The phoney pa­tri­arch

The Herald - Arts - - Books - The big read ANDREW CARNEGIE David Na­saw Pen­guin £18.99

Out of the Big Four of the so­called heroic age of Amer­i­can busi­ness – Andrew Carnegie, JP Morgan, JD Rock­e­feller and Henry Ford – Carnegie un­doubt­edly emerges as the most in­ter­est­ing psy­cho­log­i­cal study. He was a con­tra­dic­tory, mul­ti­tudi­nous man in Walt Whit­man’s sense.

Born in Dun­fermline, he was the son of a weaver who em­i­grated to the US in 1848. The young Carnegie got a job as a tele­graph op­er­a­tor and soon mas­tered both that trade and the en­tire in­tri­cate sys­tem of Amer­i­can rail­roads. By 1860, at the age of 25, he was the su­per­in­ten­dent of the West­ern Di­vi­sion of the Penn­syl­va­nia Rail­road and, as such, vi­tal to the Union war ef­fort when civil war broke out the fol­low­ing year. Granted ex­emp­tion from the draft, Carnegie was able to avoid the blood­let­ting and con­cen­trate on busi­ness: he made his first big money in 1862 by in­vest­ing in an oil com­pany, then di­ver­si­fied into steel.

By the end of the war he was al­ready worth $8m in to­day’s money. Carnegie was lucky to live in an era of rapid tech­no­log­i­cal ad­vance and ben­e­fited par­tic­u­larly from the ex­plo­sion of rail­ways in the US, for which he sup­plied the iron and steel. But David Na­saw makes the im­por­tant point that Carnegie scaled the fi­nan­cial heights not sim­ply by man­u­fac­tur­ing iron and steel but by stock-mar­ket spec­u­la­tion in an era when in­sider trad­ing was le­gal (it was not out­lawed in the US un­til 1934). It was a side to his ca­reer the disin­gen­u­ous Carnegie cov­ered up in his self-serv­ing and men­da­cious au­to­bi­og­ra­phy.

By the early 1870s he was reg­u­larly criss­cross­ing the At­lantic, stitch­ing to­gether com­plex fi­nan­cial deals. Here again he ben­e­fited from the tech­no­log­i­cal revo­lu­tion. By 1870 it took just eight days to sail from New York to Eng­land, whereas in 1848, when Carnegie first made the trip as a poor em­i­grant, the voy­age had lasted 42 days. Carnegie’s im­por­tance in the 1870s was that he was the chief, and of­ten the only, li­ai­son b e t w e e n E u r o p e a n b a n k e rs a n d the Amer­i­can en­trepreneurs in rail­way, road and bridge con­struc­tion; only he knew how all the pieces in the jig­saw fit­ted to­gether.

Hav­ing weath­ered the deep fi­nan­cial cri­sis of 1873 with­out sig­nif­i­cant losses, chiefly through fol­low­ing his own maxim that one should never en­dorse an­other’s loans, Carnegie went from strength to strength and was soon the rich­est man in the world. When he sold his com­pany, Carnegie Steel, to JP Morgan in 1901 (Morgan formed a new com­pany called US Steel), he re­ceived $226m ($120bn in to­day’s money). Re­turn­ing to his na­tive coun­try, he re­tired to Sk­ibo Cas­tle in Suther­land and an­nounced his in­ten­tion to give away his for­tune be­fore he died. He en­dowed hun­dreds of li­braries, en­riched the cities of Pitts­burgh and Dun­fermline, and show­ered bene­fac­tions on univer­si­ties on both sides of the At­lantic. He man­aged to give away tens of bil­lions in to­day’s money and left a rel­a­tively small amount to be given away in his will.

Carnegie did not just make fab­u­lous amounts of money; he also wrote about the the­ory of riches in books ex­pound­ing what he termed the “gospel of wealth”. De­cry­ing so­cial­ism as a creed for dream­ers and losers, he em­braced Her­bert Spencer’s then cul­tur­ally hege­monic the­o­ries of so­cial Dar­win­ism and ar­gued that the ty­coon was a bene­fac­tor, a kind of trustee for the com­mu­nity.

Ac­cord­ing to Carnegie, the mil­lion­aire ben­e­fited his com­mu­nity twice over. He made money, thus en­rich­ing oth­ers through the trickle-down ef­fect, and he then show­ered fur­ther largesse on the com­mu­nity by giv­ing money away. It was far bet­ter, Carnegie thought, to pro­vide li­braries, univer­si­ties and con­cert halls with t h e su r p l u s ex­tracted from the worker than to pay higher wages, which would be frit­tered away on drink and un­nec­es­sary con­sumer goods. Thus he posed as the friend of the or­di­nary work­ing man.

