Robbing From The Poor To Give To The Rich: Andrew Carnegie And His Mega-Legacy

While the Civil War was raging, and the Union was desperate for able-bodied young men to help preserve the nation, Andrew Carnegie had different plans. The 28 year old was already well on his way to becoming one of the wealthiest men in history when the draft came calling. So, rather than go into the military and do his duty, Carnegie paid $850, or $150,000 in modern money, for a substitute, an Irish immigrant, by capitalizing on the recently passed Conscription Act, which allowed for exemptions through the payment of a "commutation" fee. Quite literally, this meant that someone with less means stood in the millionaire's place on the battlefield, risking his life for the United States while Carnegie was safe and sound far from the fighting. 

Andrew Carnegie was a member of a hunting club in Pennsylvania that directly caused the deaths of 2,029 people. South Fork Fishing and Hunting Club was located up river from the city of Johnston, Pennsylvania. Included on the club's property was a dam that was built to create a reservoir. The dam had been neglected for years by the club, and, in 1889, it broke after heavy rains. What followed was a 30-foot-tall wall of water that rushed toward the unsuspecting people of Johnston. The flood swept through town, and there was so much water that it took a full 10 minutes for it to pass by. When it did, there was a fire that killed an additional 80 people who were seeking shelter. Somehow, none of the super wealthy members of the club were ever brought to justice for the deaths of thousands of people due to the neglect of their organization.

In 1892, things weren't going so well at Andrew Carnegie's steel plant in Homestead, PA. The Amalgamated Association of Iron, Steel, and Tin Workers union had formed. Rather than tolerate the existence of the union, Henry Clay Frick, the chairman of the company, announced that he would cut the workers' wages by 22% to make the company more money at the expense of its workers. So, the union decided to go on strike. From his castle in Scotland, Carnegie thought bringing in mercenaries to bust up the strike seemed like the best idea.

Enter the Pinkerton Detective service, which was essentially a private army for the rich and powerful in America in the late 1800s. Rather than accept strikes and labor rights claims, Carnegie delegated the task of undermining the rights of his workers to Frick, who brought in the Pinkertons to break strikes, enabling them to act as a mob to impose the will of the company on its workers. The Pinkertons attacked the striking workers but were soon overwhelmed when the entire town essentially came out to fight the strikebreakers. That wasn't before the private army killed seven people.

Eventually, the state militia was called in, and scabs were brought in to break the strike. Work continued at the plant over the four months of the strike, and, eventually, the union leaders were fired, blacklisted, and forced to take pay cuts and work more hours.

In perhaps the most paternalistic line of reasoning that has ever been laid down, Carnegie once explained why he paid his workers the low wages that he did. On the one hand, there was the obvious reason – low wages helped him remain competitive, business wise. On the other hand, there was his idea that if he paid his workers something resembling a living wage, they might use it on nice things. Imagine that. He explained himself, reasoning:

"Trifling sums given to each every week or month... would be frittered away, nine times out of ten, in things which pertain to the body and not to the spirit; upon richer food and drink, better clothing, more extravagant living, which are beneficial neither to rich nor poor."

Yeah, he probably didn't eat well or wear nice things either. He had to look out for his spirit, after all.

Andrew Carnegie made millions and millions of dollars in the steel industry. While this may seem like the product of hard work and ingenuity – and no doubt he had no shortage of vision and belief to get all his wealth – Carnegie wasn't exactly the bootstrapping, totally self-reliant individual he would have had you believe him to be. In fact, Carnegie had a lot of help along the way, much of it from the US government. For example, the millionaire took advantage of the high tariffs that the United States instituted to protect the burgeoning domestic steel industry from cheaper steel products imported from overseas. This made competition more expensive in the steel industry and helped ensure that prices would be high enough to make U.S. Steel extremely profitable. 

Given his stance on unions and his incredibly unforgiving labor conditions for his workers, it's little wonder that the millions of dollars that Andrew Carnegie accumulated and then gave away were not simply looked upon as a good, benevolent thing. In 1915, Congress and the executive branch created the Commission on Industrial Relations, which claimed that foundations like Carnegie's were antidemocratic and powerful enough to undermine the role of democracy. While the Carnegie mission of giving away his fortune seems noble, the underlying system that created his unbelievable wealth, such as poor education, poverty, and inequality, was a direct result of men like Carnegie exploiting the very people he sought to "help." 

Andrew Carnegie was a noted pacifist who claimed he wanted world peace. He even participated in the building of the Peace Palace for the World Court in The Hague, Netherlands, a place for international collaborations, in 1907. When World War I broke out, the tycoon worked to end the fighting to no avail. That didn't stop Carnegie from entering the war profiteering market, however, given that he signed a contract to make steel armor for the Navy when his mother – the one who influenced his beliefs – died. Carnegie may have been a pacifist after all; the steel that he produced for the Navy ended up being defective and was useless to the military.