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Gospel of Wealth

Gospel of Wealth

What do you do if you have millions or billions of dollars? You give it away, of course! According to "Gospel of Wealth" author Andrew Carnegie, it was the God-given responsibility of the wealthy elite to give away their money to help the less fortunate. During the Gilded Era (the late eighteenth to the nineteenth century), heavy industry and corporations dominated people's lives, and many were stricken with poverty. In his "Gospel of Wealth" essay, Carnegie argues against wasting money on extravagance and other forms of self-indulgence. Continue reading to see how Carnegie proposed dealing with the wealth inequality of the Gilded Era!

Gospel of Wealth Definition

The Gospel of Wealth was an essay written by wealthy industrialist Andrew Carnegie in 1889. The paper describes the responsibilities of the wealthy, the impacts of capitalism, and the solution to the inequality problem.

Gospel of Wealth Historical Context

Three main ideas help contextualize Carnegie's Gospel of Wealth in history:

  • America's role in the Gilded Era.
  • Rapid American industrialization.
  • The theory of Social Darwinism.

The Gilded Era

The Gilded Era was a period of rapid economic and industrial growth that led to wealthy industrialists controlling every aspect of American industry to reap the financial benefits.

Gospel of Wealth Political Cartoon depicting Captains of Industry and the laborers StudySmarterFig. 1 Political Cartoon depicting Captains of Industry and the laborers.

A significant wealth gap occurred during this era between the industrialists/businessmen and the lower classes. Problems also occurred when labor unions and factory owners collided. Deep corruption often plagued many areas of American society, especially in industries.

Industrialization

The Second Industrial Revolution saw several growing industries, including railroads, steel, and mining. Large factories and assembly lines helped revolutionize the production of goods and facilitated cheaper-priced products. Skilled artisans and laborers became outdated as the need for unskilled, wage workers rapidly increased. While the need for unskilled laborers soared, jobs for skilled laborers were also created. Industrialization also strongly influenced America's social structure, making the middle class.

Gospel of Wealth Carnegie Steel Plant StudySmarterFig. 2 The Carnegie Steel Plant.

The middle class rose from an industrial need for managers, secretaries, and bookkeepers to run everyday operations. Both men and women were hired to fill these positions, with women taking on most clerical and secretary jobs. The need for this new managerial staff facilitated the emergence of the middle class. This social class accumulated plenty of leisure time and a steady income that they used to help fuel the economy.

The Gilded Age economy functioned on the principle of laissez-faire policies which helped certain business people amass great wealth. At the end of the nineteenth century, one percent of the population controlled twenty-five percent of the country's wealth. The significant wealth gap helped fuel disputes between labor unions and factory owners.

Laissez-Faire

The political and economic principle that advocates the lack of government interference in the free market.

Social Darwinism

The social theory of Social Darwinism dominated the Gilded Era and believed that the wealthy were the more robust species while the weak were the poor and poverty-stricken.

Gospel of Wealth Herbert Spencer an English philosopher who created the principle of Social Darwinism StudySmarterFig. 3 Herbert Spencer, an English philosopher who created the principal of Social Darwinism Source: Wikimedia Commons

Social Darwinism began to take hold in American society in the 1870s and continued throughout the rest of the nineteenth century. Proponents of the social theory embraced laissez-faire policies where the government took a hands-off approach to economic competition.

Did you know?

The "Gospel of Wealth" was featured in the North American Review and later published in the Pall Mall Gazette.

Andrew Carnegie Gospel of Wealth

Carnegie worked from a young age and eventually became one of the wealthiest industrialists of his time. Head of a massive steel company, Carnegie Steel, he vertically integrated his company, consolidating all the methods needed for production. Integrating his company vertically, Carnegie controlled every phase of steel production - from mining the iron ore, its transportation on railroads, and its manufacture in steel mills.

Vertically Integrated

The combination of one or more production processes within a business but operated by other companies.

Due to the success of his company, he amassed great financial success. He believed his responsibility was to use his money to benefit others with this wealth.

The problem of our age is the proper administration of wealth so that the ties of brotherhood may still bind together the rich and poor in a harmonious relationship.1

- Andrew Carnegie, "Gospel of Wealth," 1889

Carnegie believed that appropriate management of the wealthy's money could bring people together instead of widening the societal gap between the rich and poor.

Gospel of Wealth Andrew Carnegie StudySmarterFig. 4 Andrew Carnegie

Strongly identifying with his philanthropic beliefs, Carnegie wrote the Gospel of Wealth in 1889. Coming from a poor Scottish immigrant family, Carnegie understood the struggles faced by the poor. Later in his life, Carnegie would come to donate almost 90% of his wealth. However, Carnegie did not support the charity but instead wished to create opportunities for the community to help themselves. Therefore, he focused his philanthropic work on libraries and universities.

Gospel of Wealth Meaning

Carnegie wished for other wealthy elite to take part in their God-given responsibility of philanthropic work. His key points in the essay focused on the philanthropic responsibility of the rich and included defending the wealthy. Within his article, he also discusses capitalism's positive and negative attributes.

Gospel of Wealth Andrew Carnegie's philanthropy shown as showering people with money 1903 StudySmarterFig. 5 Andrew Carnegie's philanthropy is shown as showering his money, 1903.

