Welfare Capitalism- Part Four- Carnegie
Andrew Carnegie (1860-1919)
Iron & Steel
Grew up poor in Dunfermline, Scotland. His family shared a single room with another family. His mother received letters from her sister who had moved to America. So the Carnegie family got on a ship from Glasgow to New York. It was tightly packed and unsanitary.
At this time there had yet to be any immigration laws and there was no Ellis island to check into.
The family made their way to settle in Pittsburgh, Pennsylvania. At 13 he began working at the same factory as his father. A few years later he began working as a telegraph operator.
In 1859, at 24, Carnegie's mentor told him about guaranteed investment. This information was obtained through "insider trading" which is considered unfair today and is illegal. However, it wasn't illegal in 1859. Carnegie told his parents about the opportunity and together they raised $500 and they saw great profits on the investment. "Self-Made" man. Carnegie then reinvested his profits and made a handsome sum.
Carnegie invested in sleeper trains. Allowing people to travel hundreds of miles overnight. In 1864 he invested in oil and saw massive profits.
During the civil war, Carnegie personally rode in the trains transporting the troops to the first battle of the war. After the war, he sold his rail assets and bought into ironworks and steelworks. By 1889, the U.S. output of steel exceeded that of the UK, and Carnegie owned a large part of it.
Carnegie's success was also due to his convenient relationship with the railroad industries, which not only relied on steel for track, but were also making money from steel transport. The steel and railroad barons worked closely to negotiate prices instead of free-market competition determinations. The richest industrialists supported each other to squeeze out the competition.
Besides Carnegie's market manipulation, United States trade tariffs were also working in favor of the steel industry. Carnegie spent energy and resources lobbying congress for a continuation of favorable tariffs from which he earned millions of dollars a year. He was paying the government to ensure buying steel from overseas was heavily taxed. Carnegie tried to keep this information concealed, but legal documents released in 1900.
His company was the first to be worth $1 billion. In 1901 he retired with $225.64 million (in 2021, $7.35 billion).
Johnstown Dam Tragedy
Carnegie owned a dam in Pennsylvania. Despite Carnegie's millions, the dam is kept in poor condition. Everytime a leak happened, it was patched and forgotten about. On one fateful day in May, a heavy rainstorm put too much stress on the dam and the whole thing burst open just before 3pm. A massive and rapid flood rushed down the valley and hit the town of South Fork. It caused millions of dollars worth of damage, washing away homes and roads but also killed 2,209 people. Carnegie and his business partner, Henry Clay Frick received a lot of criticism.
Homestead Strike
Both men would receive more public criticism 3 years later.
Carnegie and his partner owned a factory in Homestead, Pennsylvania. Frick announced pay cuts for the workers of the factory and the workers decided to strike.
If work conditions are unsafe and jobs are unfair, how do you change that?
Is it acceptable for workers who refuse to work to stop others working too?
https://youtu.be/SO-CGn0Ig-U
Philanthropy
Carnegie developed a concern for his public reputation. He didn't think wealth was worth anything if people thought badly of you.
Although publicly he tried to blame his business partner for his controversy and the death toll. Privately, he felt shame.
His mind turned toward giving back to the world.
"I propose to take an income no greater than $50,000 per annum! Beyond this I need ever earn, make no effort to increase my fortune, but spend the surplus each year for benevolent purposes! Man must have no idol and the amassing of wealth is one of the worst species of idolatry! No idol is more debasing than the worship of money!"
Carnegie constructed swimming-baths for the people of his hometown in Dunfermline. He also founded the construction of the library of Dunfermline.
In total, Carnegie funded some 3,000 libraries, located in 47 US states, and also in Canada, Britain, Ireland, Australia, New Zealand, South Africa, the West Indies, and Fiji.
When Carnegie tried to make amends to his business partner, Henry Clay Frick, who he had blamed for bad press and controversy, he offered to meet up with him. Frick refused the invitation and told Carnegie, "Tell him, I'll see him in hell."
