WEBVTT 00:00:00.000 --> 00:00:02.060 OK, let's get into this. When you really look 00:00:02.060 --> 00:00:04.139 at the Gilded Age, I mean, the whole sweep of 00:00:04.139 --> 00:00:10.400 it, it's hard to find a figure who is more emblematic 00:00:10.400 --> 00:00:12.679 or maybe more contradictory than Andrew Carnegie. 00:00:12.839 --> 00:00:14.919 But that's absolutely right. And we have, I mean, 00:00:14.960 --> 00:00:17.359 a mountain of sources here that track his journey. 00:00:17.440 --> 00:00:19.600 A truly incredible journey. It is. It starts 00:00:19.600 --> 00:00:22.489 in this tiny... struggling weaver's cottage in 00:00:22.489 --> 00:00:26.289 Scotland and goes all the way to the creation 00:00:26.289 --> 00:00:28.910 of this global industrial behemoth. And then 00:00:28.910 --> 00:00:31.710 just as big, this colossal philanthropic machine. 00:00:32.119 --> 00:00:34.039 And that's really the mission of this deep dive. 00:00:34.179 --> 00:00:36.920 We want to explore that fundamental paradox of 00:00:36.920 --> 00:00:39.600 Andrew Carnegie. On one hand, you have the ruthless 00:00:39.600 --> 00:00:42.340 industrialist who builds one of the largest fortunes 00:00:42.340 --> 00:00:45.119 in history. And on the other, the man who dedicates 00:00:45.119 --> 00:00:46.979 the entire second half of his life to giving 00:00:46.979 --> 00:00:49.700 almost all of it away. Exactly. So we have to 00:00:49.700 --> 00:00:51.859 understand the intense focus. And let's be honest, 00:00:52.020 --> 00:00:54.140 the often violent means he used to build his 00:00:54.140 --> 00:00:56.539 steel empire. And then we have to look at the 00:00:56.539 --> 00:00:58.479 philosophy that guided how he gave it all away, 00:00:58.659 --> 00:01:01.520 his famous gospel of wealth. And crucially. You 00:01:01.520 --> 00:01:04.359 can't ignore the controversial human cost of 00:01:04.359 --> 00:01:06.799 that initial pile of money. You really can't. 00:01:06.799 --> 00:01:09.400 Our sources give us this just, well, a staggering 00:01:09.400 --> 00:01:11.099 overview right from the start. It really sets 00:01:11.099 --> 00:01:13.319 the scale of what we're talking about. So he's 00:01:13.319 --> 00:01:16.099 a Scottish -American industrialist born in 1835. 00:01:16.340 --> 00:01:19.319 Right. And he becomes the guy who dominates and 00:01:19.319 --> 00:01:21.540 leads the expansion of the American steel industry 00:01:21.540 --> 00:01:24.400 in the late 19th century. He really was the prototype 00:01:24.400 --> 00:01:26.909 for the modern industrial titan, wasn't he? He 00:01:26.909 --> 00:01:30.090 was. And the numbers. I mean, they just redefine 00:01:30.090 --> 00:01:32.329 what you and I think of as wealth. He donated 00:01:32.329 --> 00:01:35.709 something like $350 million during his lifetime. 00:01:35.969 --> 00:01:38.829 A huge number, but you almost get numb to it. 00:01:38.870 --> 00:01:41.170 It's the context that's mind blowing. It is. 00:01:41.450 --> 00:01:43.829 Researchers have calculated that $350 million 00:01:43.829 --> 00:01:47.250 back then is the equivalent of about $6 .9 billion 00:01:47.250 --> 00:01:51.569 in 2025. $6 .9 billion. Yeah. So he was giving 00:01:51.569 --> 00:01:54.370 away a sum that rivaled the GDP of small countries 00:01:54.370 --> 00:01:56.549 at the time. It's a fortune. world historical 00:01:56.549 --> 00:01:59.629 scale. Yeah. And he seemed absolutely determined 00:01:59.629 --> 00:02:02.189 to live up to that famous quote of his. The man 00:02:02.189 --> 00:02:05.170 who dies less rich dies disgraced. Exactly. He 00:02:05.170 --> 00:02:07.390 seemed genuinely terrified of facing that judgment. 