Andrew Carnegie

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Andrew Carnegie : biography

November 25, 1835 – August 11, 1919

On the surface, Andrew Carnegie appears to be a strict laissez-faire capitalist and follower of Herbert Spencer, often referring to himself as a disciple of Spencer.Carnegie, Andrew (2009-12-14). The Autobiography of Andrew Carnegie and The Gospel of Wealth (pp. 163-171). Neeland Media LLC. Kindle Edition. Conversely, Carnegie a titan of industry seems to embody all of the qualities of Spencerian survival of the fittest. The two men enjoyed a mutual respect for one another and maintained correspondence until Spencer’s death in 1903. There are however, some major discrepancies between Spencer’s capitalist evolutionary conceptions and Andrew Carnegie’s capitalist practices.

Spencer wrote that in production the advantages of the superior individual is comparatively minor, and thus acceptable, yet the benefit that dominance provides those who control a large segment of production might be hazardous to competition. Spencer feared that an absence of “sympathetic self-restraint” of those with too much power could lead to the ruin of his competitors.Spencer, Herbert 1887 (The Ethics of Social Life: Negative Beneficence). The Collected Works of 6 Books (With Active Table of Contents) (Kindle Locations 26500-26524). Kindle Edition. He did not think free market competition necessitated competitive warfare. Furthermore, Spencer argued that individuals with superior resources who deliberately used investment schemes to put competitor out of business were committing acts of “commercial murder”. Carnegie built his wealth in the steel industry by maintaining an extensively integrated operating system. Carnegie also bought out some regional competitors, and merged with others, usually maintaining the majority shares in the companies. Over the course of twenty years, Carnegie’s steel properties grew to include the Edgar Thomson Steel Works, the Lucy Furnace Works, the Union Iron Mills, the Homestead Works, the Keystone Bridge Works, the Hartman Steel Works, the Frick Coke Company, and the Scotia ore mines among many other industry related assets.Morris, Charles R. (2010-04-01). The Tycoons: How Andrew Carnegie, John D. Rockefeller, Jay Gould, and J. P. Morgan Invented the American Supercompany (p. 132). Macmillan. Kindle Edition. Furthermore, Carnegie’s success was due to his convenient relationship with the railroad industries, which not only relied on steel for track, but were also making money from steel transport. The steel and railroad barons worked closely to negotiate prices instead of free market competition determinations.Nasaw, David (2007-10-30). Andrew Carnegie (Kindle Locations 3264-3278). Penguin. Kindle Edition.

Besides Carnegie’s market manipulation, United States trade tariffs were also working in favor of the steel industry. Carnegie spent energy and resources lobbying congress for a continuation of favorable tariffs from which he earned millions of dollars a year.Nasaw, David (2007-10-30). Andrew Carnegie (Kindle Locations 7114-7119). Penguin. Kindle Edition. Carnegie tried to keep this information concealed, but legal document released in 1900, during proceeding with the ex-chairman of Carnegie Steel Henry Clay Frick revealed how favorable the tariffs had been.Nasaw, David (2007-10-30). Andrew Carnegie (Kindle Locations 10653-10657). Penguin. Kindle Edition. Herbert Spencer absolutely was against government interference in business in the form of regulatory limitation, taxes, and tariffs as well. Spencer saw tariffs as a form of taxation that levied against the majority in service to “the benefit of a small minority of manufacturers and artisans”.Spencer, Herbert. Principles of Ethics, 1897 (Chapter 22: Political Rights-So-called). (With Active Table of Contents) (Kindle Locations 24948-24956). Kindle Edition.

Despite Carnegie’s personal dedication to Herbert Spencer as a friend, his adherence to Spencer’s political and economic ideas is more contentious. In particular, it appears Carnegie either misunderstood or intentionally misrepresented some of Spencer’s principal arguments. Spencer remarked upon his first visit to Carnegie’s steel mills in Pittsburgh, which Carnegie saw as the manifestation of Spencer’s philosophy, "Six months’ residence here would justify suicide."Wall, Joseph Frazer. Andrew Carnegie. p 386. Pittsburgh: University of Pittsburgh Press. 1989.