Star Spangled Scotsman gives it all away

Brian Balogh: Today on the show, we’ll be looking at the figure of the American millionaire. How did millionaires become iconic figures in American society?

Ed Ayers: We’ll be discovering the true story behind the origins of the board game that aims to turn us all into millionaires through real estate speculation.

Nathan Connolly: And we’ll be hearing more about Mr. Jeremiah Hamilton, of course.

Brian Balogh: First, in 1889, one of the wealthiest men in America publicly announced that he was going to give away all his money.

Nathan Connolly: Not just that. In a pair of essays which together became known as “The Gospel of Wealth,” Andrew Carnegie argued that the wealthy had a moral duty to give it away.

Speaker 7: “The Gospel of Wealth” by Andrew Carnegie. “The problem of our age is the proper administration of wealth.”

David Nasaw: I’ve read “The Gospel of Wealth” 20 times, 50 times. I was giving a class to high school teachers and they wanted a primary source so I read it again, and I came out of this last reading just astounded. He says, in “The Gospel of Wealth,” capitalism generates huge inequality, and that’s the way it’s got to be, so what do we do? The capitalists have to start giving back their money.

Brian Balogh: That’s David Nasaw, the biographer of Andrew Carnegie. When Andrew Carnegie sold his steel company to J.P. Morgan in 1901, the Carnegie Steel Company was valued at more than $400 million. Carnegie had been giving his money away for three decades, most famously in the form of free public libraries, which he gifted to 2,500 communities around the world.

David Nasaw: The scope of his philanthropy is extraordinary. He thinks the people in Pittsburgh should be able to see a dinosaur so he sends an expedition to Arizona to dig up dinosaurs. Then, he thinks the people of the world should see dinosaurs so he creates molds from his dinosaur bones in a warehouse and creates fake dinosaurs that he gives to museums all over the world. He thinks people should have access to classical music. He buys pipe organs for churches so that working people, when they go to church, are going to get good classical music. He creates what he calls bath house, but which are really gyms, meeting rooms and community centers. Later in life, he becomes the number one peace activist probably in the world.

Brian Balogh: What drove his radical philanthropy?

David Nasaw: Let me tell you Carnegie begins. Carnegie’s fortune is made by his mother because his mother decides to relocate the family from Dunfermline, Scotland. Mrs. Carnegie, understanding that her boys, Andrew and his younger brother, had no future in Dunfermline, put them on a boat, borrowed some money, and took them to what was then known as Allegheny City, which is today part of Pittsburgh and was then just over the river in Independent City.

David Nasaw: Carnegie knew damn well that, as a little man, he was maybe 4’10”, 4’11”, who didn’t dig the coal, who didn’t mine the iron, who didn’t run the railroad trains, who didn’t stoke the ovens or keep the ovens, who wasn’t a barrel man who moved the molten steel to the molds, he knew that wealth is not created by the capitalist, by the entrepreneur, but by the larger community. He knew damn well that, if his mother hadn’t moved him to Pittsburgh, where within 50 miles there was iron and coal, and Pittsburgh, which was the gateway to the west, he would have been a shopkeeper or someone. Probably a successful shopkeeper, but a shopkeeper.

David Nasaw: He understood, as well, that, if he had not arrived in America before the Civil War, come of age after the Civil War, when the population is expanding and moving west, there would have been no need for the trains and for his steel. From a very early age, he understands that this money doesn’t belong to him.

Speaker 7: “Serious obstacles to the improvement of our race is indiscriminate charity. It were better for mankind that the millions of the rich were thrown into 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.”

David Nasaw: Everybody who has written about Carnegie says that, when he becomes a philanthropist, he becomes a softer, nicer, gentler, more humane individual. The opposite is true. Carnegie knows that he’s going to give away his fortune from very early on. Before he’s even got that fortune, he’s going to give it away. What that means is he feels that he is entitled to exploit his workers to create a larger fortune to give back to the community.

Brian Balogh: Now, I’m sure he doesn’t call it exploiting. though, does he? In his own mind, is that the calculation he’s making?

David Nasaw: Boy, it’s a good question. Yes. Yes, I think so. There’s this great scene, which I write about in my biography, this wonderful scene when he returns to Pittsburgh to dedicate one of this libraries. For the ceremony, the mayor is there and the governor and the leaders of church and schools and universities. There’s a procession and they all line up in this library. He gives his prepared speech and, at the end of the speech, he looks. All the way in the back … He looks out and he says, “I see workers here.” He said, “Some of you may work for my steel mills.” He said, “You’re thinking to yourselves, why didn’t he pay us more? He’d have less to give away and might have had to build a less grand library, but why didn’t he give us our fair share?

David Nasaw: “I’ll tell you why. Because, if I had raised your wages, you would have spent it on a better cut of meat, maybe something to drink that you shouldn’t be drinking.” He said, “But that’s not what you need. What you need are libraries, museums, concert halls.” He said, “It is for the best, for the community and for your children, that it works out this away.”

David Nasaw: He knew what he was doing and, as he becomes a philanthropist, he becomes more exploitive. He institutes a 12 hour day. He puts his workers on shifts so they work 6 1/2 days. They get a half day off so that they can switch from days to nights. They work 12 hours. In order to pay his workers as little as possible, so that he does not have to improve conditions in the plant that result in untold injuries and deaths from workplace accidents, he’s got to break the union, and he breaks the union.

Speaker 7: “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.”

David Nasaw: The apex of Carnegie’s influence, I think, comes in the last 20 years, when Vartan Gregorian becomes the president of the Carnegie corporation. He preaches the gospel of philanthropy. He brings it to the west coast and preaches it, and does so brilliantly to Gates, to Buffet, to a variety of fabulously wealthy new wealth, and convinces them that this is their responsibility, to give away their money as Carnegie did.

Brian Balogh: So it’s a delayed consequence by almost 100 years.

David Nasaw: Yeah. There’s a delayed consequence, but … You can understand why philanthropy would appeal to millionaires, as it appealed to Carnegie, because they are convinced, as Carnegie was, of their intrinsic brilliance, that, if they’ve made these gazillions of dollars, they have a will, they have a capacity, they have a series of intellectual and cognitive skills, that, if they turn to spending that money to save the universe, who better than they?

David Nasaw: At the same time that trust in government declines, in large part because these millionaires are saying, “Regulation is bad for us. Big government is bad for the people,” so the importance and the rhetoric of philanthropy and the philanthropic sector is ramped up. Carnegie always claimed that he was an American through and through and he loved democracy and he hated the hereditary dynasties of Europe and the kings and queens should be eliminated and the people rule, but he didn’t believe in rule by the people, he believed in rule by the fittest who had survived. How did they do that? By bypassing government through philanthropy.

David Nasaw: When you look at the ways in which American society is developed, with philanthropy creating our universities, our colleges, our museums, our concert halls, I can go on and on, in ways that were unimaginable in Europe, where the government sponsored these cultural and artistic enterprises, that’s the gift of Andrew Carnegie.

Brian Balogh: David Nasaw is professor of history at the City University of New York, and the author of “Andrew Carnegie,” published by the Penguin Press.