Back To CourseHistory 104: US History II
14 chapters | 111 lessons | 10 flashcard sets
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Alexandra has taught students at every age level from pre-school through adult. She has a BSEd in English Education.
Between the Civil War and the beginning of the 20th century, America experienced a Second Industrial Revolution, a period of tremendous growth in technology, industry and the economy. With favorable government policies, it was the era of big businesses that competed for monopolies and any other market advantage. The men who ran these mega-corporations were sometimes called Captains of Industry for their innovative systems of management, production and organization, but they were also less admirably called Robber Barons for their anti-competitive practices and exploitative relationship with their employees - perfect examples of why the late 1800s were dubbed by writer Mark Twain as the 'Gilded Age'.
It's tempting to judge their practices against modern laws and business ethics. But, don't forget that corporate tycoons in the late 19th century were blazing new trails in the business world without many examples to follow, and they were largely behaving in accordance with the laws of the day in an era of laissez-faire (or hands-off) government. Yes, they were super-rich, corporate fat cats who lived lavishly, sometimes at the expense of others, but they were also unbelievably generous, giving away millions of dollars to organizations and individuals.
Their names are well-known to Americans even today, especially because of the institutions they established: John D. Rockefeller, Jay Gould, J.P. Morgan, Andrew Mellon, Cornelius Vanderbilt and J.J. Astor. Perhaps none represent the Gilded Age as clearly as Andrew Carnegie.
Andrew Carnegie immigrated to the United States from Scotland in 1848 when he was 13 years old and immediately went to work to help support his family. His career progressed from being a bobbin boy in a textile factory to becoming a messenger boy in a telegraph office, then an operator, and advancing through the office ranks of the Pennsylvania Railroad Company until he was superintendent of the railroad's western division. The upper management included the 20-year-old Carnegie in their insider trading tips, helping him make profitable investments and begin building capital. Today, this kind of activity could land you in jail, but things were different back then.
During the Civil War, he shifted his focus from railroads to ironworks, started his first company and soon held a vertical monopoly in the steel industry - that's a business tactic that eliminates middlemen from the production line. When adjusted for inflation, Andrew Carnegie was the second richest man ever in America and the fourth wealthiest man in the recorded history of the world.
Although Carnegie owned corporations that were involved in bloody labor disputes over wages (and other controversies), he may be best known for his efforts to give away his money in ways that no one had ever heard of before. In 1889, he published an essay commonly called 'The Gospel of Wealth', in which he proclaimed that workers had the right to unionize and demand higher wages and that rich people had a moral duty to give away whatever money they didn't need to support their families. Here's an excerpt from that text:
'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.'
What do you think about those ideas? On the one hand, they start out sounding so generous. And then you get to the end, and it sounds so condescending. This is the result of a philosophy sometimes called Reform Darwinism. Charles Darwin's theory of evolution had been explained to the world as 'survival of the fittest'.
The concept was quickly adapted from biology into sociology, and many intellectuals believed that people became wealthy because they were the most 'fit'. The logical extreme of this 'Social Darwinism' was to let poor, unfit people just die out. But, some members of the elite couldn't reconcile that heartlessness with cultural and/or religious values.
Such Reform Darwinists, like Andrew Carnegie, believed that all members of society should be given appropriate opportunities and resources to improve their lives. However, Carnegie and other Robber Barons clearly didn't think the poor were capable of handling and spending large sums of money. Therefore, the so-called 'fittest' members of society had a duty to decide for the poorest what they needed most.
Whatever his beliefs, Andrew Carnegie proceeded to give away 90% of his fortune during his lifetime, about $350 million dollars - and that's not adjusted for inflation. And then since his death, the endowments he established have donated another $2 billion, and many of them keep on giving today. He established some of the first corporate pension funds for his former employees, founded the 'Hero's Fund', contributed to universities and helped support organizations for world peace.
Carnegie was most proud of the thousands of libraries he built - at a time when only a few free, public libraries existed in the world. His appreciation for music led him to donate roughly 7,000 organs to local churches and to build the famous Carnegie Hall in New York City. Without question, Andrew Carnegie remains to this day one of the most influential figures in American education and culture.
But, these efforts weren't without criticism, then or now. Some skeptics have questioned the Robber Barons' true motives and suggested that such philanthropy was a disguise for exercising social control. But, even this polarity of opinion is what makes Andrew Carnegie such a prime example of how controversial the tycoons of the Gilded Age were. Were they Captains of Industry, or Robber Barons?
Let's review. During the Second Industrial Revolution, corporate leaders competed for dominance in the American economy. Sometimes known as Robber Barons, these business tycoons were known for their innovative, if controversial, business practices, as well as their philanthropy.
Andrew Carnegie is a good example. As a penniless young immigrant, he worked his way up through a series of low-paying jobs to become one of the richest men in history, though modern critics suggest that his investments were not always above-board. In his essay 'The Gospel of Wealth', Carnegie said that a wealthy man should consider 'surplus revenues which come to him simply as trust funds', which he was obligated to donate in a way that would 'produce the most beneficial results for the community'.
This is a reflection of the philosophy known as Reform Darwinism, the belief that those who are most fit (and therefore the most successful) should provide supervised opportunities for the less fit to improve themselves. And though Andrew Carnegie owned companies that sometimes clashed with employees, he also believed they had a right to organize. Finally, Carnegie was a leader in philanthropy - he especially was proud of his creation of thousands of libraries worldwide - and many other of his organizations are still giving today.
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Back To CourseHistory 104: US History II
14 chapters | 111 lessons | 10 flashcard sets