Failure of Capitalism in Dr. Wall’s biography: Andrew Carnegie

Andrew Carnegie is iconic of “rags to riches”, but at the peak of his fortunes, his life of the American Dream obligated him to return his riches to the common wealth. Wall’s biography of this man supports that capitalism fails social welfare by providing a first-class account of Carnegie, who was the most successful capitalist of the time-and saw all the woes of capitalism in his life. Born 1835, Carnegie was raised in Dunfermline, Scotland at a period of political unrest, blight, and industrial revolution. His hometown and family had a strong industry in damask weaving, but suffered from mechanical innovation that automated much of the trade. The Carnegies, poor and hopeless, followed thousands of other Irish, Scottish, and English laborers to the United States, hoping immigration to be an opportunity for liberty, elsewise food and shelter. Here in America, Carnegie with his congenial disposition and quick wits was able to climb the ladder, and grew a strong addiction to capital and competition. This addiction, not greed, allowed him to rationalize the many injustices he found in the system, like common welfare and slavery, and was made apparent by his own actions as well as his critics calls on hypocrisy. In fact, this ideological struggle followed him from the Chartist movement in Scotland to his death, and the last rationalization of these fallacies was his devotion as a philanthropist.

“Death to all Privilege” was Carnegie’s philosophy as he sailed across the Atlantic in the Wiscasset, unknown to him that he would fill the shoes of “Privilege”, not back at home wearing a crown, but near his destination, and as a giant of industry. He learned this premature idea of privilege in part from his family, particularly Uncle Tom Morrison and his father, William, who were active Radicals and vigorously supported the Charter. There were many political and economic conflicts in the United Kingdom of Great Britain at the time, and it’s important to understand that the ideas of class separation and laissez-faire, or free-trade were addressed to Carnegie at a young age. Class separation was less than tolerable in those times, and unsolved by the Reform Act of 1832, which gave voting rights to select middle-class men who maliciously sought laissez-faire in the industrial revolution. Chartists like Andrew’s family and much of Dunfermline, however, needed more government protection on trade, as laissez-faire further milked the working class’s wages. Uncle Tom, an outspoken Radical, was actually an excellent teacher and impressed his knowledge of history, economics, and politics unto Carnegie.

Significantly, neither Morrison nor his supporters saw universal suffrage and equal representation as ends in themselves, but only as means to the ends of general economic and social reforms. Amongst the liberal ideals that Morrison taught young Andrew, many were relatively objective, which explains his seriously misplaced understanding of privilege, and the lack to see its symbolism till later years. Morrison was an avid writer and would have his work published by any he could find. In one essay Morrison wrote “Our rule is Each shall possess; all shall enjoy”, ironically, endorsed by Carnegie in his later years of philanthropy. Despite their efforts, the chartists didn’t get suffrage, and the Charter was mocked by Parliament.

Another method of Carnegie’s acceptance of capitalism was his early rejection that poverty brings sorrow, based upon his own experience of being poor, which he regarded as delightful. Rather, it was great parental sacrifice that protected Andrew and his brother Thomas from the reality of 19th Century poverty. Now, the Summer of 1847, a great steam-powered weaving factory had began operations in Dunfermline, and approaching a harsh Winter, eight hundred weavers were without work, four hundred which were lucky to get meager wages employed at the factory. Machine had conquered man, the potato blight approached, and the Charter failed, and so the Carnegies planned their emigration. Andrew’s mother, Margaret, had sisters in Pittsburgh, and that is where the Carnegies would first settle. Unsurprising to William, they found similar conditions in Slabtown, Pa. However, between the pinched hunger in Dunfermline and the slums of a back alley of Pittsburgh, young Andrew always had a hot bowl of porridge on the table and a clean collar in his dresser drawer. In his own autobiography, Carnegie wrote, “We were not reduced to anything like poverty compared with our neighbors. I do not know to what lengths of privation my mother would not have gone . . . to keep us in comfort and ‘respectable’ ”, and which certainly accounts for his later inclination to the tragedy of poverty.

