ANDREW CARNEGIE

“Wealth” (1889)1

The tycoon Andrew Carnegie consolidated much of the steel industry through both horizontal integration (buying up his competitors) and vertical integration (buying up businesses his steel mills depended upon, like mines, railroads, and ore ships). In the process he amassed a personal fortune of $480 million by 1901, when he sold his businesses to banker J.P. Morgan. This essay, which would later be remembered as “The Gospel of Wealth,” was originally published in The North American Review in June 1889. In it Carnegie addressed the problem of vast economic inequality that the Industrial Revolution made worse and the re- sponsibility that those who benefited from the system (i.e., the rich) had toward the less fortunate. While Carnegie advocated philanthropy, his politics remained conservative by denying government a role in alleviating the social gap and his paternalism toward the poor (“the slothful, the drunken, the unworthy”) could be downright condescending. __________________________________________________________________

The problem of our age is the proper administration of wealth, so that the ties of brother- hood may still bind together the rich and poor in harmonious relationship. The conditions of hu- man life have not only been changed, but revolutionized, within the past few hundred years. In former days there was little difference between the dwelling, dress, food, and environment of the chief and those of his retainers. The Indians are today where civilized man then was. When visit- ing the Sioux, I was led to the wigwam of the chief. It was just like the others in external appear- ance, and even within the difference was trifling between it and those of the poorest of his braves. The contrast between the palace of the millionaire and the cottage of the laborer with us today measures the change which has come with civilization.

This change, however, is not to be deplored, but welcomed as highly beneficial. It is well, nay, essential for the progress of the race that the houses of some should be homes for all that is highest and best in literature and the arts, and for all the refinements of civilization, rather than that none should be so. Much better this great irregularity than universal squalor. Without wealth there can be no Mæcenas.2 The “good old times” were not good old times. Neither master nor servant was as well situated then as today. A relapse to old conditions would be disastrous to both—not the least so to him who serves—and would Sweep away civilization with it. But whether the change be for good or ill, it is upon us, beyond our power to alter, and therefore to be accepted and made the best of. It is a waste of time to criticize the inevitable.

It is easy to see how the change has come. One illustration will serve for almost every phase of the cause. In the manufacture of products we have the whole story. It applies to all combinations of human industry, as stimulated and enlarged by the inventions of this scientific age. Formerly articles were manufactured at the domestic hearth or in small shops which formed part of the household. The master and his apprentices worked side by side, the latter living with 1 Carnegie Corporation of New York: www.carnegie.org/publications/the-gospel-of-wealth. Accessed 8/20/18. Some of the spelling and punctuation have been edited here for greater clarity. 2 This wealthy Roman knight was a patron of the arts and supporter of the poets Horace and Virgil.

 

 

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the master, and therefore subject to the same conditions. When these apprentices rose to be mas- ters, there was little or no change in their mode of life, and they, in turn, educated in the same routine succeeding apprentices. There was, substantially social equality, and even political equal- ity, for those engaged in industrial pursuits had then little or no political voice in the State.

But the inevitable result of such a mode of manufacture was crude articles at high prices. Today the world obtains commodities of excellent quality at prices which even the generation preceding this would have deemed incredible. In the commercial world similar causes have pro- duced similar results, and the race is benefited thereby. The poor enjoy what the rich could not before afford. What were the luxuries have become the necessaries of life. The laborer has now more comforts than the landlord had a few generations ago. The farmer has more luxuries than the landlord had, and is more richly clad and better housed. The landlord has books and pictures rarer, and appointments more artistic, than the King could then obtain.

The price we pay for this salutary change is, no doubt, great. We assemble thousands of operatives in the factory, in the mine, and in the counting-house, of whom the employer can know little or nothing, and to whom the employer is little better than a myth. All intercourse be- tween them is at an end. Rigid Castes are formed, and, as usual, mutual ignorance breeds mutual distrust. Each Caste is without sympathy for the other, and ready to credit anything disparaging in regard to it. Under the law of competition, the employer of thousands is forced into the strict- est economies, among which the rates paid to labor figure prominently, and often there is friction between the employer and the employed, between capital and labor, between rich and poor. Hu- man society loses homogeneity.

The price which society pays for the law of competition, like the price it pays for cheap comforts and luxuries, is also great; but the advantage of this law are also greater still, for it is to this law that we owe our wonderful material development, which brings improved conditions in its train. But, whether the law be benign or not, we must say of it, as we say of the change in the conditions of men to which we have referred: It is here; we cannot evade it; no substitutes for it have been found; and while the law may be sometimes hard for the individual, it is best for the race, because it insures the survival of the fittest in every department. We accept and welcome therefore, as conditions to which we must accommodate ourselves, great inequality of environ- ment, the concentration of business, industrial and commercial, in the hands of a few, and the law of competition between these, as being not only beneficial, but essential for the future pro- gress of the race. Having accepted these, it follows that there must be great scope for the exercise of special ability in the merchant and in the manufacturer who has to conduct affairs upon a great scale. That this talent for organization and management is rare among men is proved by the fact that it invariably secures for its possessor enormous rewards, no matter where or under what laws or conditions. The experienced in affairs always rate the MAN whose services can be obtained as a partner as not only the first consideration, but such as to render the question of his capital scarcely worth considering, for such men soon create capital; while, without the special talent required, capital soon takes wings. Such men become interested in firms or corporations using millions; and estimating only simple interest to be made upon the capital invested, it is inevitable that their income must exceed their expenditures, and that they must accumulate wealth. Nor is there any middle ground which such men can occupy, because the great manufacturing or com- mercial concern which does not earn at least interest upon its capital soon becomes bankrupt. It must either go forward or fall behind: to stand still is impossible. It is a condition essential for its successful operation that it should be thus far profitable, and even that, in addition to interest on capital, it should make profit. It is a law, as certain as any of the others named, that men pos-