Carnegie believed that capitalism brought a positive impact by decreasing the prices of goods and making luxurious goods a necessity for living. Interestingly, Carnegie points out that an adverse effect of capitalism is the product of great inequality. Maintaining his support for attaining massive wealth, Carnegie also instructed other individuals on how to spend their wealth. He believed the rich should follow a humble lifestyle and not publicly flaunt their wealth. Carnegie also thought that philanthropy was the critical solution to the problem of inequality.

Who agreed with Carnegie?

Due to his defense of wealth and pushback on the redistribution of money, Carnegie's most prominent supporters were the elite class.

However, both the poverty-stricken and labor unions strongly disagreed and wished to implement more radical policies regarding wealth. For example, many wanted to have the forced redistribution of wealth, essentially communism, to answer the wealth gap.

Gospel of Wealth Summary

Carnegie's essay on wealth is considered one of the fundamental founding principles of philanthropy. In the text below, notice how Carnegie likens philanthropy to embodying the spirit of Jesus.

Poor and restricted are our opportunities in this life; narrow our horizon; our best work most imperfect; but rich men should be thankful for one inestimable boon. They have it in their power during their lives to busy themselves in organizing benefactions from which the masses of their fellows will derive lasting advantage, and thus dignify their own lives. The highest life is probably to be reached, not by such imitation of the life of Christ as Count Tolstoi gives us, but, while animated by Christ's spirit, by recognizing the changed conditions of this age, and adopting modes of expressing this spirit suitable to the changed conditions under which we live; still laboring for the good of our fellows, which was the essence of his life and teaching, but laboring in a different manner.2

- Andrew Carnegie, Gospel of Wealth, 1889

Gospel of Wealth Significance

Carnegie's essay on wealth is a defining piece of literature in the Gilded Age. The Gospel of Wealth influenced much of the upper class, like fellow industrialist John D. Rockefeller, who donated much of his wealth to philanthropic endeavors. Yet, there were also negative consequences of Carnegie's essay.

Gospel of Wealth Portrait of John D. Rockefeller StudySmarterFig. 6 Portrait of John D. Rockefeller.

Some wealthy businessmen used the Gospel of Wealth to excuse their riches. In his essay, Carnegie upheld a dominant social theory of the era, Social Darwinism, believing that the wealthy are the most intelligent and superior species. In defending this societal theory, Carnegie condones its continued belief.

Gospel of Wealth - Key takeaways

  • Andrew Carnegie wrote the Gospel of Wealth in 1889.
    • Key Points of the Gospel of Wealth:
      • Capitalism allowed for the decrease in prices of luxurious goods that became a necessity for living.
      • The wealthy must be good stewards of their money and spend it on important public projects such as libraries, universities, etc.
      • Capitalism also was responsible for the wealth gap among people.
      • The wealthy should not flaunt their wealth but live humble lifestyles.
      • Carnegie believed that the answer to the social problem of inequality was for all wealthy to embrace philanthropy.
  • Three main ideas help contextualize Carnegie's Gospel of Wealth in history:
    • Rapid American industrialization.
    • The theory of Social Darwinism.
    • America's role in the Gilded Era.

References

  1. Andrew Carnegie, Gospel of Wealth, (1889)
  2. Ibid.

Frequently Asked Questions about Gospel of Wealth

The Gospel of Wealth is an essay written by Andrew Carnegie in 1889 on the responsibilities of the elite class to manage their wealth appropriately.  

Andrew Carnegie wrote the Gospel of Wealth in 1889. 

Andrew Carnegie wrote the Gospel of Wealth. 

The Gospel of Wealth states that it is the responsibility of the elite to manage their wealth in a way that benefits society and ties together all social classes. 

The Gospel of Wealth means that the rich needed to participate in the act of philanthropy or donate their money to worthy causes that benefited society as a whole. 

Final Gospel of Wealth Quiz

Question

List the three main ideas that help contextualize Carnegie's "Gospel of Wealth" in history. 

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Answer

1) Rapid American Industrialization 

2) The Theory of Social Darwinism 

3) America's role in the Gilded Age

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Question

What main idea is covered in Andrew Carnegie's "Gospel of Wealth"? 

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Answer

Wealth Gap Between the Upper and Lower Classes 

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Question

The middle class rose from an industrial need for: 

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Answer

managers, secretaries and bookeepers

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Question

The Gilded Age economy functioned on what economic principle? 

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Answer

Laissez-Faire

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Question

Not believing in charity, Andrew Carnegie donated his money to: 

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Answer

libraries and universities 

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Question

Carnegie believed that the act of _____________was critical to end the problem of inequality. 

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Answer

philanthropy 

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Question

Many labor unions and the lower class wished to answer the wealth gap with: 

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Answer

Redistribution of Wealth 

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Question

What economical and political system allowed for the price decrease of luxurious goods? 

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Answer

Capitalism 

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Question

In what year did Carnegie write "Gospel of Wealth"? 

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Answer

1889

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Question

Name the dominant social theory of the Gilded Era that influenced the wealth gap between classes. 

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Answer

Social Darwinism 

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