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Solved by verified expert:The Financier: J.P. Morgan (Essay #2 Due: Based on the reading “The Gospel of Wealth” and the Livesay article, how would Andrew Carnegie define corporate responsibility and what did he think should be the appropriate role of wealthy businessmen in society? Do you think he embodied corporate responsibility?) Use MLA format!
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“THE GOSPEL OF WEALTH”
BY ANDREW CARNEGIE
The problem of our age is the proper administration of wealth, so
that the ties of brotherhood may still bind together the rich and
poor in harmonious relationship. The conditions of human life have
not only been changed, but revolutionized, within the past few
hundred years. In former days there was little difference between
the dwelling, dress, food, and environment of the chief and those of
his retainers. The Indians are today where civilized man then was.
When visiting the Sioux, I was led to the wigwam of the chief. It was
just like the others in external appearance, and even within the
difference was trifling between it and those of the poorest of his
braves. The contrast between the palace of the millionaire and the
cottage of the laborer with us today measures the change which
has come with civilization. This change, however, is not to be
deplored, but welcomed as highly beneficial. It is well, nay,
essential for the progress of the race, that the houses of some
should be homes for all that is highest and best in literature and the
arts, and for all the refinements of civilization, rather than that
none should be so. Much better this great irregularity than
universal squalor. Without wealth there can be no Mæcenas. The
“good old times ” were not good old times. Neither master nor
servant was as well situated then as to-day. A relapse to old
conditions would be disastrous to both—not the least so to him
who serves—and would sweep away civilization with it. But
whether the change be for good or ill, it is upon us, beyond our
power to alter, and therefore to be accepted and made the best of.
It is a waste of time to criticize the inevitable.
It is easy to see how the change has come. One illustration will
serve for almost every phase of the cause. In the manufacture of
products we have the whole story. It applies to all combinations of
human industry, as stimulated and enlarged by the inventions of
this scientific age. Formerly articles were manufactured at the
domestic hearth or in small shops which formed part of the
household. The master and his apprentices worked side by side, the
latter living with the master, and therefore subject to the same
conditions. When these apprentices rose to be masters, there was
little or no change in their mode of life, and they, in turn, educated
in the same routine succeeding apprentices. There was,
substantially social equality, and even political equality, for those
engaged in industrial pursuits had then little or no political voice in
the State.
“The poor enjoy what the rich could not before afford. What were
the luxuries have become the necessaries of life. The laborer has
now more comforts than the landlord had a few generations ago.”
But the inevitable result of such a mode of manufacture was crude
articles at high prices. Today the world obtains commodities of
excellent quality at prices which even the generation preceding this
would have deemed incredible. In the commercial world similar
causes have produced similar results, and the race is benefited
thereby. The poor enjoy what the rich could not before afford.
What were the luxuries have become the necessaries of life. The
laborer has now more comforts than the landlord had a few
generations ago. The farmer has more luxuries than the landlord
had, and is more richly clad and better housed. The landlord has
books and pictures rarer, and appointments more artistic, than the
King could then obtain.
The price we pay for this salutary change is, no doubt, great. We
assemble thousands of operatives in the factory, in the mine, and in
the counting-house, of whom the employer can know little or
nothing, and to whom the employer is little better than a myth. All
intercourse between them is at an end. Rigid castes are formed,
and, as usual, mutual ignorance breeds mutual distrust. Each caste
is without sympathy for the other, and ready to credit anything
disparaging in regard to it. Under the law of competition, the
employer of thousands is forced into the strictest economies,
among which the rates paid to labor figure prominently, and often
there is friction between the employer and the employed, between
capital and labor, between rich and poor. Human society loses
homogeneity.