 

 

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sessed of this peculiar talent for affair, under the free play of economic forces, must, of necessity, soon be in receipt of more revenue than can be judiciously expended upon themselves; and this law is as beneficial for the race as the others.

Objections to the foundations upon which society is based are not in order, because the condition of the race is better with these than it has been with any others which have been tried. Of the effect of any new substitutes proposed we cannot be sure. The Socialist or Anarchist who seeks to overturn present conditions is to be regarded as attacking the foundation upon which civilization itself rests, for civilization took its start from the day that the capable, industrious workman said to his incompetent and lazy fellow, “If thou dost net sow, thou shalt not reap,” and thus ended primitive Communism by separating the drones from the bees. One who studies this subject will soon be brought face to face with the conclusion that upon the sacredness of property civilization itself depends—the right of the laborer to his hundred dollars in the savings bank, and equally the legal right of the millionaire to his millions. To these who propose to substitute Communism for this intense Individualism the answer, therefore, is: The race has tried that. All progress from that barbarous day to the present time has resulted from its displacement. Not evil, but good, has come to the race from the accumulation of wealth by those who have the ability and energy that produce it. But even if we admit for a moment that it might be better for the race to discard its present foundation, Individualism,—that it is a nobler ideal that man should labor, not for himself alone, but in and for a brotherhood of his fellows, and share with them all in common, realizing Swedenborg’s idea of Heaven, where, as he says, the angels derive their hap- piness, not from laboring for self, but for each other,—even admit all this, and a sufficient an- swer is, This is not evolution, but revolution. It necessitates the changing of human nature itself a work of eons, even if it were good to change it, which we cannot know. It is not practicable in our day or in our age. Even if desirable theoretically, it belongs to another and long-succeeding sociological stratum. Our duty is with what is practicable now; with the next step possible in our day and generation. It is criminal to waste our energies in endeavoring to uproot, when all we can profitably or possibly accomplish is to bend the universal tree of humanity a little in the di- rection most favorable to the production of good fruit under existing circumstances. We might as well urge the destruction of the highest existing type of man because he failed to reach our ideal as favor the destruction of Individualism, Private Property, the Law of Accumulation of Wealth, and the Law of Competition; for these are the highest results of human experience, the soil in which society so far has produced the best fruit. Unequally or unjustly, perhaps, as these laws sometimes operate, and imperfect as they appear to the Idealist, they are, nevertheless, like the highest type of man, the best and most valuable of all that humanity has yet accomplished.

We start, then, with a condition of affairs under which the best interests of the race are promoted, but which inevitably gives wealth to the few. Thus far, accepting conditions as they exist, the situation can be surveyed and pronounced good. The question then arises,—and, if the foregoing be correct, it is the only question with which we have to deal,—What is the proper mode of administering wealth after the laws upon which civilization is founded have thrown it into the hands of the few? And it is of this great question that I believe I offer the true solution. It will be understood that fortunes are here spoken of, not moderate sums saved by many years of effort, the returns on which are required for the comfortable maintenance and education of fami- lies. This is not wealth, but only competence which it should be the aim of all to acquire.

There are but three modes in which surplus wealth can be disposed of. It call be left to the families of the decedents; or it can be bequeathed for public purposes; or, finally, it can be ad- ministered during their lives by its possessors. Under the first and second modes most of the

 

 

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wealth of the world that has reached the few has hitherto been applied. Let us in turn consider each of these modes. The first is the most injudicious. In monarchical countries, the estates and the greatest portion of the wealth are left to the first son, that the vanity of the parent may be gratified by the thought that his name and title are to descend to succeeding generations unim- paired. The condition of this class in Europe today teaches the futility of such hopes or ambi- tions. The successors have become impoverished through their follies or from the fall in the val- ue of land. Even in Great Britain the strict law of entail has been found inadequate to maintain the status of an hereditary class. Its soil is rapidly passing into the hands of the stranger. Under republican institutions the division of property among the children is much fairer, but the ques- tion which forces itself upon thoughtful men in all lands is: Why should men leave great fortunes to their children? If this is done from affection, is it not misguided affection? Observation teach- es that, generally speaking, it is not well for the children that they should be so burdened. Neither is it well for the state. Beyond providing for the wife and daughters moderate sources of income, and very moderate allowances indeed, if any, for the sons, men may well hesitate, for it is no longer questionable that great suns bequeathed oftener work more for the injury than for the good of the recipients. Wise men will soon conclude that, for the best interests of the members of their families and of the state, such bequests are an improper use of their means.