00:02:07.629 --> 00:02:09.710 And if you want to understand his motivation, 00:02:09.830 --> 00:02:12.490 you have to look at the blueprint for his entire 00:02:12.490 --> 00:02:15.610 second act, which is the gospel of wealth. He 00:02:15.610 --> 00:02:18.689 published that essay in 1889, right? 1889. And 00:02:18.689 --> 00:02:21.490 it basically sets the standard for all modern 00:02:21.490 --> 00:02:24.819 philanthropy. His argument was, at its core, 00:02:25.020 --> 00:02:28.879 a moral one. The rich have this profound obligation 00:02:28.879 --> 00:02:32.560 to be stewards of their fortunes. Not just owners, 00:02:32.639 --> 00:02:35.300 but stewards. Right. Using their surplus wealth 00:02:35.300 --> 00:02:39.020 to uplift society, not to just hoard it or spend 00:02:39.020 --> 00:02:41.020 it on themselves. It's this incredible attempt 00:02:41.020 --> 00:02:43.919 to bring together immense personal wealth with 00:02:43.919 --> 00:02:46.449 a real sense of social duty. But I think to really 00:02:46.449 --> 00:02:48.490 get that, we have to look past the libraries 00:02:48.490 --> 00:02:50.330 and the concert halls for a minute and start 00:02:50.330 --> 00:02:52.530 where he started. Absolutely. Back to Dunfermline. 00:02:52.710 --> 00:02:56.270 So part one, the ascent from what was really 00:02:56.270 --> 00:02:59.229 other poverty. Our sources all stress that Carnegie's 00:02:59.229 --> 00:03:02.430 origins were just impossibly humble. He was born 00:03:02.430 --> 00:03:05.509 in Dunfermline, Scotland in 1835 into conditions 00:03:05.509 --> 00:03:08.030 that are, frankly, hard for us to even picture 00:03:08.030 --> 00:03:10.150 today. That's right. He was born in a typical 00:03:10.150 --> 00:03:12.800 Scottish weaver's cottage. And you have to understand 00:03:12.800 --> 00:03:14.819 what that meant. It was basically one main room. 00:03:14.919 --> 00:03:17.419 One room for the whole family. Not just his family. 00:03:17.680 --> 00:03:20.180 It was often partitioned to accommodate a neighboring 00:03:20.180 --> 00:03:23.180 family as well. So that one room was the living 00:03:23.180 --> 00:03:25.199 room, the dining room, the bedroom, everything. 00:03:25.479 --> 00:03:28.280 For his parents, William and Margaret, and for 00:03:28.280 --> 00:03:30.539 young Andrew. And this wasn't just a low -income 00:03:30.539 --> 00:03:33.180 situation. This was a family fighting against 00:03:33.180 --> 00:03:36.860 a massive economic shift. His father... William 00:03:36.860 --> 00:03:40.139 Carnegie was a hand loom weaver, a very skilled 00:03:40.139 --> 00:03:42.639 one by all accounts. A highly skilled artisan, 00:03:42.780 --> 00:03:45.219 yes. But the Industrial Revolution essentially 00:03:45.219 --> 00:03:48.599 made his entire profession obsolete. The mechanized 00:03:48.599 --> 00:03:51.460 power loom came in and just crushed the hand 00:03:51.460 --> 00:03:53.599 loom trade. So his father's skills were suddenly 00:03:53.599 --> 00:03:56.280 worthless. Practically worthless. And William 00:03:56.280 --> 00:03:58.259 Carnegie, who was known for his strong chartist 00:03:58.259 --> 00:04:01.240 politics, his democratic ideals, found himself 00:04:01.240 --> 00:04:04.080 economically powerless. The family was facing 00:04:04.080 --> 00:04:06.770 real grinding hardship. At times, they were on 00:04:06.770 --> 00:04:08.830 the verge of starvation. And that's where his 00:04:08.830 --> 00:04:11.129 mother, Margaret Morrison Carnegie, really steps 00:04:11.129 --> 00:04:13.650 in. She becomes the absolute anchor for the family. 