The price which society pays for the law of competition, like the
price it pays for cheap comforts and luxuries, is also great; but the
advantage of this law are also greater still, for it is to this law that
we owe our wonderful material development, which brings
improved conditions in its train. But, whether the law be benign or
not, we must say of it, as we say of the change in the conditions of
men to which we have referred: It is here; we cannot evade it; no
substitutes for it have been found; and while the law may be
sometimes hard for the individual, it is best for the race, because it
insures the survival of the fittest in every department. We accept
and welcome therefore, as conditions to which we must
accommodate ourselves, great inequality of environment, the
concentration of business, industrial and commercial, in the hands
of a few, and the law of competition between these, as being not
only beneficial, but essential for the future progress of the race.
Having accepted these, it follows that there must be great scope for
the exercise of special ability in the merchant and in the
manufacturer who has to conduct affairs upon a great scale. That
this talent for organization and management is rare among men is
proved by the fact that it invariably secures for its possessor
enormous rewards, no matter where or under what laws or
conditions. The experienced in affairs always rate the MAN whose
services can be obtained as a partner as not only the first
consideration, but such as to render the question of his capital
scarcely worth considering, for such men soon create capital; while,
without the special talent required, capital soon takes wings. Such
men become interested in firms or corporations using millions; and
estimating only simple interest to be made upon the capital
invested, it is inevitable that their income must exceed their
expenditures, and that they must accumulate wealth. Nor is there
any middle ground which such men can occupy, because the great
manufacturing or commercial concern which does not earn at least
interest upon its capital soon becomes bankrupt. It must either go
forward or fall behind: to stand still is impossible. It is a condition
essential for its successful operation that it should be thus far
profitable, and even that, in addition to interest on capital, it should
make profit. It is a law, as certain as any of the others named, that
men possessed of this peculiar talent for affair, under the free play
of economic forces, must, of necessity, soon be in receipt of more
revenue than can be judiciously expended upon themselves; and
this law is as beneficial for the race as the others.
Objections to the foundations upon which society is based are not
in order, because the condition of the race is better with these than
it has been with any others which have been tried. Of the effect of
any new substitutes proposed we cannot be sure. The Socialist or
Anarchist who seeks to overturn present conditions is to be
regarded as attacking the foundation upon which civilization itself
rests, for civilization took its start from the day that the capable,
industrious workman said to his incompetent and lazy fellow, “If
thou dost not sow, thou shalt not reap,” and thus ended primitive
Communism by separating the drones from the bees. One who
studies this subject will soon be brought face to face with the
conclusion that upon the sacredness of property civilization itself
depends–the right of the laborer to his hundred dollars in the
savings bank, and equally the legal right of the millionaire to his
millions. To these who propose to substitute Communism for this
intense Individualism the answer, therefore, is: The race has tried
that. All progress from that barbarous day to the present time has
resulted from its displacement. Not evil, but good, has come to the
race from the accumulation of wealth by those who have the ability
and energy that produce it. But even if we admit for a moment that
it might be better for the race to discard its present foundation,
Individualism,—that it is a nobler ideal that man should labor, not
for himself alone, but in and for a brotherhood of his fellows, and
share with them all in common, realizing Swedenborg’s idea of
Heaven, where, as he says, the angels derive their happiness, not
from laboring for self, but for each other,—even admit all this, and
a sufficient answer is, This is not evolution, but revolution. It
necessitates the changing of human nature itself a work of eons,
even if it were good to change it, which we cannot know.
It is not practicable in our day or in our age. Even if desirable
theoretically, it belongs to another and long-succeeding sociological
stratum. Our duty is with what is practicable now; with the next
step possible in our day and generation. It is criminal to waste our
energies in endeavoring to uproot, when all we can profitably or
possibly accomplish is to bend the universal tree of humanity a little
in the direction most favorable to the production of good fruit
under existing circumstances. We might as well urge the
destruction of the highest existing type of man because he failed to
reach our ideal as favor the destruction of Individualism, Private
Property, the Law of Accumulation of Wealth, and the Law of
Competition; for these are the highest results of human experience,
the soil in which society so far has produced the best fruit.