It is not suggested that men who have failed to educate their sons to earn a livelihood shall cast them adrift in poverty. If any man has seen fit to rear his sons with a view to their liv- ing idle lives, or, what is highly commendable, has instilled in them the sentiment that they are in a position to labor for public ends without reference to pecuniary considerations, then, of course, the duty of the parent is to see that such are provided for moderation. There are instances of mil- lionaires’ sons unspoiled by wealth, who, being rich, still perform great services in the communi- ty. 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.

As to the second mode, that of leaving wealth at death for public uses, it may be said that this is only a means for the disposal of wealth, provided a man is content to wait until he is dead before it becomes of much good in the world. Knowledge of the results of legacies bequeathed is not calculated to inspire the brightest hopes of much posthumous good being accomplished. The cases are not few in which the real object sought by the testator is not attained, nor are they few in which his real wishes are thwarted. In many cases the bequests are so used as to become only monuments of his folly. It is well to remember that it requires the exercise of not less ability than that which acquired the wealth to use it so as to be really beneficial to the community. Besides this, it may fairly be said that no man is to be extolled for doing what he cannot help doing, nor is he to be thanked by the community to which he only leaves wealth at death. Men who leave vast sums in this way may fairly be thought men who would not have left it at all, had they been able to take it with them. The memories of such cannot be held in grateful remembrance, for there is no grace in their gifts. It is not to be wondered at that such bequests seem so generally to lack the blessing.

The growing disposition to tax more and more heavily large estates left at death is a cheering indication of the growth of a salutary change in public opinion. The State of Pennsylva- nia now takes—subject to some exceptions—one-tenth of the property left by its citizens. The budget presented in the British Parliament the other day proposes to increase the death-duties;

 

 

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and, most significant of all, the new tax is to be a graduated one. Of all forms of taxation, this seems the wisest. Men who continue hoarding great sums all their lives, the proper use of which for public ends would work good to the community, should be made to feel that the community, in the form of the state, cannot thus be deprived of its proper share. By taxing estates heavily at death the state marks its condemnation of the selfish millionaire’s unworthy life.

It is desirable; that nations should go much further in this direction. Indeed, it is difficult to set bounds to the share of a rich man’s estate which should go at his death to the public through the agency of the state, and by all means such taxes should be graduated, beginning at nothing upon moderate sums to dependents, and increasing rapidly as the amounts swell, until of the millionaire’s hoard, as of Shylock’s, at least “The other half / Comes to the privy coffer of the state.”

This policy would work powerfully to induce the rich man to attend to the administration of wealth during his life, which is the end that society should always have in view, as being that by far most fruitful for the people. Nor need it be feared that this policy would sap the root of enterprise and render men less anxious to accumulate, for to the class whose ambition it is to leave great fortunes and be talked about after their death, it will attract even more attention, and, indeed, be a somewhat nobler ambition to have enormous sums paid over to the state from their fortunes.

There remains, then, only one mode of using great fortunes; but in this we have the true antidote for the temporary unequal distribution of wealth, the reconciliation of the rich and the poor—a reign of harmony—another ideal, differing, indeed, from that of the Communist in re- quiring only the further evolution of existing conditions, not the total overthrow of our civiliza- tion. It is founded upon the present most intense individualism, and the race is projected to put it in practice by degree whenever it pleases. Under its sway we shall have an ideal state, in which the surplus wealth of the few will become, in the best sense the property of the many, because administered for the common good, and this wealth, passing through the hands of the few, can be made a much more potent force for the elevation of our race than if it had been distributed in small sums to the people themselves. Even the poorest can be made to see this, and to agree that great sums gathered by some of their fellow-citizens and spent for public purposes, from which the masses reap the principal benefit, are more valuable to them than if scattered among them through the course of many years in trifling amounts.

If we consider what results flow from the Cooper Institute, for instance, to the best por- tion of the race in New York not possessed of means, and compare these with those which would have arisen for the good of the masses from an equal sum distributed by Mr. Cooper in his life- time in the form of wages, which is the highest form of distribution, being for work done and not for charity, we can form some estimate of the possibilities for the improvement of the race which lie embedded in the present law of the accumulation of wealth. Much of this sum if distributed in small quantities among the people, would have been wasted in the indulgence of appetite, some of it in excess, and it may be doubted whether even the part put to the best use, that of adding to the comforts of the home, would have yielded results for the race, as a race, at all comparable to those which are flowing and are to flow from the Cooper Institute from generation to generation. Let the advocate of violent or radical change ponder well this thought.

We might even go so far as to take another instance, that of Mr. Tilden’s bequest of five millions of dollars for a free library in the city of New York, but in referring to this one cannot help saying involuntarily, how much better if Mr. Tilden had devoted the last years of his own life to the proper administration of this immense sum; in which case neither legal contest nor any

 

 

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other cause of delay could have interfered with his aims. But let us assume that Mr. Tilden’s mil- lions finally become the means of giving to this city a noble public library, where the treasures of the world contained in books will be open to all forever, without money and without price. Con- sidering the good of that part of the race which congregates in and around Manhattan Island, would its permanent benefit have been better promoted had these millions been allowed to circu- late in small sums through the hands of the masses? Even the most strenuous advocate of Com- munism must entertain a doubt upon this subject. Most of those who think will probably enter- tain no doubt whatever.

