Andrew Carnegie helped build America through the innovations he introduced in the steel industry. Apart from being a steel tycoon, he is remembered as a philanthropist who gave away most of his wealth. However, the profits he gave away are said to be built on the backs of workers who clamorred for fair wages and safe work environments. Let’s take a glimpse at the life of the man who left a conflicting legacy.
His Family Influenced Him Greatly
Carnegie’s philanthropy and involvement in uplifting the working class is not a coincidence. We need not look far for the influences that shaped his worldview.
His birthplace, Dunfermline, was once Scotland’s historic medieval capital. Carnegie’s father, William, was one of the handloom weavers who relied on its fine linen industry, however the introduction of the power loom has left home-based weavers like him unable to compete. Back then, products were produced in a limited amount of goods in home-based businesses. The development of new methods of production like the power loom across Europe, led to the creation of factories in centralized locations such as industrial towns and cities. This prompted Will to join the Chartist movement, which believed that if working men had a say in government, they would make laws that would improve their working conditions. Sadly, the Carnegies could no longer cope with the loss of their main source of income. After much urging from his wife Margaret Carnegie, William brought his family, including Andrew Carnegie and his younger sibling Thomas, to the United States in 1848 in hopes of better opportunity. They joined relatives and friends in Allegheny, Pennsylvania which is now part of Pittsburgh.
Another family member who has greatly influenced him is his uncle George Lauder Sr. He wrote about his uncle’s impact in his autobiography:
“I may mention here a man whose influence over me cannot be overestimated, my uncle Lauder, George Lauder’s father. . . He possessed an extraordinary gift of dealing with children and taught us many things.”
Andrew Carnegie’s uncle, George Lauder, was a major influence on his upbringing. Carnegie credited Lauder with instilling in him a lifelong love of Scottish heroes such as William Wallace, Robert the Bruce, Walter Scott, and Robert Burns.
A role model to Carnegie, George Lauder was a philanthropist who dedicated his life to improving the lives of the people of Dunfermline, Scotland. Dunfermline used to suffer from a poor water system which made the public water unsafe to drink. As a member of the local town council, George led a successful campaign to bring fresh water from the Ochil Hills to Dunfermline, which improved the health and well-being of the community. His efforts resulted in a system that still provides Dunfermline with safe tap water today. Also a believer in education for the youth, particularly those who were involved in the more manual trades, he founded Lauder Technical College with financial help from his nephew. Later on, his nephew Andrew Carnegie also gave back to Dunfermline by establishing the Carnegie Dunfermline Trust in 1903 which has been giving grants to local initiatives for over a hundred years today.
His First Job Paid Only $1.20 A Week
Though Andrew was later called the richest man in the world, he first worked as a “bobbin boy” at a cotton mill when they immigrated to the U.S. He would work before sunrise until dark delivering bobbins to the workers at the looms for $1.20 per week, $46.64 in current times. He was then hired a year later as a messenger at a local telegraph company where he taught himself how to use the equipment and was eventually promoted to telegraph operator. Because of this new skill, he was able to get a job at Pennsylvania Railroad where he became superintendent before turning 25.
Carnegie invested his earnings and took out a loan to invest in the Woodruff Sleeping Car Company, which paid him $5,000 a year in dividends. He then facilitated a merger between Woodruff and the Pullman Palace Car Company, one of his first major business deals, and set the stage for his future success.
He Maximized Profits By Keeping Business Costs Low
During the Civil War, Carnegie was assigned to be superintendent of Military Railways while working at Pennsylvania Railroad. Carnegie realized that the railroad and the industries they served were essential to America’s success, and developed an interest in producing iron and steel. Anticipating the future demand for iron and steel following the economic expansion after the Civil War, Carnegie left the Pennsylvania Railroad in 1865 and started managing the Keystone Bridge Company. The company’s services include building steel, wrought iron, wooden railway and road bridges. Significant contracts were awarded to the company in its early years of business, including prominent crossings of the Ohio River, as well as a crossing of the Mississippi River at St. Louis.
At age 38, he focused his attention on steel and founded the J. Edgar Thomson Steel Works, which would eventually become Carnegie Steel Company. Andrew Carnegie adapted the ‘vertical integration’ style of managing his business. At that time, the ‘horizontal integration’ of expanding a business was more common, wherein companies grow by acquiring another company in the same industry. But with vertical integration, Carnegie controlled every aspect of his product including the steel mills, the mines, and even transportation wherein his company had its own ships and railways to transport the steel they produced. Carnegie also bought a controlling interest in Henry Clay Frick’s coke business. Coke is a key ingredient in steelmaking, which Frick owned a lot of. In 1892, Carnegie combined his companies into one company, Carnegie Steel Co., and made Frick the chairman. The combination of smart business decisions and bringing in a strategic partner made his company more efficient than any other manufacturing company of the time. As one can observe, Carnegie was ruthless in keeping his costs low and he managed his business with this motto in mind: “watch costs, and the profits take care of themselves.”