Unfortunately, in the company of his elders he had learned too much and too little of the world, and at age twelve Carnegie began his ascent in this unjustly system of capitalism, starting as a messenger boy for the O’Reilly Telegraph service. His congenial attitude and adeptness found him quick reward, moving from messenger to operator, which gave him the opportunity to work for the Pennsylvania Railroad Company, as a secretary and telegraph operator for Thomas Scott, the superintendent of the Western Division of the railroad. Scott allowed Carnegie to hail himself for the first time ‘a capitalist’, having convinced him to buy stock in the Adams Express Company. After his first check of ten dollars from that stock arrived, Andrew was marveled that money could make money. This further drove his competition and he eventually replaced Scott as superintendent of the Western Division.

Soon, Carnegie’s investments spread, surpassing his salary earnings, and so he retired from P. R. R. Co. By 1870, when Carnegie had reached the age of thirty-five, he was busily engaged in promoting his interests in telegraphy, the Pullman Palace Car Company, the sale of bonds, and the building of bridges. He showed no public resistance to capitalism, but a private note Carnegie had written the same year exclaims, “The amassing of wealth is one of the worst species of idolitary”, and “I will resign business at Thirty five.” The note is indicative of his ideological struggle, and importantly so early in his capitalist career.

Nevertheless, Carnegie engaged capitalism more fiercely, investing in the steel industry, a period in which he took an escape from his faltering capitalism. Carnegie’s Edgar Thompson Steel Works was built 1972 and located in Braddock, hailed as the most sophisticated steel plant in the United States. His general manager was William Jones, who gravely antagonized Carnegie’s labor practices. The business strategy was simple and linear for Carnegie, reduce costs and profits would come. Regarding men as a commodity, Carnegie now drove to reduce labor costs, and persisted to compete with rival steel manufacturers to have the lowest labor costs. Jones would deter sharp wage reductions, though, telling Carnegie “low wages does not always imply cheap labor, good wages and good workmen I know to be cheap labor.” There isn’t doubt Carnegie had seen the dreadful streets and the despair of the laborers in Pittsburgh, but his fierce drive for competition allowed him to view his laborers like other resources, such as iron and coke.

Additionally, Carnegie’s further labor practices proved hypocritical, showing competitiveness to thwart his morality. “Captain” Jones persisted in advocating for labor policy improvements, and it was he who persuaded Carnegie to abandon the traditional two-turn, twelve-hour shift in favor of the three-turn, eight-hour shift. At the time, this was a radical labor innovation, and Jones explained at the British Iron and Steel Institute, May 1881, “it was entirely out of the question to expect human flesh and blood to labor incessantly for twelve hours.” However, the adoption of this three-turn operation at Edgar Thomson had not brought about a universal acceptance of this practice throughout the steel industry as Carnegie had intended. Ten years later the eight-hour shift policy was revoked, as he strived furiously to compete with his rivals’ costs. Other hypocrisies under Jones management were Carnegie’s public support of labor unions and condemnation of strikebreakers, which would be abandoned after the Captain’s death.

More conservative in labor policy than Carnegie, Henry Frick replaced Captain Jones, who died from the explosion of a blast furnace. Carnegie’s hypocrisy in labor policy was fully pronounced under Frick’s management, especially at the newly acquired facilities in Homestead, Pa. The laborers at Homestead were joined in the Amalgamated Association, a trade union, and their wage contract, which was signed prior to Frick’s administration, ended in the Summer of 1892. Frick and Carnegie planned to disband the union, contrary to Carnegie’s pro-union endorsements. Shamefully, Carnegie retreated to a secluded cottage in Europe for the Summer, leaving Frick to negotiate. The details of that bloody July strike have been told often and need no elaboration, but the company was successful in eliminating trade unions and decreasing wages. Following the Homestead Strike, despite Carnegie’s coined phrase “though shalt not take thy neighbor’s job”, strikebreakers were brought to replace many workers. Not many years later, Carnegie would come to terms with his hypocrisy and this tragedy of capitalism by giving large pensions to former employees.

In June 1889, Carnegie wrote an essay to the North American Review, in which he said “The man who dies thus rich, dies disgraced”, and two years afterward his empire, Carnegie Steel Company, was sold to J.P. Morgan. Carnegie could have continued his business to his death, but his morality finally overpowered competitiveness. In his walk of the American Dream, Carnegie wasn’t only an industry giant, but also world traveler and scholar. From “rags to riches” he captured the flaws of capitalism by acquaintance of imperialism, poverty, slavery, labor treatment, and privilege. The failure of capitalism to support social welfare obligated him to return his wealth, spending his last years as a philanthropist.

Wall, Joseph F. Andrew Carnegie. Oxford University Press. 1970. Print.