Poor and restricted are our opportunities in this life; narrow our horizon; our best work most imperfect; but rich men should be thankful for one inestimable boon. They have it in their power during their lives to busy themselves in organizing benefactions from which the masses of their fellows will derive lasting advantage, and thus dignify their own lives. The highest life is probably to be reached, not by such imitation of the life of Christ as Count Tolstoi gives us, but, while animated by Christ’s spirit, by recognizing the changed conditions of this age, and adopt- ing modes of expressing this spirit suitable to the changed conditions under which we live; still laboring for the good of our fellows, which was the essence of his life and teaching, but laboring in a different manner.

This, then, is held to be the duty of the man of Wealth: First, to set an example of modest, unostentatious living, shunning display or extravagance; to provide moderately for the legitimate wants of those dependent upon him; and after doing so to consider all surplus revenues which come to him simply as trust funds, which he is called upon to administer, and strictly bound as a matter of duty to administer in the manner which, in his judgment, is best calculated to produce the most beneficial results for the community—the man of wealth thus becoming the mere agent and trustee for his poorer brethren, bringing to their service his superior wisdom, experience and ability to administer, doing for them better than they would or could do for themselves.

We are met here with the difficulty of determining what are moderate sums to leave to members of the family; what is modest, unostentatious living; what is the test of extravagance. There must be different standards for different conditions. The answer is that it is as impossible to name exact amounts or actions as it is to define good manners, good taste, or the rules of pro- priety; but, nevertheless, these are verities, well known although undefinable. Public sentiment is quick to know and to feel what offends these. So is the case of wealth. The rule in regard to good taste in the dress of men or women applies here. Whatever makes one conspicuous offends the canon. If any family be chiefly known for display, for extravagance in home, table, equipage, for enormous sums ostentatiously spent in any form upon itself, if these be its chief distinctions, we have no difficulty in estimating its nature or culture. So likewise in regard to the use or abuse of its surplus wealth, or to generous, freehanded cooperation in good public uses, or to unabated efforts to accumulate and hoard to the last, whether they administer or bequeath. The verdict rests with the best and most enlightened public sentiment. The community will surely judge and its judgments will not often be wrong.

The best uses to which surplus wealth can be put have already been indicated. These who would administer wisely must, indeed, be wise, for one of the serious obstacles to the improve- ment of our race is indiscriminate 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. Of every thousand dollars spent in so called charity today, it is probable that $950 is unwisely spent; so spent, indeed as to produce the very evils which it proposes to mitigate or cure. A well- known writer of philosophic books admitted the other day that he had given a quarter of a dollar

 

 

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to a man who approached him as he was coming to visit the house of his friend. He knew nothing of the habits of this beggar; knew not the use that would be made of this money, although he had every reason to suspect that it would be spent improperly. This man professed to be a disciple of Herbert Spencer; yet the quarter-dollar given that night will probably work more injury than all the money which its thoughtless donor will ever be able to give in true charity will do good. He only gratified his own feelings, saved himself from annoyance,—and this was probably one of the most selfish and very worst actions of his life, for in all respects he is most worthy.

In bestowing charity, the main consideration should be to help those who will help them- selves; to provide part of the means by which those who desire to improve may do so; to give those who desire to use the aids by which they may rise; to assist, but rarely or never to do all. Neither the individual nor the race is improved by alms-giving. Those worthy of assistance, ex- cept in rare cases, seldom require assistance. The really valuable men of the race never do, ex- cept in cases of accident or sudden change. Everyone has, of course, cases of individuals brought to his own knowledge where temporary assistance can do genuine good, and these he will not overlook. But the amount which can be wisely given by the individual for individuals is neces- sarily limited by his lack of knowledge of the circumstances connected with each. He is the only true reformer who is as careful and as anxious not to aid the unworthy as he is to aid the worthy, and, perhaps, even more so, for in alms-giving more injury is probably done by rewarding vice than by relieving virtue.

The rich man is thus almost restricted to following the examples of Peter Cooper, Enoch Pratt of Baltimore, Mr. Pratt of Brooklyn, Senator Stanford, and others, who know that the best means of benefiting the community is to place within its reach the ladders upon which the aspir- ing can rise—parks, and means of recreation, by which men are helped in body and mind; works of art, certain to give pleasure and improve the public taste, and public institutions of various kinds, which will improve the general condition of the people;—in this manner returning their surplus wealth to the mass of their fellows in the forms best calculated to do them lasting good.

Thus is the problem of Rich and Poor to be solved. The laws of accumulation will be left free; the laws of distribution free. Individualism will continue, but the millionaire will be but a trustee for the poor; entrusted for a season with a great part of the increased wealth of the com- munity, but administering it for the community far better than it could or would have done for itself. The best minds will thus have reached a stage in the development of the race in which it is clearly seen that there is no mode of disposing of surplus wealth creditable to thoughtful and ear- nest men into whose hands it flows save by using it year by year for the general good. This day already dawns. But a little while, and although, without incurring the pity of their fellows, men may die sharers in great business enterprises from which their capital cannot be or has not been withdrawn, and is left chiefly at death for public uses, yet the man who dies leaving behind many millions of available wealth, which was his to administer during life, will pass away “unwept, unhonored, and unsung,” no matter to what uses he leaves the dross which he cannot take with him. Of such as these the public verdict will then be: “The man who dies thus rich dies dis- graced.”

