"The Gospel of Wealth" and True Philanthropy
—James R. Otteson
—James R. Otteson
Professor Steven Grosby’s interesting essay does not raise a new problem, but it does suggest a new—and provocative—way to address it. The problem, at bottom, is how to explain philanthropic behavior within the theory that human beings are self-interested, rational, utility maximizers. Grosby rightly indicates that, whatever else is true, human beings surely are notonly rational utility maximizers. They frequently, indeed routinely, sacrifice their own interests to serve the interests of others, and they also frequently “achieve satisfaction from acting in accord with what [they perceive] to be the right thing to do” even “at considerable cost [to themselves] while the benefit of the action accrues to another” (2009, 3). An example Grosby raises to illustrate his point is patriotism, especially in its ultimate expression: “Whatever the satisfaction derived by the individual in sacrificing his or her life, the benefit or return of this action accrues not to that individual but to the nation.”(2)
Hence Grosby concludes that natural human motivation is more complex than the homo economicus model allows. But the new and provocative direction in which Grosby takes this insight is to suggest that we might actually have “an interest in acting disinterestedly.”(13)
Exactly what this means and how Grosby gets there are somewhat complicated, and I shall not attempt to reproduce it all. Grosby’s argument stands on its own and requires no help from me. Instead, in this short comment I propose to raise an issue related to Grosby’s discussion, which I hope will illuminate an important implication of his position.
Consider the case of Andrew Carnegie (1835–1919). Carnegie was one of the wealthiest men in the world during his lifetime, and indeed one of the wealthiest men in the history of the world, in inflation-adjusted terms. One estimate suggests that his peak wealth would be roughly equivalent to $300 billion today, which would make him the world’s wealthiest person on earth by nearly a tenfold margin. In 1901 Carnegie sold his interest in U.S. Steel to J. P. Morgan for $480,000,000, the equivalent of more than $10 billion today, of which approximately $250 million (some $5 billion today) went directly to Carnegie himself. But Carnegie was not only a single-minded businessman. He also reflected deeply on the obligations people of wealth have toward their needier brethren.
Indiscriminate Almsgiving as an Evil
In 1889 Carnegie wrote an essay, “The Gospel of Wealth,” in which he argued against what he called “indiscriminate almsgiving.” He began with the claim that there is a legitimate and important distinction between deserving and non-deserving poor. Some people, Carnegie argued, are poor through no fault of their own: sometimes circumstances conspire against one, making it difficult to get ahead despite one’s best efforts. Such people, Carnegie said, deserve our help. On the other hand, some people are poor because of decisions they made that led to bad consequences. These, Carnegie thought, do not deserve our help. But because indiscriminate almsgiving does not heed this distinction, it rewards not only behavior that should be rewarded—such as effort, industry, and persistence—but also behavior that should not be rewarded—such as imprudence, irresponsibility, and idleness. Carnegie minces no words about this: “It were better for mankind that the millions of the rich were thrown into the sea than so spent as to encourage the slothful, the drunken, the unworthy” (2006, 11).
According to Carnegie, the wealthy person who gives to those asking for money without first determining whether the proposed recipient is deserving actually causes not one but two kinds of bad consequences. First, he encourages the undeserving to continue in their wayward behavior, by decreasing the costs of indulgence, and second, he discourages the deserving from continuing their industry and effort, by showing them that it is pointless. If they receive reward regardless of whether they put forth effort, why, all else being equal, would people want to continue putting forth effort? Thus in addition to enabling the idle and irresponsible poor to remain idle and irresponsible, the indiscriminate almsgiver works to increase their numbers by spreading a “moral infection” that slowly but inexorably converts their industrious brethren to consider the less noble but “easier path” of dependence (11). These facts, Carnegie thought, licensed calling indiscriminate almsgiving a “cancer” on society and indeed characterizing its effects as “evil” (47).
Carnegie was well aware that his position faces the practical problem of how to know whether a person asking for money is deserving. Even more difficult is to know whether a representative of the poor who is asking for money intends to, and in fact will, give the money only to those who deserve it. It is precisely this difficulty of gathering crucial information that Carnegie thought made effective giving such a daunting prospect: “Unless the individual giver knows the person or family in misfortune, their habits, conduct, and cause of distress, and knows that help given will aid them to help themselves, he cannot act properly” (46). However, because he believed that the “man of wealth” should become a “trustee and agent for his poorer brethren” (10) and “he who dies rich dies disgraced” (30), the moral imperative becomes urgent: find those who deserve help, find ways of giving that actually help them, and do it now.
Carnegie’s suggested avenues of help included founding museums, concert halls, libraries, and even universities—things that ministered not to people’s immediate material or physical needs but instead to the higher aspects of their humanity. Critics derided his suggestions for just this reason: what need has a hungry man for a library? He cannot, after all, eat the books. But Carnegie’s aim was to address not what merely kept people alive but rather, as Grosby puts it, “what it means to be human” (2009, 13). Grosby quotes Wilhelm von Humboldt as saying that “there is something degrading to human nature in the idea of refusing to any man the right to be human” (11). One way to refuse another the “right to be human” is by treating him like an animal. Here we must proceed with some delicacy, because the argument is easily misunderstood. When we offer someone a meal or money without asking how he got to his sorry state or offering to work together on strategies to rise out of it, we may stave off his hunger for a while, but our obligations to him are not yet fulfilled. We intend to refrain from judging him or embarrassing him, but by not engaging him in these serious conversations we treat him as if bodily needs are all there is to him. Asking him to give an account of himself and his actions, by contrast, displays our understanding that he is a reasoning and accountable creature; it manifests our belief that, whatever difficulties he may face, he is capable of taking steps to address them. It shows that we understand that his life is his own; it treats him like an adult; it treats him like a human being.