Unequally or unjustly, perhaps, as these laws sometimes operate,
and imperfect as they appear to the Idealist, they are, nevertheless,
like the highest type of man, the best and most valuable of all that
humanity has yet accomplished.
We start, then, with a condition of affairs under which the best
interests of the race are promoted, but which inevitably gives
wealth to the few. Thus far, accepting conditions as they exist, the
situation can be surveyed and pronounced good. The question then
arises,—and, if the foregoing be correct, it is the only question with
which we have to deal,—What is the proper mode of administering
wealth after the laws upon which civilization is founded have
thrown it into the hands of the few ? And it is of this great question
that I believe I offer the true solution. It will be understood that
fortunes are here spoken of, not moderate sums saved by many
years of effort, the returns on which are required for the
comfortable maintenance and education of families. This is not
wealth, but only competence which it should be the aim of all to
acquire.
There are but three modes in which surplus wealth can be disposed
of. It can be left to the families of the decedents; or it can be
bequeathed for public purposes; or, finally, it can be administered
during their lives by its possessors. Under the first and second
modes most of the wealth of the world that has reached the few
has hitherto been applied. Let us in turn consider each of these
modes. The first is the most injudicious. In monarchical countries,
the estates and the greatest portion of the wealth are left to the
first son, that the vanity of the parent may be gratified by the
thought that his name and title are to descend to succeeding
generations unimpaired. The condition of this class in Europe to-day
teaches the futility of such hopes or ambitions. The successors have
become impoverished through their follies or from the fall in the
value of land. Even in Great Britain the strict law of entail has been
found inadequate to maintain the status of an hereditary class. Its
soil is rapidly passing into the hands of the stranger. Under
republican institutions the division of property among the children
is much fairer, but the question which forces itself upon thoughtful
men in all lands is: Why should men leave great fortunes to their
children? If this is done from affection, is it not misguided
affection? Observation teaches that, generally speaking, it is not
well for the children that they should be so burdened. Neither is it
well for the state. Beyond providing for the wife and daughters
moderate sources of income, and very moderate allowances
indeed, if any, for the sons, men may well hesitate, for it is no
longer questionable that great sums bequeathed oftener work
more for the injury than for the good of the recipients. Wise men
will soon conclude that, for the best interests of the members of
their families and of the state, such bequests are an improper use
of their means.
It is not suggested that men who have failed to educate their sons
to earn a livelihood shall cast them adrift in poverty. If any man has
seen fit to rear his sons with a view to their living idle lives, or, what
is highly commendable, has instilled in them the sentiment that
they are in a position to labor for public ends without reference to
pecuniary considerations, then, of course, the duty of the parent is
to see that such are provided for in moderation. There are
instances of millionaires’ sons unspoiled by wealth, who, being rich,
still perform great services in the community. Such are the very salt
of the earth, as valuable as, unfortunately, they are rare; still it is
not the exception, but the rule, that men must regard, and, looking
at the usual result of enormous sums conferred upon legatees, the
thoughtful man must shortly say, “I would as soon leave to my son
a curse as the almighty dollar,” and admit to himself that it is not
the welfare of the children, but family pride, which inspires these
enormous legacies.
As to the second mode, that of leaving wealth at death for public
uses, it may be said that this is only a means for the disposal of
wealth, provided a man is content to wait until he is dead before it
becomes of much good in the world. Knowledge of the results of
legacies bequeathed is not calculated to inspire the brightest hopes
of much posthumous good being accomplished. The cases are not
few in which the real object sought by the testator is not attained,
nor are they few in which his real wishes are thwarted. In many
cases the bequests are so used as to become only monuments of
his folly. It is well to remember that it requires the exercise of not
less ability than that which acquired the wealth to use it so as to be
really beneficial to the community. Besides this, it may fairly be said
that no man is to be extolled for doing what he cannot help doing,
nor is he to be thanked by the community to which he only leaves
wealth at death. Men who leave vast sums in this way may fairly be
thought men who would not have left it at all, had they been able
to take it with them. The memories of such cannot be held in
grateful remembrance, for there is no grace in their gifts. It is not to
be wondered at that such bequests seem so generally to lack the
blessing.