Such, in my opinion, is the true Gospel concerning Wealth, obedience to which is des- tined someday to solve the problem of the Rich and the Poor, and to bring “Peace on earth, among men Good-Will.”

 

 

WILLIAM JEWETT TUCKER

EXCERPTS FROM A REVIEW OF “The Gospel of Wealth” (1891)1

Rev. William Jewett Tucker would be most remembered as the ninth president of Dartmouth College (1893 – 1909), taking the small New Hampshire school out of debt and obscurity. Before becoming president, he served as a professor of rheto- ric there and helped to establish the South End House, one of Boston’s first set- tlement houses for the poor. In an 1891 issue of the Andover Review, a Dart- mouth publication, Rev. Tucker proved that one did not need to be an economist to find many faults with Andrew Carnegie’s doctrine of social uplift and the alle- viation of poverty. __________________________________________________________________

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The course of discussion which has followed until now the republication of [Andrew

Carnegie’s “Wealth” essay] … is especially significant for what has not been discussed. With a single exception, the discussion has been confined to the question of the charitable disposition of private wealth, without entering at all, except in the way of illustration, upon the much more se- rious question of the vast concentration of wealth in private hands. And yet the argument of Mr. Carnegie had challenged attention at this very point. His “gospel” rested upon the clear and bold assumption that wealth was best placed in the hands of the few; the gospel part of his message being the duty of the few to redistribute their wealth in the interest of the many. It would, of course, be unfair to the eminent men … who have in the main endorsed so heartily Mr. Carne- gie’s scheme, to affirm that they accept the theory upon which it rests. Still they have not thought it necessary to express their dissent from it. …

It is because of the very general acceptance of Mr. Carnegie’s gospel without questioning or apparently examining the premises upon which it rests, or the consequences which it may in- volve if completely accepted, that I am led to offer the following criticism. I honor the personal qualities of the author which are displayed in this essay,—independence, business sagacity, breadth of view, and generous motive. I acknowledge the great benefit to society from the gifts of the rich, from those which have been received and from those which are likely to be received. But I believe that the charity which this gospel enjoys is too costly, if taken at the price which the author puts upon it; namely, the acceptance of his doctrine of the relation of private wealth to society.

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Summing up Mr. Carnegie’s theory, it may, I think, be fairly stated in the following terms:

The present economic system, which is established in individualism and worked through competition, is on the whole the best attainable system. The millionaire is the necessary product 1 William Jewett Tucker, “The Gospel of Wealth” Andover Review, Vol. XV (1891), pp. 631-45. Tucker’s footnotes have been left out, and some of the spelling and punctuation have been modernized.

 

 

of that system; wealth inevitably falls under it into the hands of the few. This, too, is best, for the millionaire is the natural trustee of the poor; and he can in various ways administer wealth for the community better than the community can administer it for itself. The sole question then is, How shall the rich man fulfill his trusteeship? Not by returning his fortune, beyond a competence to his family. Not by devising his money by will. But by distributing his fortune, during his life- time, according to his judgment of the public need.

It is of no little value, in estimating the factors which go to make up the present economic and social situation, to have so clear, so frank, so unconscious a personal statement of the doc- trine of private wealth. We are not to regard it as an altogether authorized and representative statement. Some rich men would accept Mr. Carnegie’s premises who would scoff at his conclu- sion. While others, be it said to their honor, are carrying out his conclusion in a very conscien- tious and self-denying way, who are by no means able to take the full comfort of his premises, and regard themselves as the providential trustees of society. Still, for Mr. Carnegie’s uses, the two parts of the argument go together. If he is to preach this gospel of wealth to the rich, he must above all things make them feel the inevitableness of their lot. They must be made to realize that they are the necessary product of the system to which they belong. There must needs be the very rich; if not these, then others. Some persons cannot escape the responsibility of riches, however great at times may seem to them “the advantages of poverty.” The inevitable factor in society is not so certainly the poor as the rich. The rich ye have with you always.

But this necessarian view of extreme riches is not so obvious to all as to Mr. Carnegie. For while he is asking, and answering with so much courage and assurance, this question about the disposal of the vast surplus of private wealth, society is taking hold in very serious fashion of the other end of the problem, and asking why there should be such a vast surplus of private wealth. Mr. Carnegie’s scheme of redistribution is a most interesting one, as will be seen by ex- amining it more in detail, and, within the limits in which it is likely to be carried out, not without direct practical benefit, but it is in no sense a solution of the great social question which is stir- ring the mind and heart of this generation. And my present concern is that it should not be ac- cepted as such by ethical and religious teachers. For I can conceive of no greater mistake, more disastrous in the end to religion if not to society, than that of trying to make charity do the work of justice.