No-questions-asked “indiscriminate almsgiving” may provide a temporary abatement of a poor person’s desires, and it may save both the giver and the recipient the discomfort or awkwardness that often accompanies a difficult conversation that involves examining one’s life. But the Carnegiean argument, which is consistent with von Humboldt’s and I think Grosby’s as well, is that the personal moral obligation each of us has to needy others requires far more than a check. Giving money is easy—all too easy. Far more difficult, if far more important, is to treat others like human beings who are free and accountable adults. Thus the Carnegiean philosophy is not a mere pretense or rationalization to avoid helping others—that is the easy misinterpretation to which I referred earlier. The Carnegiean philosophy does not avoid responsibility. Instead, it insists on a responsibility to give, but it adds the substantially more difficult, correlated obligation of careful, personal investigation into who actually deserves help and what would actually constitute help.
Carnegie’s enormous and generous philanthropy later in his life is typically seen as a transparent attempt to atone for his alleged sins of greedy capitalist exploitation. Because he insisted on not helping those who did not deserve help, he has sometimes, moreover, received the unpleasant epithet “social Darwinist.” These are intemperate criticisms, usually based on little attention to what Carnegie actually did and what he actually wrote. Carnegie was one of the principal creators of a distinctively American tradition and expectation that once one had achieved a certain level of wealth one’s moral responsibility to one’s fellow citizens was to become their “trustee,” not in small but in great and expansive ways. The thousands of libraries he created, the performing halls he built, the churches to which he supplied pipe organs, the universities he founded: all are monuments to the seriousness with which he took his responsibilities as a trustee. The charge that in doing so Carnegie was acting only out of crass self-interest, perhaps to assuage his guilt, is refuted by his own words and deeds. He repeatedly stated that he acted out of duty, out of a notion that what he was doing was right, and out of a profound sense of service—true, not feigned or pretended service—to his fellow man.
Here, then, I suggest, is an instructive test case of Grosby’s analysis. Can we account for Carnegie’s behavior, the behavior of this quintessential “robber baron,” by assuming only rational self-interest? No. Even while fully engaged in making his fortune, Carnegie did not believe his actions were solely self-interested. As he would later write, “Consider the millionaire who continues to use his capital actively in enterprises which give employment and develop the resources of the world. He who manages the ships, the mines, the factories, cannot withdraw his capital, for this is the tool with which he works such beneficent wonders; nor can he restrict his operations, for the cessation of growth and improvement in any industrial undertaking marks the beginning of decay” (2006, 50). Carnegie no doubt saw himself as one such person, which contradicts the common perception that wealthy businessmen are in it only for the money. However we come, then, in the final analysis, to describe the motives that drove Carnegie to do what he did, it seems that it is a more complicated story than “self-interested utility maximization.” On this, it seems to me, Grosby’s analysis is correct.
Grosby concludes his essay with the provocative suggestion that “the imaginative capacity of the mind to transcend the interest of the self is what makes this limitless sympathy [which accounts for generosity even to strangers] possible. We can then conclude that it is possible to have an interest in acting disinterestedly” (2009, 13). What I think Grosby means there, and what I believe Carnegie exemplified, is that the philanthropic impulse is a natural part of human social relations (and any sane economic or political doctrine must account for it, not explain it away). Moreover, this impulse is not explicable solely by reference to self-interest, and it simultaneously both produces and assumes a fullness of human nature that exceeds the scope of, and is indeed nobler than, the impulses to self-preservation and to serving one’s own immediate interests. True philanthropy is undertaken by free and accountable beings in the service of other free and accountable beings, and the demands it places on both parties unite them in a joint project of making human life better. When Grosby recommends developing a desire to pursue “an interest in acting disinterestedly,” I believe he is suggesting that we are made better by acting philanthropically to help others realize their own ends. My extension of his argument is to suggest that we also, at the same time, make those others’ lives better not only by helping them realize their ends but also by helping them realize, and thus strengthening their ability to live up to, what it means to be truly human.
Carnegie, Andrew. 2006. The Gospel of Wealth and Other Writings. New York: Penguin Classics.
Grosby, Steven. 2009. “Philanthropy and Human Action.” Conversations on Philanthropy VI: 1-14. ©2009 DonorsTrust.
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Newly edited and annotated
1889 | Essay
The Scottish-born industrialist and philanthropist Andrew Carnegie (1835–1919) was one of the titans of America’s Gilded Age. He was also a prolific author, writing hundreds of speeches, articles, pamphlets, and letters to the editor, as well as seven books, including an Autobiography (published posthumously in 1920). Proud of his pen, Carnegie is today perhaps most celebrated as the author of a pair of articles first published in the North American Review in 1889, which together have come to be known as The Gospel of Wealth. Here, Carnegie boldly articulated his view of the rich as mere trustees of their wealth who should live unostentatiously, provide moderately for their families, and use their fortunes to promote the “general good.” He goes on to suggest some “best uses” to which the millionaire can devote his wealth (universities, libraries, medical institutions, public parks, and more). The Gospel of Wealth caused quite a stir on both sides of the Atlantic, not least for its now famous declaration that “The man who dies thus rich dies disgraced.”
Andrew Carnegie. The Gospel of Wealth. New York: Carnegie Corporation of New York, 2017 (first published in 1889).