Na­saw clearly shows how this pose was a sham. If the price of steel fell, Carnegie cut wages ruth­lessly. No be­liever in col­lec­tive bar­gain­ing, he used armed thugs, sher­iff deputies and Pinker­ton agents to crush the steel unions where nec­es­sary. A no­to­ri­ous armed con­fronta­tion af­ter a lock­out at the Home­stead Steel Works in Penn­syl­va­nia in 1892 led to a dozen deaths. Carnegie liked to d is­tance him­self f ro m the dirty work, and was said to be in­com­mu­ni­cado in Scot­land at the time of the Home­stead in­ci­dent, but in re­al­ity he was di­rect­ing the con­fronta­tion by tele­gram.

The word that most read­ily comes to mind af­ter a pe­rusal of Carnegie’s self­jus­ti­fy­ing screeds is phoney. His book

Tri­umphant Democ­racy, for ex­am­ple, a paean to the United States as utopia, is a piece of Pan­glos­sian non­sense. Ac­cord­ing to this tome, in nine­teenth-cen­tury Amer­ica t h e re wa s n o v i o l e n c e , cor­rup­tion, racial dis­crim­i­na­tion, labour prob­lems or class dis­tinc­tions. But he does at least have the grace to ad­mit that the key to worldly suc­cess is a sim­ple mat­ter of be­ing in the right place at the right time.

In short, Carnegie was a slip­pery, men­da­cious and du­plic­i­tous cove, and Na­saw has done well to re­veal the re­al­ity be­hind all the cant. The Scot was a man of great intelligence, self-taught and widely read, who could re­cite vir­tu­ally the whole of Shake­speare and Robert Burns from me­mory. To his credit, he be­lieved that ev­ery busi­ness­man should have a lib­eral ed­u­ca­tion rather than the nar­rowly fo­cused MBA of our era, for suc­cess in busi­ness de­pends on un­der­stand­ing hu­man na­ture, and the great lit­er­a­ture of the past taught that more suc­cess­fully than cour­ses on ac­coun­tancy and ad­min­is­tra­tion.

But Carnegie shared the faults of most au­to­di­dacts in over­rat­ing his own in­tel­lec­tual ca­pac­ity. He was a tire­some know-all who, in his own mind, knew ev­ery­thing about ev­ery­thing and thought noth­ing of cor­rect­ing world ex­perts in their own ar­eas of spe­cial­ism. He had lit­er­ary pre­ten­sions and courted the com­pany of men like Matthew Arnold, Her­bert Spencer and Mark Twain, as well as politi­cians such as William Gladstone, Teddy Roo­sevelt and John Mor­ley.

They tol­er­ated him be­cause of his wealth; Roo­sevelt se­cretly de­tested him but ma­nip­u­lated him into pay­ing for one of his lux­ury big-game hunt­ing sa­faris in Africa. He loathed Carnegie’s paci­fism and anti-im­pe­ri­al­ism (Carnegie pub­licly op­posed both the Bri­tish in the Boer War and the Amer­i­can an­nex­a­tion of the Phillippines) and thought him a hum­bug. Why, Roo­sevelt mused, would one ag­o­nise about the vic­tims of war but not the vic­tims of cap­i­tal­ism? Why were the suf­fer­ing of Filipinos to be de­plored but not those of un­der­paid steel­work­ers?

The truth is that Carnegie was a psy­cho­log­i­cal odd­ity. Twain, in the pri­vacy of his jour­nals, de­nounced him as an ego­ma­niac. Carnegie, he said, was in­ca­pable of re­flec­tion or self-knowl­edge. Self-de­lud­ing, he imag­ined him­self coura­geous and orig­i­nal, but was in fact con­ven­tion­ally minded and star-struck by kings and em­per­ors and the at­ten­tion they seemed to lav­ish on him.

Two facets of Carnegie were es­pe­cially salient. Only five feet tall, he was deeply sen­si­tive about his height and wore top hats and high-heeled boots to con­ceal his lack of stature. Pho­to­graphs show him to be a troll-like crea­ture with a white Santa Claus beard. The other psy­cho­log­i­cal quirk about Carnegie was his “mother com­plex”. Ob­sessed by his mum in a way per­haps only Norman Bates could ap­pre­ci­ate, he re­fused to marry un­til she died, even though he claimed to have found the love of his life 10 years ear­lier; the poor wo­man was kept hang­ing around un­til the ma­tri­arch passed away.

There are many other quirks and odd­i­ties in the Carnegie story but, de­spite his ruth­less­ness, lies and se­vere hu­man de­fi­cien­cies, it be­comes hard not to feel sorry for him as Na­saw ends his story with a tale of heart­break­ing dis­il­lu­sion­ment. It was al­most as though Carnegie was granted a long life (he died at the age of 83) sim­ply so that he could see all his hopes for a new world or­der turn to dust. Like his fel­low ty­coon Henry Ford, a con­vinced paci­fist, Carnegie had the slaugh­ter of the First World War as a pay-off for all his ef­forts for world peace. This is an ab­sorb­ing bi­og­ra­phy and, though it is maybe two hun­dred pages too long, Na­saw is to be ap­plauded for his schol­arly labours.

The diminu­tive Andrew Carnegie, cen­tre, re­lax­ing on board his yacht with Sir John Ross, left, and Sir W Robert­son

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