00:04:13.729 --> 00:04:16.129 You can see her resourcefulness, that entrepreneurial 00:04:16.129 --> 00:04:19.670 drive in everything Andrew did later. Oh, absolutely. 00:04:20.360 --> 00:04:22.699 She became the primary breadwinner. She started 00:04:22.699 --> 00:04:24.860 selling potted meats out of a little sweetie 00:04:24.860 --> 00:04:28.079 shop, just working tirelessly to keep them afloat. 00:04:28.180 --> 00:04:31.560 She was this incredibly strong, resilient, matriarchal 00:04:31.560 --> 00:04:33.379 figure. Carnegie talked about her constantly 00:04:33.379 --> 00:04:36.180 later in life, didn't he? He did. He always highlighted 00:04:36.180 --> 00:04:39.540 her sheer determination, her grit as the defining 00:04:39.540 --> 00:04:42.560 quality he inherited. But his world wasn't only 00:04:42.560 --> 00:04:45.519 shaped by poverty. There was also this spark 00:04:45.519 --> 00:04:48.839 of intellectual curiosity. His maternal uncle, 00:04:49.019 --> 00:04:51.079 George Lauder Sr., seems to have played a huge 00:04:51.079 --> 00:04:53.699 role in that. A massive role. Lauder was the 00:04:53.699 --> 00:04:56.879 storyteller, the revolutionary influence in his 00:04:56.879 --> 00:04:59.579 life. He's the one who introduced Andrew to these 00:04:59.579 --> 00:05:01.959 heroic stories from Scottish history people like 00:05:01.959 --> 00:05:04.240 Robert the Bruce and William Wallace. And maybe 00:05:04.240 --> 00:05:06.920 most importantly, to poetry. Yes, to the poetry 00:05:06.920 --> 00:05:09.699 of Robert Burns. This early exposure to literature 00:05:09.699 --> 00:05:12.040 and history and also to this kind of radical, 00:05:12.240 --> 00:05:14.939 democratic thinking from his uncle, that's what 00:05:14.939 --> 00:05:17.160 lit the fire. It's what convinced Carnegie. that 00:05:17.160 --> 00:05:19.480 education, not what you inherit, was the real 00:05:19.480 --> 00:05:21.720 key to getting ahead. That Scottish background 00:05:21.720 --> 00:05:24.199 really defined him, but the opportunities were 00:05:24.199 --> 00:05:28.000 all across the Atlantic. So in 1848, Andrew is 00:05:28.000 --> 00:05:31.180 12, and the family borrows money, a lot of money 00:05:31.180 --> 00:05:33.600 for them, and they immigrate to Allegheny, Pennsylvania. 00:05:34.019 --> 00:05:36.600 And the American dream hits them immediately 00:05:36.600 --> 00:05:40.819 and, well, brutally. His first job in Pittsburgh 00:05:40.819 --> 00:05:42.860 isn't a cotton mill. The workers called it the 00:05:42.860 --> 00:05:45.959 black hole of Calcutta. They did. He was a bobbin 00:05:45.959 --> 00:05:48.699 boy, working 12 hours a day, six days a week. 00:05:48.899 --> 00:05:52.199 And for all that, he was making $1 .20 a week. 00:05:52.620 --> 00:05:55.199 That's barely survival. It's not even survival, 00:05:55.459 --> 00:05:57.860 really. The strain on a 12 -year -old, both physically 00:05:57.860 --> 00:06:00.160 and psychologically, is just, as you said, almost 00:06:00.160 --> 00:06:02.360 unimaginable. He moves on pretty quickly to a 00:06:02.360 --> 00:06:04.339 bobbin factory