According to Andrew Carnegie's essay "The Gospel of Wealth," how should wealth be used? What is the best way to use it?

In his essay "Wealth," published in the North American Review in 1889, the industrialist Andrew Carnegie argued that individual capitalists were duty bound to play a broader cultural and social role and thus improve the world. Carnegie's essay later became famous under the title "The Gospel of Wealth." Carnegie believed that the wealthy should use their money to improve society by establishing institutions that would assist poor people in improving their situations. 

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In 1889, Andrew Carnegie set out to tell the world just what he thought successful capitalists like him had the responsibility to do with their fortune. This was a time of rising wealth inequality, something that troubled Carnegie. As someone who experienced poverty in his youth, Carnegie felt that those...

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In 1889, Andrew Carnegie set out to tell the world just what he thought successful capitalists like him had the responsibility to do with their fortune. This was a time of rising wealth inequality, something that troubled Carnegie. As someone who experienced poverty in his youth, Carnegie felt that those more fortunate had a responsibility not to overlook the less fortunate in society, particularly when their wealth was derived from the labor of the poor.

At the time, most wealthy people gave surplus amounts of their fortune to their heirs or willed it to the state. Carnegie rejected this idea. He felt that the wealthy did not apply their fortunes to the betterment of the population as a whole when they spent it on self-serving projects. He felt that his peers too often wasted their fortunes in the name of extravagance and slothfulness. In contrast, Carnegie wrote that the wealthy should live modestly.

Even when they gave their money to charitable organizations, this was not enough. Too often, these organizations wasted the money that they were bequeathed. Carnegie argued that capitalists were better off directly applying their surplus wealth to social causes.

In his essay, Carnegie argued that the wealthy have the opportunity, indeed the responsibility, to use their financial power to focus on improving certain aspects of society. He felt that this would reduce the harmful stratification of society that was taking place. This would leave a legacy built on doing actual good rather than just the accumulation of wealth. Carnegie was more than just a man of words. Even before the publication of this essay, he had donated vast sums of his own money to build libraries and public baths all over the United States.

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For Carnegie, the acquisition of wealth has been a positive force in driving civilization; whatever ill effects have been accumulated for society in the march toward industrialization, they are far outweighed by the positive ones. Any attempts toward socialism or egalitarianism would, he argues, amount to taking a radical step backward and acting contrary to the larger interests of society and the human species.

For Carnegie, the best solution to the social ills of the industrial age will arise when the wealthy give back to the society which allowed them to build that wealth to begin with. He does hold that, historically, most wealthy individuals have passed their wealth down to their children, but he notes that this, in itself, is often to the detriment of those same children; it would be far better for the wealthy to instead gift the better part of their wealth to the larger benefit of society itself.

This being said, Carnegie's vision of charity is quite collectivist in certain respects. He's not speaking about alms-giving. For Carnegie, focusing one's charitable activities on individuals amounts to a waste of those resources. Rather, for Carnegie, the wealthy should focus on causes which would benefit society at large and allow individuals within that society a chance to rise above their poverty. He thinks that the wealthy are particularly well placed to do this, given the business and administrative skills which, within an industrial economy, were required in order to accumulate that wealth to begin with. These same skills could then be used for the benefit of society as a whole.

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Andrew Carnegie believed very strongly that the government should not be involved in the economy.  He also believed that it should not be involved in trying to improve society.  Instead, he believed that the richest people should be the ones to try to improve society.  They should use their wealth to do so.

Carnegie argued that three things could be done with excess wealth.  He believed that the rich could leave the money to their heirs.  He believed that they could leave it to charity when they died.  Lastly, he believed that they could spend it while they were alive to help improve society.  Carnegie felt that there were serious problems with each of the first two options.  He believed that the best use of wealth was for the rich man to

…consider all surplus revenues which come to him simply as trust funds, which he is called upon to administer, and strictly bound as a matter of duty to administer in the manner which, in his judgment, is best calculated to produce the most beneficial results for the community…

The best use for wealth, then is for the rich person to use it in ways that are, in his opinion, going to help society the most.

Carnegie believed that the best way to help society was to help people improve themselves.  He did not believe in simply giving money to the poor.  Instead, he believed in setting up institutions that would allow people to help themselves.  As he said,

In bestowing charity, the main consideration should be to help those who will help themselves; to provide part of the means by which those who desire to improve may do so; to give those who desire to use the aids by which they may rise; to assist, but rarely or never to do all. Neither the individual nor the race is improved by alms-giving.

So, what Carnegie believes is that the way to use wealth is for the rich man to, in his own lifetime, set up foundations and institutions that will not give alms but which will help those people who really are willing to work to improve themselves.

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