The growing disposition to tax more and more heavily large estates
left at death is a cheering indication of the growth of a salutary
change in public opinion. The State of Pennsylvania now takes—
subject to some exceptions—one-tenth of the property left by its
citizens. The budget presented in the British Parliament the other
day proposes to increase the death-duties; and, most significant of
all, the new tax is to be a graduated one. Of all forms of taxation,
this seems the wisest. Men who continue hoarding great sums all
their lives, the proper use of which for – public ends would work
good to the community, should be made to feel that the
community, in the form of the state, cannot thus be deprived of its
proper share. By taxing estates heavily at death the state marks its
condemnation of the selfish millionaire’s unworthy life.
It is desirable that nations should go much further in this direction.
Indeed, it is difficult to set bounds to the share of a rich man’s
estate which should go at his death to the public through the
agency of the state, and by all means such taxes should be
graduated, beginning at nothing upon moderate sums to
dependents, and increasing rapidly as the amounts swell, until of
the millionaire’s hoard, as of Shylock’s, at least
“The other half
Comes to the privy coffer of the state.”
This policy would work powerfully to induce the rich man to attend
to the administration of wealth during his life, which is the end that
society should always have in view, as being that by far most fruitful
for the people. Nor need it be feared that this policy would sap the
root of enterprise and render men less anxious to accumulate, for
to the class whose ambition it is to leave great fortunes and be
talked about after their death, it will attract even more attention,
and, indeed, be a somewhat nobler ambition to have enormous
sums paid over to the state from their fortunes.
There remains, then, only one mode of using great fortunes; but in
this we have the true antidote for the temporary unequal
distribution of wealth, the reconciliation of the rich and the poor—a
reign of harmony—another ideal, differing, indeed, from that of the
Communist in requiring only the further evolution of existing
conditions, not the total overthrow of our civilization. It is founded
upon the present most intense individualism, and the race is
projected to put it in practice by degree whenever it pleases. Under
its sway we shall have an ideal state, in which the surplus wealth of
the few will become, in the best sense the property of the many,
because administered for the common good, and this wealth,
passing through the hands of the few, can be made a much more
potent force for the elevation of our race than if it had been
distributed in small sums to the people themselves. Even the
poorest can be made to see this, and to agree that great sums
gathered by some of their fellow-citizens and spent for public
purposes, from which the masses reap the principal benefit, are
more valuable to them than if scattered among them through the
course of many years in trifling amounts through the course of
many years.
If we consider what results flow from the Cooper Institute, for
instance, to the best portion of the race in New York not possessed
of means, and compare these with those which would have arisen
for the good of the masses from an equal sum distributed by Mr.
Cooper in his lifetime in the form of wages, which is the highest
form of distribution, being for work done and not for charity, we
can form some estimate of the possibilities for the improvement of
the race which lie embedded in the present law of the
accumulation of wealth. Much of this sum if distributed in small
quantities among the people, would have been wasted in the
indulgence of appetite, some of it in excess, and it may be doubted
whether even the part put to the best use, that of adding to the
comforts of the home, would have yielded results for the race, as a
race, at all comparable to those which are flowing and are to flow
from the Cooper Institute from generation to generation. Let the
advocate of violent or radical change ponder well this thought.
We might even go so far as to take another instance, that of Mr.
Tilden’s bequest of five millions of dollars for a free library in the
city of New York, but in referring to this one cannot help saying
involuntarily, how much better if Mr. Tilden had devoted the last
years of his own life to the proper administration of this immense
sum; in which case neither legal contest nor any other cause of
delay could have interfered with his aims. But let us assume that
Mr. Tilden’s millions finally become the means of giving to this city a
noble public library, where the treasures of the world contained in
books will be open to all forever, without money and without price.
Considering …
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