a keen sense for making the right decisions, recognizing timing, and possessing strong business acumen that kept him profitable. It was, however, as is the case with many who amass great fortunes, his investment acumen that helped him build not just an industrial empire but also his personal wealth (Wren & Greenwood, p. 106).

One can only imagine how disappointed Carnegie must have been as times changed and labor grew resentful of the wealth being accumulated by the barons of industry. When organized labor began to take shape, it came some years after Carnegie's own published papers on workers' rights to organize (Wren & Greenwood, p. 106). That paper was published six years before the steel industry actually began to organize itself with labor representation — a process that turned violent (p. 106). In the aftermath of a violent showdown between labor and management, during which Pinkerton men were brought in to confront the labor opposition, people died (p. 106). This period is said to have brought Carnegie great sadness (p. 106). Notably, neither the word "Pinkerton" nor the phrase "organized labor" appears in Carnegie's autobiography.

Peter Krass (2002), in his biography Carnegie, addresses the Pinkerton episode and the violence between labor and management that occurred when workers attempted to organize at Carnegie's Edgar Thomson works (p. 273). Krass reports that Carnegie cabled his representative Henry Clay Frick, who was responsible for negotiating with the coal mining workers' labor demands (p. 273). Frick assured Carnegie via telegraph that all was well and that the violence Carnegie had heard about was exaggerated (p. 273). In his autobiography, Carnegie described Frick this way: "He had proved his ability by starting as a poor railway clerk and succeeding. In 1882 we purchased one half of the stock of this company, and by subsequent purchases from other holders we became owners of the great bulk of the shares" (Carnegie, p. 222).

Krass describes the incident — which Carnegie largely ignores in his autobiography — in the following terms:

Labor Conflict and the Pinkerton Controversy

"Carnegie was also involved with the New York Botanical Garden and was appointed to the finance committee, joining Morgan, among others. A healthy competition had developed between these titans to fund such cultural institutions. For Carnegie, day-to-day business in Pittsburgh was hardly a priority, especially in the winter of 1890–1891, when he was so distracted by Louise's health and New York's cultural vibrancy. While he spent New Year's Eve at his wife's side, he neglected the situation at Edgar Thomson, where the furnace men were preparing to strike" (Krass, pp. 273–274).

To suggest that Carnegie was unaware of the problems at the Edgar Thomson site is difficult to reconcile with what is known about him as an astute businessman. It makes little sense that he would be uninformed about events at a site where he held a majority ownership stake. Moreover, it is often the case that those of great wealth who invest heavily in cultural philanthropy neglect the more immediate humanitarian needs of their workers — though that dimension of Carnegie's philanthropy would come later in his life.

Krass implies in some respects that the riots that broke out on New Year's Eve 1891 were unanticipated. Yet someone — apparently Frick, according to Krass's account — had taken the precaution of hiring Pinkerton agents (Krass, p. 273). These agents mingled with the workers, posing as Irish immigrant laborers, and gathered intelligence on the workers' strike plans (p. 273). The strike that followed turned violent, and further incidents of violence during this period allow us in retrospect to examine Carnegie as a businessman under pressure.