Mr. Carnegie’s first answer to the question of the disposal of the surplus of private wealth is that nothing above a competence should remain to a rich man’s family. The chief motive urged in the assertion of this principle is the protection of the family life of the rich. “I would as soon leave to my son a curse,” says Mr. Carnegie, “as the almighty dollar.” Family pride calls for the retention of fortune; the family welfare demands that the children should at any cost be guarded from idleness, and from the enervating and demoralizing effect of inherited wealth. One cannot refuse his sympathy with the sentiment which prompts this advice, though much loss of social momentum would be incurred by carrying it out, and though it would involve a very careful training of children born and reared in wealth if, at the death of the head of the family, they are to be reduced to a competence. It should be said that the essay inculcates “modesty in private ex- penditure” as a part of the doctrine of public benefaction.

Mr. Carnegie’s second answer is that fortunes should not be devised by will, partly be- cause of the uncertainty, attending all bequests, of actually reaching and accomplishing their ends, and partly because the act of bequeathing property is in itself destitute of any moral quali- ty.…

 

 

In Mr. Carnegie’s third answer he states his positive principle that all private wealth above a competence should be distributed back into society during the lifetime of the owner and maker of the fortune, and according to his direction; and then proceeds to show how this can be wisely done, specifying, as the proper objects of benevolence, universities, libraries, hospitals, parks, churches of the more costly type, and in the general those intermediate objects which en- rich a community without pauperizing individuals. Mr. Carnegie is stoutly opposed to technical charity or almsgiving, believing that, of every thousand dollars thus spent, nine hundred and fifty are unwisely spent.

This is the gospel of wealth; of which it may be said, in a word, that it is an heroic reme- dy for the preservation of families of wealth from the corrupting power of inherited riches; that, as respects the rich man, it is a call to self-denial, not only against the hoarding of riches, but also against the gratification of a large class of ambitions common to the very rich; but that in its rela- tion to society it is, if accepted as the mode of social improvement, the gospel of patronage. So- ciety, in its institutions of relief and of culture, in its improvements and refinements, would be- come the object of the bounty of the few, and rightly so, as Mr. Carnegie argues, because the rich benefactor can do better for the community than it would or could do for itself. Just as formerly it was contended that political power should be in the hands of the few, because it would be bet- ter administered, so now it is contended—I quote Mr. Carnegie’s words, slightly transferring them, but not changing their meaning —that “the millionaire is entrusted for the time being with a great part of the increased wealth of the community, because he can administer it for the com- munity far better than it could or would have done for itself.” This, of course, if accepted and carried out in any complete way, becomes patronage.

Probably, however, the first criticism which would be passed upon this scheme is that it could not be carried out to any such degree as to produce any appreciable effect in the way of social relief. The preaching of this gospel might be expected to reach the consciences and hearts of the few, perceptibly increasing the amount of public benefactions, and very likely resulting in the organization of societies … for cultivating the spirit of giving according to the increase of income. But it would manifestly fail to reach the much greater amount of irresponsible and really dangerous wealth. It would fall upon deaf ears as it addressed itself to the ambitious, the selfish, the profligate,—the really dangerous classes in modern society.

And it is hardly to be expected that the appeal would have the same effect upon those without as upon those within Mr. Carnegie’s own class of millionaires. Mr. Carnegie represents the self-made type, the type of bold, shrewd, masterful, and withal generous and public-spirited self-made rich men. Those, on the other hand, who represent inherited wealth seldom possess precisely these personal qualities, while they are usually possessed of quite different ambitions. He might have the honorable ambition to found a house. They are under conventional bonds to perpetuate their inheritance, an obligation which fails only under the incapacity to fulfill it, or under those temptations to vice which betray it.

But, allowing that the scheme is more practicable than it seems, then the criticism fol- lows, to which I have referred, that to the degree in which it becomes successful it amounts to patronage; and, in the long run, society cannot afford to be patronized. It is better for any com- munity to advance more slowly than to gain altogether by gifts rather than, in large part, by earn- ings. Within proper limits, the public is advantaged by the gifts of the rich, but if the method be- comes the accepted method, to be expected and relied upon, the decline of public self-respect has begun. There is a public public spirit to be cherished as well as a private public spirit.

 

 

But these criticisms do not reach the heart of the matter. They do not run as deep as the current thought. That, as I have intimated, is growing more and more intent upon one inquiry, Why should there be this vast amount of wealth in the hands of the few? The question is not, How shall private wealth be returned to the public? but, Why should it exist in such bewildering amounts? Mr. Carnegie’s gospel is really a belated gospel. It comes too late for a social remedy. What it does accomplish is to call attention to the fact of the enormous surplus of private wealth. The honest and courageous endeavor of a millionaire to return his fortune to society, and his call to his fellow-millionaires to do likewise, brings them, as a class, before the public, and puts the public upon a reckoning of the volume of wealth in their hands. Consciously or unconsciously, Mr. Carnegie has hit upon the great object-lesson in our economic civilization. It is not pauper- ism, conspicuous and grievous as that is, but the concentration of wealth. The most striking, and in many ways the most startling, feature of the economic situation is, not that the poor are grow- ing poorer,—that I doubt, except with those too low for computation,—but that the rich are be- coming so very rich. The question before us, be it remembered, is not that of capital, or of corpo- rate wealth, or of ordinary private wealth, but of extreme riches in the hands of the few,—the enormous concentration of wealth.

