Andrew Carnegie

Definition

Andrew Carnegie was a Scottish-American industrialist and philanthropist who led the expansion of the American steel industry in the late 19th century. He is often remembered for his role in the rise of big business and for his commitment to philanthropy, particularly through his belief in the 'Gospel of Wealth,' which argued that the rich have a moral obligation to distribute their wealth for the betterment of society.

5 Must Know Facts For Your Next Test

1. Carnegie was born on November 25, 1835, in Scotland and immigrated to the United States in 1848, where he started working at a young age.
2. He founded Carnegie Steel Company in 1892, which became the largest and most profitable industrial enterprise in the world at that time.
3. Carnegie sold his steel company to J.P. Morgan for $480 million in 1901, marking one of the largest business deals in history and solidifying his wealth.
4. After retiring, he dedicated his life to philanthropy, giving away over $350 million to various causes, including libraries, education, and scientific research.
5. His approach to philanthropy influenced future generations of wealthy individuals and established a precedent for using wealth for social improvement.

Review Questions

• How did Andrew Carnegie's early life experiences shape his views on wealth and philanthropy?
  • Andrew Carnegie's early life experiences, including his family's immigration from Scotland to America and his humble beginnings working as a bobbin boy in a cotton factory, profoundly shaped his views on wealth. These experiences instilled in him a belief that hard work and determination could lead to success. As he became wealthy through the steel industry, he felt a moral obligation to give back to society, leading him to promote the idea that the wealthy should use their fortunes for philanthropic efforts that benefit the community.
• Discuss the impact of Andrew Carnegie's 'Gospel of Wealth' on American society and philanthropy.
  • Andrew Carnegie's 'Gospel of Wealth' had a significant impact on American society by encouraging wealthy individuals to take an active role in improving societal conditions through philanthropy. This philosophy argued that the affluent should allocate their surplus wealth towards public causes such as education, libraries, and scientific advancements. As a result, it inspired other wealthy industrialists and entrepreneurs to follow suit and contribute to charitable efforts, thus fostering a culture of philanthropy that continues to influence contemporary society.
• Evaluate how Andrew Carnegie's business practices, particularly vertical integration, contributed to the growth of the American steel industry during his time.
  • Andrew Carnegie's implementation of vertical integration played a crucial role in the growth of the American steel industry. By controlling every aspect of production—from raw materials to transportation and distribution—he was able to reduce costs and increase efficiency significantly. This strategy not only allowed Carnegie Steel Company to dominate the market but also set a standard for other businesses in America. The scale and success of his operations exemplified how integrated production methods could revolutionize industries and contribute to rapid economic growth during the Industrial Revolution.

Related terms

Gospel of Wealth: A philosophy proposed by Carnegie that advocated for the wealthy to use their surplus funds for social good and improve society through charitable acts.

Vertical Integration: A business strategy where a company controls multiple stages of production or supply chain, which Carnegie implemented in his steel business to increase efficiency.

Philanthropy: The desire to promote the welfare of others, typically through the donation of money, resources, or time, which was a significant aspect of Carnegie's legacy.