The Gospel of Wealth
Encyclopedia
"Wealth", more commonly known as "The Gospel of Wealth", "the Richest man in the World," is an essay written by Andrew Carnegie
in 1889 that described the responsibility of philanthropy
by the new upper class of self-made rich. The central thesis of Carnegie's essay was the peril of allowing large sums of money
to be passed into the hands of persons or organizations ill-equipped mentally or emotionally to cope with them. As a result, the wealthy entrepreneur must assume the responsibility of distributing his fortune in a way that it will be put to good use, and not wasted on frivolous expenditure. In this he represented a captain of industry who had risen to power by his own hand and refused to worship.
was no guarantee that it would be used wisely, since there was no guarantee that a charitable organization not under one's direction would use the money in accordance with one's wishes. Carnegie disapproved of charitable giving that merely maintained the poor in their impoverished state, and urged a movement toward the creation of a new mode of giving which would create opportunities for the beneficiaries of the gift to better themselves. As a result, the gift would not be merely consumed, but would be productive of even greater wealth throughout the society.
scale: "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 grated, beginning at nothing upon moderate sums to dependents, and increasing rapidly as the amounts swell, until of the millionaire's hoard, at least the other half comes to the privy coffer of the State. He claimed that, in bettering society and people here on earth, one would be rewarded at the gates of Paradise
.
, with the idea that he was thus providing people with the tools to better themselves. In order to ensure that his gifts would not be wasted, he stipulated that the municipality must pass an ordinance establishing a tax
to support the library's ongoing operating costs after the initial grant provided the costs for building and equipping the library. After several communities squandered their grants on extravagant buildings, Carnegie established a system of architectural guidelines that mandated simplicity and functionality. When it became obvious that Carnegie could not give away his entire fortune within his lifetime, he established the Carnegie Foundation
to continue his program of giving.
Andrew Carnegie
Andrew Carnegie was a Scottish-American industrialist, businessman, and entrepreneur who led the enormous expansion of the American steel industry in the late 19th century...
in 1889 that described the responsibility of philanthropy
Philanthropy
Philanthropy etymologically means "the love of humanity"—love in the sense of caring for, nourishing, developing, or enhancing; humanity in the sense of "what it is to be human," or "human potential." In modern practical terms, it is "private initiatives for public good, focusing on quality of...
by the new upper class of self-made rich. The central thesis of Carnegie's essay was the peril of allowing large sums of money
Money
Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past,...
to be passed into the hands of persons or organizations ill-equipped mentally or emotionally to cope with them. As a result, the wealthy entrepreneur must assume the responsibility of distributing his fortune in a way that it will be put to good use, and not wasted on frivolous expenditure. In this he represented a captain of industry who had risen to power by his own hand and refused to worship.
Give to give anew
Carnegie based his philosophy on the observation that the heirs of large fortunes frequently squandered them in riotous living rather than nurturing and growing them. Even bequeathing one's fortune to charityCharitable organization
A charitable organization is a type of non-profit organization . It differs from other types of NPOs in that it centers on philanthropic goals A charitable organization is a type of non-profit organization (NPO). It differs from other types of NPOs in that it centers on philanthropic goals A...
was no guarantee that it would be used wisely, since there was no guarantee that a charitable organization not under one's direction would use the money in accordance with one's wishes. Carnegie disapproved of charitable giving that merely maintained the poor in their impoverished state, and urged a movement toward the creation of a new mode of giving which would create opportunities for the beneficiaries of the gift to better themselves. As a result, the gift would not be merely consumed, but would be productive of even greater wealth throughout the society.
Role of Philanthropy and Taxation within Capitalism
In Wealth, Carnegie examines the modes of distributing accumulated wealth and capital to the communities it originates from. He preached that ostentatious living and amassing private treasures was wrong. He praised the high British taxes on the estates of dead millionaires, remarking that "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." His "gospel of wealth" earned much praise, but did not win many converts. Carnegie made it clear that the rich were best suited for the recirculation of their money back into society where it could be used to support the greater good, given that they are presumed to have a penchant for management of capital. However, he shunned aristocratic chains of inheritance and argued that dependents should be supported in moderation, with the bulk of excess wealth to be spent on enriching the community. In cases where excess wealth was held until death, he advocated its apprehension by the state on a progressiveProgressive tax
A progressive tax is a tax by which the tax rate increases as the taxable base amount increases. "Progressive" describes a distribution effect on income or expenditure, referring to the way the rate progresses from low to high, where the average tax rate is less than the marginal tax rate...
scale: "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 grated, beginning at nothing upon moderate sums to dependents, and increasing rapidly as the amounts swell, until of the millionaire's hoard, at least the other half comes to the privy coffer of the State. He claimed that, in bettering society and people here on earth, one would be rewarded at the gates of Paradise
Heaven
Heaven, the Heavens or Seven Heavens, is a common religious cosmological or metaphysical term for the physical or transcendent place from which heavenly beings originate, are enthroned or inhabit...
.
Carnegie Libraries
Carnegie put his philosophy into practice through a program of gifts to endow public libraries, known as 'Carnegie libraries' in cities and towns throughout the United States and the English-speaking worldEnglish-speaking world
The English-speaking world consists of those countries or regions that use the English language to one degree or another. For more information, please see:Lists:* List of countries by English-speaking population...
, with the idea that he was thus providing people with the tools to better themselves. In order to ensure that his gifts would not be wasted, he stipulated that the municipality must pass an ordinance establishing a tax
Tax
To tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...
to support the library's ongoing operating costs after the initial grant provided the costs for building and equipping the library. After several communities squandered their grants on extravagant buildings, Carnegie established a system of architectural guidelines that mandated simplicity and functionality. When it became obvious that Carnegie could not give away his entire fortune within his lifetime, he established the Carnegie Foundation
Carnegie Corporation of New York
Carnegie Corporation of New York, which was established by Andrew Carnegie in 1911 "to promote the advancement and diffusion of knowledge and understanding," is one of the oldest, largest and most influential of American foundations...
to continue his program of giving.
See Also
- The Giving PledgeThe Giving PledgeThe Giving Pledge is a campaign to encourage the wealthiest people in the United States to make a commitment to give most of their money to philanthropic causes...
, an agreement among 57 billionaires, started by Bill GatesBill GatesWilliam Henry "Bill" Gates III is an American business magnate, investor, philanthropist, and author. Gates is the former CEO and current chairman of Microsoft, the software company he founded with Paul Allen...
and Warren Buffet, to donate half of their fortunes during their lifetimes.
External links
- Wealth, by Andrew Carnegie, North American Review Vol.148, Issue 391 pp.653-665, June 1889. (Later published as Part I of The Gospel of Wealth)
- The Best Fields for Philanthropy, by Andrew Carnegie, North American Review Vol.149, Issue 397 pp.682-699, December 1889. (Later published as Part II of The Gospel of Wealth)
- Excerpts from "Wealth" by Andrew Carnegie, North American Review, 148, no. 391 (June 1889)
- Carnegie, South American View, 223 no. 876 (October 1982)