* * *

… [I]t is estimated that two thirds of the property of the United States is in the hands of one seventieth of the population. It also seems safe to assume that more than one half of the wealth of the country is in possession of less than fifty thousand families. …

The force of this reminder of the present and increasing concentration of wealth in Eng- land and America is intensified by one or two other facts bearing upon the character and use of a portion of this immense surplus. One fact is that of the growing amount of wealth in the form of demoralizing capital. The amount invested in the liquor traffic is the most evident example, of which it may be said that the whole sum is practically a corruption fund, to be used as the exi- gencies of the business may demand. A second fact is that of the growing amount of irresponsi- ble wealth, wealth that is in the hands of those who are incapable of its proper management as capital, but who may control it to private ends. I refer now especially to property left in large es- tates to women, a large percent of which becomes the object of cupidity to adventurers and for- tune-hunters. …

The criticism which has been offered upon the “Gospel of Wealth,” viewed as a method of social relief, supplemented by the facts presented showing the concentration of wealth, may suggest to some of my readers the direct question, What do you propose? I reply at once that the fact that I have taken issue with Mr. Carnegie’s method of relief does not necessitate on my part the proposal of another gospel with like confidence and fervor. I disclaim any obligation resting upon those who criticize to construct. The desire to ameliorate the social condition, by carefully devised theories or by philanthropic efforts, belongs to us all as good citizens. But the critical function belongs especially to those who are striving to fulfill their office as ethical or religious teachers. And it is the last function to be relinquished or exchanged in times of great constructive and speculative energy like the present. The ethical test must be applied constantly and unspar- ingly to all social theories.

Take, for example, the attitude of moral and religious teachers towards socialism. The betterment of outward condition, the change of environment upon which socialism insists, ap- peals at once to the sympathy of all who have at heart the improvement of their kind. But, how-

 

 

ever sympathetic may be one’s disposition, the question must be faithfully put, Is the betterment of condition sought in the interest of character or regardless of character? The assumption cannot be too easily accepted that improved character will follow improved condition. That will depend altogether upon the insistence which is placed upon character as the end and object of changed condition. The moral result will not follow of itself. It must be provided for in the very process. The ethical questioning, therefore, which has begun to arrest the hitherto materialistic develop- ment of socialism, is thoroughly wholesome. It is in the interest of socialism. For whatever suc- cess is to attend the socialistic theory will depend ultimately upon what socialism actually holds of moral, not simply of material, improvement. Any changes which may take place from indi- vidualistic to socialistic methods will take place because they ought to,—ought, I mean, econom- ically, which in the present instance is the same as saying ought ethically. We are not to expect that at some given date society will give individualism notice to move out with its institutions and machinery, and summon socialism to move in with its institutions and machinery. Society is too far advanced for that kind of experimentation. It is, indeed, liable to sudden movements, to some political or financial coup d’état, but the great social conditions of the future, whatever they may be, will come because they have earned the moral right to be. The justification of social change, the inward necessity of social progress, is the ethical principle, which in the last analysis is justice. That we must believe if we believe in progress. That we have the right to believe from the testimony of history.

But while disclaiming the necessity of advancing or of advocating any theory of social re- lief because of the criticism which has been ventured, I desire to call attention briefly to certain tendencies, of an ethical motive and character, which are operating to prevent the further concen- tration of wealth, or to recover to society so much of wealth as may now be wrongfully or waste- fully in the possession of the few.

One of the most marked tendencies, which has in it the greatest promise in practical re- sults, is the present ethical tendency of political economists. The ethical advance in political economy has been marked by the change of subject upon which emphasis has been placed, upon the change, that is, from production to distribution, and still later to consumption. The change began with the bold assertion of John Stuart Mill, that the same non-moral laws which govern production do not govern distribution, that distribution is to a large degree governed by laws which are under human control, and are therefore moral.

The laws and conditions of the production of wealth partake of the character of

physical truths. There is nothing optional or arbitrary in them. … It is not so with the dis- tribution of wealth. That is a matter of human institution solely. The things once there, mankind, individually or collectively, can do with them as they like. They can place them at the disposal of whomsoever they please, and on whatever terms. … The distribution of wealth, therefore, depends on the laws and customs of society. The rules by which it is determined are what the opinions and feelings of the ruling portion of the community make them, and are very different in different ages and countries, and might be still more different if mankind so chose.2

The ethical progress involved in Mills’s position may be estimated by noting the follow-

ing questions, set forth by the latest political economist of note, Professor Alfred Marshall. These questions, many of which would have been ruled out of the discussion twenty years ago, are de- clared by Professor Marshall to be “problems of special urgency”: 2 John Stuart Mills, Political Economy, Vol. I, pp. 257 – 8.

 

 

Taking it for granted that a more equal distribution of wealth is to be desired,

how far would this justify changes in the institutions of property, or limitations of free en- terprise, even when they would be likely to diminish the aggregate of wealth? In other words, how far should an increase in the income of the poorer classes and a diminution of their work be aimed at, even if it involved some lessening of national material wealth?

How ought the burdens of taxation to be distributed among the different classes of society?