Iron & Steel
Grew up poor in Dunfermline, Scotland. His family shared a single room with another family. His mother received letters from her sister who had moved to America. So the Carnegie family got on a ship from Glasgow to New York. It was tightly packed and unsanitary.
At this time there had yet to be any immigration laws and there was no Ellis island to check into.
The family made their way to settle in Pittsburgh, Pennsylvania. At 13 he began working at the same factory as his father. A few years later he began working as a telegraph operator.
In 1859, at 24, Carnegie's mentor told him about guaranteed investment. This information was obtained through "insider trading" which is considered unfair today and is illegal. However, it wasn't illegal in 1859. Carnegie told his parents about the opportunity and together they raised $500 and they saw great profits on the investment. "Self-Made" man. Carnegie then reinvested his profits and made a handsome sum.
Carnegie invested in sleeper trains. Allowing people to travel hundreds of miles overnight. In 1864 he invested in oil and saw massive profits.
During the civil war, Carnegie personally rode in the trains transporting the troops to the first battle of the war. After the war, he sold his rail assets and bought into ironworks and steelworks. By 1889, the U.S. output of steel exceeded that of the UK, and Carnegie owned a large part of it.
Carnegie's success was also due to his convenient relationship with the railroad industries, which not only relied on steel for track, but were also making money from steel transport. The steel and railroad barons worked closely to negotiate prices instead of free-market competition determinations. The richest industrialists supported each other to squeeze out the competition.
Besides Carnegie's market manipulation, United States trade tariffs were also working in favor of the steel industry. Carnegie spent energy and resources lobbying congress for a continuation of favorable tariffs from which he earned millions of dollars a year. He was paying the government to ensure buying steel from overseas was heavily taxed. Carnegie tried to keep this information concealed, but legal documents released in 1900.
His company was the first to be worth $1 billion. In 1901 he retired with $225.64 million (in 2021, $7.35 billion).
Johnstown Dam Tragedy
Carnegie owned a dam in Pennsylvania. Despite Carnegie's millions, the dam is kept in poor condition. Everytime a leak happened, it was patched and forgotten about. On one fateful day in May, a heavy rainstorm put too much stress on the dam and the whole thing burst open just before 3pm. A massive and rapid flood rushed down the valley and hit the town of South Fork. It caused millions of dollars worth of damage, washing away homes and roads but also killed 2,209 people. Carnegie and his business partner, Henry Clay Frick received a lot of criticism.
Homestead Strike
Both men would receive more public criticism 3 years later.
Carnegie and his partner owned a factory in Homestead, Pennsylvania. Frick announced pay cuts for the workers of the factory and the workers decided to strike.
If work conditions are unsafe and jobs are unfair, how do you change that?
Is it acceptable for workers who refuse to work to stop others working too?
https://youtu.be/SO-CGn0Ig-U
Philanthropy
Carnegie developed a concern for his public reputation. He didn't think wealth was worth anything if people thought badly of you.
Although publicly he tried to blame his business partner for his controversy and the death toll. Privately, he felt shame.
His mind turned toward giving back to the world.
"I propose to take an income no greater than $50,000 per annum! Beyond this I need ever earn, make no effort to increase my fortune, but spend the surplus each year for benevolent purposes! Man must have no idol and the amassing of wealth is one of the worst species of idolatry! No idol is more debasing than the worship of money!"
Carnegie constructed swimming-baths for the people of his hometown in Dunfermline. He also founded the construction of the library of Dunfermline.
In total, Carnegie funded some 3,000 libraries, located in 47 US states, and also in Canada, Britain, Ireland, Australia, New Zealand, South Africa, the West Indies, and Fiji.
When Carnegie tried to make amends to his business partner, Henry Clay Frick, who he had blamed for bad press and controversy, he offered to meet up with him. Frick refused the invitation and told Carnegie, "Tell him, I'll see him in hell."
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