I finally finished the 800-page biography of Andrew Carnegie, which perhaps is a sign of having too much time on my hands.
The strongest impression that I get from the book is that Carnegie was the Bill Gates of his day. Carnegie became the richest man in the world through a combination of intelligence, hard work at an early age, a certain amount of what we today would regard as illegal insider trading, and connections. Once he was the richest guy in the world, everyone listened to everything he said very carefully. He looked around and decided that the greatest evil facing the world was war. War did not provide who was right, only who was stronger. After concluding that he was, in addition to being the richest guy in the world, probably one of the smartest, he invested much of his money and most of his energy in achieving peace among nations. Folks such as Teddy Roosevelt privately thought that he was an old fool, but nobody would say it to his face. Carnegie pushed for peace and mediation among nations and spent four of the last five years of his life watching World War I sweep through Europe.
[The analogy with Bill Gates is that, after becoming both the richest and smartest guy in the world, he decided that he could solve the problems of poverty and disease in Africa that had defied attempts by the world’s biggest governments and NGOs.]
Some parts of the book that stuck out for me…
Page 113: In December 1868, Carnegie was 33 years old and had accumulated a fortune of $400,000, equivalent to $75 million today. He decided that this was sufficient for a comfortable lifestyle and whatever he earned on top of the $75 million would be spent on charity. Carnegie is well known for believing that, since wealth was only possible in an advanced society, accumulated wealth should be returned to the community. What is not well known is that he thought it was only incumbent upon men to start doing this once they’d risen out of the middle class lifestyle that $75 million would provide!
Page 133: Carnegie retired at age 37, the same age that Rossini retired (and the author of this Weblog).
Page 141: Much of Carnegie’s wealth was owed to tariffs, proving then as now that lobbying the federal government is the best investment that any business can make. The free trade advocates in the 1870s were the Democrats, though. Carnegie was a Republican and it was the pro-business Republicans who stuck it to American consumers with big tariffs that prevented efficient British steel manufacturers from dominating the U.S. market.
Page 150: “Carnegie was, it appeared, as he approached age forty, beginning to advertise his availability as an eligible bachelor.”
Page 197: “Carnegie, who [age 44] was only two years younger than Louise’s father would have been, appeared at first a most unlikely suitor for the 23-year-old woman. He was tiny, white-bearded, devoted to and living with his mother, and growing stouter by the day.”
Carnegie did not preach hard work. He believed that wealth came from having the right connections and capable subordinates.
Page 203: “Your always busy man accomplishes little; the great doer is he who has plenty of leisure.” It was the height of foolishness, he had found, to delay gratification and put off retirement until one was too old to enjoy it. … “Among the saddest of spectacles to me is that of an elderly man occupying his last years grasping for more dollars.” Americans, Carnegie declared, were of all the world’s peoples the most victimized by a work ethic gone mad. … “Americans were the saddest looking race we had seen. LIfe is so terribly earnest here. Ambition spurs us all on, from him who handles the spade to him who employes thousands.” … Americans, Carnegie was convinced, worked harder than was necessary and much harder than the British. [some things never change!] “No toilers, rich or poor, like the Americans!” he remarked.
Page 257: “I believe the day is coming when a man who leaves more than a million at his death, except for public uses, will be regarded as not having properly administered that for which he was only the trust.” [$1 million back in 1885 was probably more like the $75 million figure we got earlier, so don’t feel bad if you are leaving the McMansion to the kids…]
Carnegie thought that giving big $$ to children was a bad idea.
Page 352: Poverty, he claimed, not wealth, was the “only school capable of producing the supremely great, the genius.” Inherited wealth robbed the inheritors of their self-respect and blocked the “fittest” from advancing. No society could reach its highest potential if it gave the rich an advantage over the poor in attaining positions of leadership and responsbility.
Page 363: In 1888, the unskilled mill workers, mostly recent immigrants from Eastern Europe, earned 14 cents/hour, equivalent to $3/hour in today’s money. [This compares to $5-11/hour for unskilled recent immigrants working in the U.S. today]
Carnegie wanted to be respected as a writer and tapered down his work responsibilities so that he would have more time to write. The less he needed to do, though, the less he was able to do.
Page 399: “It does not seem possible for me to get down to work,” he wrote Champlin; “really I don’t feel able to sit down and apply myself.”
Page 662: “I think the Scotch a pretty smart people, but I must say I think the Jews are smarter. I think I’m a little afraid of them.” [quoted by the New York Times]
Page 695: “The time is coming, much more rapidly than we dream when war will be a thing of the past.” [1907, Carnegie aged 72]
Page 707: “Those who want to start on their own account without capital betray a lack of judgment that will prevent them from ever being successful men.” [i.e., you’ll impress more people by raising money and underperforming the S&P 500 than you will by using your own limited resources and achieving a return on investment of 200 percent]
Page 767: Carnegie leaves his wife with all of his real estate (worth $100 million today?) and the modern equivalent of at least $25 million in today’s money in liquid assets. This was considered a minimal bequest.
Page 794: The richest man in the world, who had traveled everywhere and could have lived anywhere, chooses to spend the last years of his life at Shadowbrook, a 900-acre estate on Lake Mahkeenac, two miles west of Lenox, Massachusetts. Maybe a friend from Pittsfield was right when she observed that the Berkshires are the most beautiful place in the world.
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