What are the proper relations of individual and collective action in a stage of civilization such as ours? … What business affairs should be undertaken by society itself acting through its government, imperial or local? Have we, for instance, carried as far as we should the plan of collective ownership and use of open spaces, of works of art, of the means of instruction and amusement, as well as of those material requisites of a civilized life, the supply of which requires united action, such as gas, and water, and railways? …

When government does not itself directly intervene, how far should it allow indi- viduals and corporations to conduct their own affairs as they please? How far should it regulate the management of railways and other concerns which are to some extent in a position of monopoly, and again of land and other things, the quantity of which cannot be increased by man? Is it necessary to retain in their full force all the existing rights of property; or have the original necessities, for which they were meant to provide, in some measure passed away?3

A still further advance is indicated in the recognition of the moral element involved in

consumption. Consumption represents the growth of want in the individual, and this growth of want is the chief stimulus to social progress and the measure of it. Here lies the moral principle in all measures for the reduction of working time. Time is really worth more to the workingman than money. …

Another tendency, of immediate practical effect, is seen in the increased care about legis- lation, which may encourage or allow the further concentration of wealth. Many fortunes in the past have been due to legislation favoring private interests. … A city cannot afford to be wasteful of its rights in the growth of the “unearned increment.” It is a hopeful sign that the old indiffer- ence of citizens in the disposal of valuable franchises is passing away. I do not say that they are not still to be disposed of, but they are no longer to be had for the asking, and they cannot be so easily gained by corruption.

Neither can one overlook the tendency to intercept wealth on its way into private hands through corporate bodies, by enlarging the economic functions of the municipality and the state. … American cities have had too serious a struggle to guard the business interests necessarily committed to the city corporation to be eager to entrust new and more unrestricted interests to them. Still the tendency toward the use of municipalities for business purposes is beginning to show itself in this country; and it may be that the necessity for their increased use in this direc- tion will help to their purification. If the economic function of the municipality really ought to be increased, if it can naturally do a part of the business now in private hands at great gain to indi- viduals, it is not unreasonable to expect that citizens will arouse themselves and see to it that the affairs of the city are conducted on business principles. And we may come in time to show a pride in all that pertains to municipal administration and improvement like that which character- izes the better cities of England and the Continent.

3 Alfred Marshall, Principles of Economics, Vol. I, pp. 96 – 7.

 

 

The growing disposition to apply the principle of taxation very vigorously to estates rep- resents in a pronounced way the tendency to restrain the further concentration of wealth. This principle meets with Mr. Carnegie’s unqualified approval. He refers to it as a “cheering indica- tion of the growth of a salutary change in public opinion. … Of all forms of taxation this seems the wisest. Men who continue hoarding great sums all their lives, the proper use of which for public ends would work good to the community, from which it chiefly came, should be made to feel that the community, in the form of the state, cannot thus be deprived of its proper share. By taxing estates heavily at death, the state shows its condemnation of the selfish millionaire’s un- worthy life.”

This principle has now become well established in legislation. It is recognized in England under the term “death duties.” …

But the theory of a progressive tax on inheritances carries with it logically the theory of a progressive income tax. There are minor differences; but there is no valid reason why a great for- tune should not come under the same principle with a great estate.

Much stress cannot as yet be laid upon the actual results gained by cooperation, profit- sharing, and various other methods for effecting a better distribution of wealth while it is being made, but they all show the tendency upon which I am dwelling. And no one can forecast the possibilities which they represent. I have often thought that such a method of better distribution as profit-sharing is like a channel cut to change the bed of a river. In ordinary times it seems of little use. The overflow may fill it, but its waters are stagnant. The next flood may fill it with a rushing current, and make it thenceforth the bed of the stream. Certainly no one can foretell what one, if any, of the present experimental methods for the better distribution of wealth under pro- duction will yet be adopted, but they all have a certain capacity, and above all else they evince a certain sense of obligation or necessity to effect the end they seek to accomplish.

It has been my object in this article to call attention to the moral significance of great for- tunes, to show the ethical bearing of the amassing of private wealth. I have not cared to enter the field of the methods of social relief and reform. Methods belong to economists and legislators. The concern of moral and religious teachers is with principles. They have to do legitimately with the ethical factor which is put into, or which is left out of, all proposed reforms. They are bound to test all theories which are offered in aid of society, and to test them all the more if they are of- fered with moral earnestness and under religious names. They have the right to ask of any new scheme whether it will leave society better or worse in the end for its adoption. My criticism of Mr. Carnegie’s scheme has been that, to the degree in which it is organized and made the ruling method of adjusting wealth to society, it becomes a vast system of patronage, than which nothing can in the final issue create a more hopeless social condition. And further, that the assumption upon which it rests, that wealth is the inevitable possession of the few, and is best administered by them for the many, begs the whole question of economic justice now before society, and rele- gates it to the field of charity. But charity, as I have claimed, cannot solve the problems of the modern world. And the point is reached at which this claim is seen to be valid, whenever any scheme is proposed for the redistribution of wealth through charity, leaving the question of the original distribution of wealth unsettled, or settled only to the satisfaction of the few. What the ethical question of tomorrow in the economic world may be I know not. But the ethical question of today centers, I am sure, in the distribution rather than in the redistribution of wealth. I would hinder no man’s gifts in the largest charity; I would withhold no honor from the giver; but I would accept no amount in charity as a measure of the present social need, or in settlement of the present economic demand.

 

  • Carnegie Wealth
  • Tucker Gospel of Wealth Edited