for a slightly better wage, $2 00:06:04.339 --> 00:06:07.360 a week. But our sources point to this one anecdote 00:06:07.360 --> 00:06:09.779 from his autobiography that just captures the 00:06:09.779 --> 00:06:12.459 terror of that early industrial world. The steam 00:06:12.459 --> 00:06:15.019 engine nightmare. Yeah, tell us about that. So 00:06:15.019 --> 00:06:17.160 his job there included running a small steam 00:06:17.160 --> 00:06:19.379 engine and firing the boiler down the cellar 00:06:19.379 --> 00:06:21.879 of the factory. And he talks about this paralyzing 00:06:21.879 --> 00:06:24.870 fear he felt all the time. him up at night he 00:06:24.870 --> 00:06:27.029 wrote that he'd sit up in bed fearing at one 00:06:27.029 --> 00:06:29.329 time that the steam was too low and that he'd 00:06:29.329 --> 00:06:31.470 get fired and at another time that the steam 00:06:31.470 --> 00:06:33.709 was too high and that the boiler might burst 00:06:33.709 --> 00:06:36.370 and kill us all that experience that sense of 00:06:36.370 --> 00:06:39.610 the immense unforgiving power of machinery combined 00:06:39.610 --> 00:06:42.389 with the crushing responsibility for his family 00:06:42.389 --> 00:06:46.139 that had to have shaped him oh deeply It gave 00:06:46.139 --> 00:06:48.420 him this incredible drive, but also you can see 00:06:48.420 --> 00:06:50.939 this lifelong desire to control his environment, 00:06:51.160 --> 00:06:53.480 whether it was a steam engine in a cellar or 00:06:53.480 --> 00:06:56.060 later on the entire American steel market. But 00:06:56.060 --> 00:06:58.100 the real pivot, the thing that changed everything, 00:06:58.220 --> 00:07:02.000 came in 1849. He makes the jump from manual labor 00:07:02.000 --> 00:07:04.899 to the absolute cutting edge of communication 00:07:04.899 --> 00:07:07.589 technology at the time. He becomes a telegraph 00:07:07.589 --> 00:07:09.709 messenger boy for the Ohio Telegraph Company. 00:07:09.850 --> 00:07:11.810 Which was a transformative move. Absolutely. 00:07:11.949 --> 00:07:15.110 He's making $250 a week, but the real value wasn't 00:07:15.110 --> 00:07:16.810 the money. It was the access to information. 00:07:16.850 --> 00:07:19.230 He was suddenly at the very center of business 00:07:19.230 --> 00:07:21.610 communication in Pittsburgh. And he mastered 00:07:21.610 --> 00:07:24.170 the job, not just by memorizing where all the 00:07:24.170 --> 00:07:26.949 businesses were, but with his incredible technical 00:07:26.949 --> 00:07:30.319 skill. Right, the ability to read the telegraph 00:07:30.319 --> 00:07:34.060 signals by sound. By ear. Exactly. Most operators 00:07:34.060 --> 00:07:36.180 at the time, they were still relying on the paper 00:07:36.180 --> 00:07:38.699 slip that printed out the dots and dashes. But 00:07:38.699 --> 00:07:41.579 Carnegie developed this high -level skill of 00:07:41.579 --> 00:07:44.600 translating the Morse code by ear alone. So he 00:07:44.600 --> 00:07:47.420 was faster. Much faster. He could interpret messages 00:07:47.420 --> 00:07:50.439 quicker than almost anyone else. It's really 00:07:50.439 --> 00:07:53.480 the first clear sign of this extraordinary mental 00:07:53.480 --> 00:07:56.300 acuity he had. And that skill gets him noticed. 00:07:56.480 --> 00:07:58.560 It brings him in. into this orbit of opportunity. 00:07:59.540 --> 00:08:02.339 And it's right here, in this period, that we 00:08:02.339 --> 00:08:05.040 find the seed of his entire philanthropic future. 