Wealth
Andrew Carnegie
[Reprinted from the North American Review,
No. CCCXCI, June, 1889]
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. The conditions of human 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 to-day where civilized man then was. When visiting the
Sioux, I was led to the wigwam of the chief. It was just like the
others in external appearance, 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 to-day 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. The "good old times " were not good old
times. Neither master nor servant was as well situated then as to-day.
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 there fore to be accepted and made the best of. It is a
waste of time to criticise 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
the master, and therefore subject to the same conditions. When these
apprentices rose to be masters, 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 equality, 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. To-day 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 produced 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
between 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 strictest 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. Human 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 environment, 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 progress 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 commercial
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 possessed 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 net 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 happiness, not from laboring for self, but for each
other,--even admit all this, and a sufficient answer is, This is not
evolution, but revolution. It necessitates the changing of human
nature itself a work of oeons, 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 direction 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 families. 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 administered
during their lives by its possessors. Under the first and second modes
most of the 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 unimpaired. The
condition of this class in Europe to-day teaches the futility of such
hopes or ambitions. The successors have become impoverished through
their follies or from the fall in the value 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 question 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 teaches 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 living 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 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.
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 Pennsylvania 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; 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 at- tract 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 requiring only the further evolution of existing conditions, not
the total overthrow of our civilization. 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 portion 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
lifetime 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 other cause of delay
could have interfered with his aims. But let us assume that Mr.
Tilden's millions 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.
Considering 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 circulate in small sums
through the hands of the masses? Even the most strenuous advocate of
Communism must entertain a doubt upon this subject. Most of those who
think will probably entertain 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 adopting 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 propriety ; but, nevertheless,
these are verities, well known although undefinable. Public sentiment
is quick to know and to feel what offends these. So in 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 improvement 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 to-day, 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 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 him- self 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 themselves; 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, except in rare cases, seldom require assistance.
The really valuable men of the race never do, except in cases of
accident or sudden change. Every one 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
necessarily 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
aspiring 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; intrusted for a season with a great part of the
increased wealth of the community, 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 iii which it is clearly seen that there is no mode of disposing
of surplus wealth creditable to thoughtful and earnest 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
disgraced."
Such, in my opinion, is the true Gospel concerning Wealth, obedience
to which is destined some day to solve the problem of the Rich and the
Poor, and to bring "Peace on earth, among men Good-Will."
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