Though this strategy was extremely effective in increasing profits, it’s not without its consequences. On July 1, 1892, the contract between the union of the Homestead steel mill workers and Carnegie Steel was set to expire. Management proposed a wage cut for the union workers, which was understandably rejected. The union workers knew that the move was a preparation to replace them with nonunion workers. In retaliation, thousands of workers along with their families stormed the steel plant in Homestead, Pennsylvania. Carnegie’s business partner Henry Clay Frick sent 300 armed Pinkertons, private security guards for hire from the Pinkerton National Detective Agency, to quash the strike. The encounter resulted in a bloody battle, leaving at least three Pinkertons and seven workers dead with many injured.
He Was An Early Adopter Of New Technologies.
Unlike his father, Andrew Carnegie wholeheartedly embraced emerging technology and constantly led his companies to the forefront of innovation and profitability. During a trip to Great Britain, Carnegie learned about the Bessemer process, invented by British inventor Henry Bessemer, which allowed steel to be produced more cheaply and efficiently on a large scale. The Carnegie Steel Company was one of the first steel plants in the United States to use this process. Mostly attributed to Carnegie’s wins in the industry, the American steel industry’s output surpassed that of Great Britain, the top exporter of steel back then, for the first time in 1890.
The Carnegie Steel Company’s achievements helped the United States build its infrastructure with their cheaper and more efficient production. They contributed in building bridges like the iconic Brooklyn Bridge in New York City and skyscrapers, including the First Skyscraper in the World, the “Home Insurance Building” in Chicago, Illinois.
He Funded The Construction Of 2,509 Libraries Around The World
Of these, 1,795 were built in the United States, including 1,687 public libraries and 108 academic libraries. The remaining libraries were built in Europe, South Africa, Barbados, Australia, and New Zealand. But why libraries?
Young Carnegie recognized the importance of education and took advantage of a personal library Colonel James Anderson opened to local “working boys” — a rare opportunity at the time. The colonel served during the War of 1812 and became a businessman after it ended. The knowledge Andrew Carnegie gained voraciously reading at the library, spending time with the colonel and like minded peers provided an invaluable edge as he rose through the ranks in his job and eventually steel empire. In his autobiography, he acknowledges the benefits he and his fellow “working boys” gained from the generous opportunity:
“John Phipps, James R. Wilson, Thomas N. Miller, William Cowley–members of our circle–shared with me the invaluable privilege of the use of Colonel Anderson’s library. Books which it would have been impossible for me to obtain elsewhere were, by his wise generosity, placed within my reach; and to him I owe a taste for literature which I would not exchange for all the millions that were ever amassed by man. Life would be quite intolerable without it. Nothing contributed so much to keep my companions and myself clear of low fellowship and bad habits as the beneficence of the good Colonel.”
Apart from the public libraries, known as the “Carnegie Libraries” he funded between 1883 and 1929, he also founded Carnegie Mellon University, formerly Carnegie Tech. He started the school so working-class men and women of Pittsburgh could learn practical skills, trades and crafts that would set them up in their careers. Benefitting not only their lives, but also their communities.
He Was a Staunch Advocate For World Peace
Andrew Carnegie shifted his focus in pursuing world peace in his later years. He was convinced that international laws and mediation are effective means to stop wars from happening in the first place. He supported the founding of the Peace Palace in The Hague in 1903 and in 1910. The Peace Palace houses international organizations dedicated to promoting peace and justice through law such as the International Court of Justice (ICJ), the Permanent Court of Arbitration (PCA), the Hague Academy of International Law, and the Peace Palace Library.
He also gave $10 million to start the Carnegie Endowment for International Peace, aiming to “hasten the abolition of international war,”. Today, it continues to provide analysis on ‘key topics and regions, democracy and governance, nuclear, sustainability and geopolitics, global institutions, technology, and subnational regions’. Since its establishment, the Carnegie Endowment has made significant contributions to global cooperation through its research and initiatives. For example, in the 1940s, it persuaded the U.S. delegation to the United Nations to include an amendment to the draft UN charter that established the permanent UN Commission on Human Rights. In the 1970s, it developed a long-term agenda for reducing nuclear security risks. And following the September 11, 2001, attacks, it assessed and helped shape the U.S. response to the threat of terrorism.
Andrew Carnegie spared no effort to achieve world peace until World War I broke out. He was disappointed that his efforts to prevent World War I had failed, and he died in August 1919, two months after the signing of the Treaty of Versailles, which ended the war.
He Was Unable To Give Away His Entire Fortune.
Even though Andrew Carnegie was very generous, he had not been able to give away his entire fortune. After giving away $350 million, he still had $30 million remaining, which went into the Carnegie Corporation of New York’s endowment. Buried at Sleepy Hollow Cemetery in North Tarrytown New York, his gravestone reads: “Here lies a man who knew how to enlist the service of better men than himself.”
Though Andrew Carnegie remains a controversial figure, his work and philanthropy continue to have a positive impact on the world today. However, it is important to acknowledge his mistreatment of his workers and opposition to labor unions and his role in the Homestead Strike, especially given the fact that his father also suffered a similar loss of income in the past. Despite these decisions that affected his legacy, his contributions to education, world peace, and other social causes should not be overlooked.