In Andrew Carnegie’s article "The Gospel of Wealth," Carnegie discusses the proper ways to deal with inequality in wealth. He starts off by discussing how inequality in society formed, noting that in earlier societies, leaders and their followers lived essentially the same lives. He goes on to say that innovations in management and technology gradually led to a civilization where both laborers and the owners of production have better lives than in earlier societies, but the improvement for the laborers was much smaller than for the owners of production. This occurred because manufacturing improved over time, lowering the cost of goods and improving quality. Those who owned the manufacturing concerns gradually accumulated wealth and created more production capacity. Carnegie believes that this is the natural state of things. Either an enterprise produces profit and grows, enriching the owners, or it produces losses and shrinks, making the owners poorer. This naturally leads to a society where there are the poor laborers and the rich production owners. He feels there is nothing wrong with this and, in fact, that this competition makes life better for everyone by driving innovation and reducing the cost of goods. After this point, Carnegie focuses on the best ways the wealthy can distribute their money.
Carnegie believes there are three ways the wealthy can do this: give their money to their family upon their death, pass it to the state in the form of estate taxes, or administer it during their lives for the public good. He believes that giving it to family is a poor way to distribute the money because it will make family members live a life of idleness, which is bad for them in the competitive society that Carnegie believes is natural. Thus, he thinks that estate taxes should be very high to discourage this, as the state could use the money better than the family. In turn, he believes that this will encourage the wealthy to administer their money during their lives for the betterment of society, because they can control where the money goes. This charitable giving solves inequality, while not subverting what Carnegie believes to be the natural state of production. Carnegie calls this his Gospel of Wealth.