How Andrew Carnegie Built a Steel Empire and Became One of the Richest People in History
Short Answer:
Andrew Carnegie got rich by building and leading one of the most successful steel companies in American history, Carnegie Steel Corporation.
Andrew Carnegie was born in Scotland in 1835 and immigrated to the United States with his family when he was a child. He worked a variety of jobs in his youth, including as a telegraph messenger boy and in a cotton mill. In 1853, he landed a job as a telegraph operator for the Pennsylvania Railroad, which proved to be a turning point in his career.
Carnegie quickly rose through the ranks at the Pennsylvania Railroad, eventually becoming the superintendent of the Pittsburgh Division. During his time there, he became interested in the steel industry and began investing in it. In 1873, he left the railroad to start his own steel company, which he named Carnegie Steel Corporation.
Under Carnegie’s leadership, Carnegie Steel Corporation quickly became one of the most successful and profitable companies in American history. Carnegie used a variety of tactics to achieve this success, including vertical integration, where he controlled every aspect of the steel-making process from raw materials to finished products. He also implemented cost-cutting measures and innovative production techniques, such as the Bessemer process, which allowed him to produce steel more efficiently and at a lower cost than his competitors.
Carnegie’s success was not without controversy, however. He was criticized for his labor practices, including his use of strikebreakers and his opposition to unionization. In 1892, a strike at one of his factories in Homestead, Pennsylvania turned violent, resulting in the deaths of several workers and members of the Pinkerton Detective Agency, which Carnegie had hired to break the strike.
Despite these challenges, Carnegie continued to grow his business and his fortune. In 1901, he sold Carnegie Steel Corporation to J.P. Morgan for $480 million, making him one of the wealthiest people in the world at the time. He went on to devote the rest of his life to philanthropy, donating millions of dollars to libraries, universities, and other charitable causes.
Philanthropy
Andrew Carnegie’s philanthropy was a defining aspect of his legacy. Despite accumulating vast wealth through his steel business, Carnegie was committed to giving away the majority of his fortune to causes he deemed worthy.
Carnegie believed that the rich had a moral obligation to use their wealth to benefit society, and he famously wrote that “the man who dies rich, dies disgraced.” He believed that the best way to use his wealth was to fund institutions that would promote social progress and advance the common good.
One of Carnegie’s most significant philanthropic efforts was his support of public libraries. He donated millions of dollars to build over 2,500 public libraries across the English-speaking world, including the United States, Canada, and the United Kingdom. Carnegie believed that access to books and knowledge was essential for individuals to improve their lives and for society to progress.
Carnegie also established a number of other philanthropic organizations, including the Carnegie Foundation for the Advancement of Teaching, which worked to improve education in the United States, and the Carnegie Endowment for International Peace, which was founded to promote peace and prevent war.
However, Carnegie’s philanthropy was not without controversy (Twitter would have had a field day with Carnegie). Some criticized him for using his wealth to shape society according to his own beliefs and for promoting a philanthropic model that put the power in the hands of the wealthy rather than the government. Others argued that Carnegie’s philanthropy was a way for him to absolve himself of guilt for the labor strife and violence that occurred at his steel mills.
Despite these criticisms, Carnegie’s philanthropy had a lasting impact on society. His support of public libraries helped to create a more educated and literate population, and his emphasis on advancing the common good paved the way for future generations of philanthropists to use their wealth for social progress.
Andrew Carnegie died in 1919 with an estimated net worth of around $30 million which went to his Corporation’s endowment ($320 million of his net worth had already been distributed in the above philanthropic efforts). Andrew’s peak net worth of $350 million is equivalent to billions of dollars in today’s currency.
Andrew Carnegie’s legacy was the true American success story of rags to riches. His steel empire and philanthropic efforts changed America and his belief in giving back was revolutionary at the time, inspiring future generations of the elite to do the same.