The publisher should be taken to task for really atrocious editing. There are words that are unfinished, random letters showing up all over and even paragraphs and pages being repeated. This was very hard to read.

I had bought this book to read the essay “The Gospel of Wealth” by none other than the industrialist Andrew Carnegie who had become the richest person in the world. Not to suggest that I have a problem of wealth that he did, but I am getting more and more curious about how to dispose of a couple of dollars I might have left when I die. A friend from Scotland had mentioned that my philosophies of money matches his and that I should read it. (I did not know Carnegie was Scottish, so my friend might have had a vested interest here 🙂 )

Once I got past the editor’s obvious sleeping at the desk, I absolutely loved the messages Carnegie has.

On making money

First, he establishes that capitalism is the right thing. Socialism cannot work in the long term. He believes there is nothing wrong with only some people making a lot of money thru the dint of their hard work and talent. As long as done ethically and with integrity. The society and community should be structured to let the hard working and talented make a lot of money.

Second, he is dead against being rich thru inheritance. Wealth has to be made by yourself thru hard work, he says. And on this, he feels people born poor have slight advantage that they are likely to strive harder than those who already have money. More on inheritance later.

Third, he is dead against wealthy people showing off or living lavish lives. To him, there are two phases of life – you work hard to make money and then you find the best way to dispose of it. It is not about consuming it yourself in excess.

So, how do you dispose of it?

This is where he believes that with great wealth comes great responsibility. He describes somebody who dies with a lot of money in the bank as “The man who dies thus rich dies disgraced”.

How not to dispose of money

First, he is against indiscriminate charity. To him that is thoughtless and taking the easy way out. He believes the wealthy man has far greater responsibility than throw away money to charity. Also, he is severe in his criticism of how much money given to charity actually reaches the folks for who the charity is raised.

Second, he does not believe too much money should be given to children. Just enough so that they may not come to terrible days. He suggests “moderate sources of income” for the wife and daughters and “very moderate, if any, moderate allowances” for the sons. (Of course, this is set in a society where women had a different place than modern America).

For this reason, he favored heavy taxation on inheritance. To him, the “State (needs to) mark its condemnation of the selfish millionaire’s unworthy life”.

How to dispose of money

To Carnegie, one needs to make the wealth work for greater good of the community. The person needs to take active interest in the utilization of that wealth. It should be a cause for the society or community for a greater good. Above all, it has to be something the person feels passionate about. If one has no particular passion about a greater good for the community, Carnegie considers them selfish for benefitting from the community but having no interest in the community’s good.

His suggestion is to create a trust fund. And then he gives some ideas he personally has. But he leaves it to the individual’s judgment and passion. His suggestions, in order of his personal interests are

(*) University or any institution of education or knowledge
(*) Library
(*) Hospitals (or medical colleges, labs and institutions involved in alleviation of human suffering)
(*) Public Parks
(*) Halls/Galleries for music and art
(*) Swimming baths!! (this was interesting. It seems in England those days, this was common – not so in America). I guess, this would be what we call community swimming pools today
(*) Churches

In summary, in his own words…

“To set an example of modest, unostentatious living, shunning display or extravagance; to prove moderately for the legitimate wants of those dependent upon him; and, after doing so, 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.”

Now, this book has a few other essays if you want. I was intrigued by his take on “Capital versus Labor” (which is going to be anathema to most all Private Equity firms). He is of the opinion Capital and Labor are not against each other and that the permanent relationship between those two have not been set yet. He is an ardent believer of labor unions and explains why this is a good thing.

There are other essays like “Americanism versus Imperialism” and “Democracy in Europe” if you are interested.