“The man who dies thus rich dies disgraced.” – Andrew Carnegie
Philanthropy is a popular topic for the ultra-rich. These people have worked hard to accumulate their wealth and they want to now use it to improve the world. Bill Gates and Warren Buffet, two of the richest people on earth have created The Giving Pledge. It is a campaign to encourage wealthy people to contribute a majority of their wealth to philanthropic causes.
The issue is that there is no obligation to actually donate any money. When billionaires make the promise to donate 50% of their money it sometimes seems more like a publicity stunt than genuine charity. That is a rather cynical view, but it’s only because I have just read Andrew Carnegie’s Gospel of Wealth.
Andrew Carnegie (1835-1919) was a Scottish-American industrialist who made a fortune in the steel business. When he sold his company U.S. Steel to J.P. Morgan in 1901, he received the equivalent of $372 billion in 2014. Carnegie was one of the wealthiest men of all time, so when he writes about wealth distribution, people should read it.
Carnegie’s lifetime was a period of great social tension in the United States. Wealth industrialists and financiers such as John D. Rockefeller Sr. Cornelius Vanderbilt, J.P. Morgan, and Andrew Carnegie accumulated massive sums of wealth and often at the expense of the rest of the population. This period was the infancy of American industry. Naturally, the returns to the “first movers” would be large and lead to great fortunes.
The Administration of Wealth
Carnegie, like any good capitalist, realized that commercial advancement leads to advancement of civilization. However the social strife created by wealth inequality posed an existential threat to civilization. Carnegie wrote, “the problem of our age is the proper administration of wealth, so that the ties of brotherhood may still bind together the rich and poor in harmonious relationship.” This quote rings true today, the statistics that are published about wealth and income inequality cause a lot of animosity towards the rich. Carnegie’s philanthropy of choice was building libraries.
Edinburgh Central Library
By 1929, 10 years after Andrew Carnegie had passed away, there were over 2500 Carnegie Libraries. Public libraries allow knowledge and great books to be available to all people. Libraries do not discriminate because of wealth or age. This is a truly noble charitable cause, and these libraries are still providing benefits to their patrons. Carnegie placed great importance on charity that truly benefited society rather than made the benefactor feel good about themselves.
Charity For The World, Not The Conscience
This involved well thought out charitable acts. Carnegie detested charity that didn’t improve the world, and created a danger or net-negative. Carnegie was greatly influenced by the philosophy of Herbert Spencer, Spencer coined the term “Survival of the fittest” and applied evolutionary theory to the fields of sociology and ethics. Spencer’s ideas provided a philosophical backbone for Carnegie’s brash business practices and massive accumulation of wealth. Carnegie’s motto became “All is well, since all grows better” after he read Spencer’s work. This explains Carnegie’s belief about wasteful charity,
“It were better for mankind that the millions of the rich were thrown in to the sea than so spent as to encourage the slothful, the drunken, the unworthy.”
Carnegie believed the wealthy should use their wealth to improve the world and help the human race evolve. Carnegie’s philanthropy truly dwarfs any contemporary philanthropist. After reading Carnegie’s The Gospel of Wealth, The Giving Pledge is suddenly very unimpressive. These ultra-rich are making a moral commitment to give away at least half their wealth. A lot of them are probably planning to pass on a lot of wealth to their children. Carnegie warns of this when he writes;
There are instances of millionaires’ sons unspoiled by wealth, who, being rich, still perform great services in the community. Such are the very salt of the earth, as valuable as, unfortunately, they are rare; still it is not the exception, but the rule, that men must regard, and, looking at the usual result of enormous sums conferred upon legatees, the thoughtful man must shortly say, “I would as soon leave to my son a curse as the almighty dollar,” and admit to himself that it is not the welfare of the children, but family pride, which inspires these enormous legacies.