00:08:05.220 --> 00:08:07.600 This is Colonel James Anderson, an incredibly 00:08:07.600 --> 00:08:10.220 generous local man who opened his personal library 00:08:10.220 --> 00:08:12.959 about 400 books to working boys every Saturday 00:08:12.959 --> 00:08:15.680 night. And for a poor kid like Andrew, who'd 00:08:15.680 --> 00:08:18.180 only had access to his uncle's few books, this 00:08:18.180 --> 00:08:20.379 must have felt like freedom. It was intellectual 00:08:20.379 --> 00:08:23.000 emancipation. He later called it the most significant 00:08:23.000 --> 00:08:25.759 event of his youth. And our sources detail this 00:08:25.759 --> 00:08:28.139 promise he made to himself at the time. It was 00:08:28.139 --> 00:08:30.139 a vow that really became the guiding principle 00:08:30.139 --> 00:08:32.159 for all of his giving later on. What was the 00:08:32.159 --> 00:08:34.659 promise? He resolved that if he ever got wealthy, 00:08:34.779 --> 00:08:36.960 he would make sure that other poor boys might 00:08:36.960 --> 00:08:39.580 receive opportunities similar to those for which 00:08:39.580 --> 00:08:43.039 we were indebted. It's that direct personal gratitude 00:08:43.039 --> 00:08:45.919 for the power of self -education that is the 00:08:45.919 --> 00:08:48.620 true origin of the 3 ,000 libraries he would 00:08:48.620 --> 00:08:51.759 eventually build. That access to knowledge shaped 00:08:51.759 --> 00:08:54.720 him. And his ability with the telegraph propelled 00:08:54.720 --> 00:08:56.899 him into the most powerful industry of the era, 00:08:57.059 --> 00:09:01.039 the railroads. In 1853, when he's 18, Thomas 00:09:01.039 --> 00:09:03.039 A. Scott, a major figure at the Pennsylvania 00:09:03.039 --> 00:09:06.100 Railroad, hires Carnegie as his personal secretary 00:09:06.100 --> 00:09:08.980 and telegraph operator. A critical leap. A critical 00:09:08.980 --> 00:09:11.840 leap. The pay was only $4 a week to start, but 00:09:11.840 --> 00:09:14.299 the career path was, well, it was vertical. By 00:09:14.299 --> 00:09:17.259 the time he was 24 in 1859, he was the superintendent 00:09:17.259 --> 00:09:20.100 of the Western Division. Earning $1 ,500 a year. 00:09:20.639 --> 00:09:23.879 A massive sum for the time. A fortune. And he's 00:09:23.879 --> 00:09:26.740 learning efficiency, management, cost control 00:09:26.740 --> 00:09:29.120 from the absolute titans of American business, 00:09:29.159 --> 00:09:31.039 Scott, and the president of the railroad, John 00:09:31.039 --> 00:09:33.139 Edgar Thompson. But he was also learning about 00:09:33.139 --> 00:09:35.799 the, let's say, the darker side of Gilded Age 00:09:35.799 --> 00:09:38.519 capitalism, the mechanics of inside investing. 00:09:38.779 --> 00:09:41.399 The sources are very clear on this. The foundation 00:09:41.399 --> 00:09:43.720 of his personal capital was built on insider 00:09:43.720 --> 00:09:46.460 knowledge and, frankly, political corruption. 00:09:47.319 --> 00:09:49.860 Scott is the one who facilitates Carnegie's first 00:09:49.860 --> 00:09:53.940 major investment in 1855. $500 in the Adams Express 00:09:53.940 --> 00:09:56.940 Company. Right. $500, which his mother had to 00:09:56.940 --> 00:09:59.720 secure by taking a mortgage out on their $700 00:09:59.720 --> 00:10:02.440 home. An unbelievable gamble. Yeah. But it wasn't 00:10:02.440 --> 00:10:04.500 just a gamble, was it? It was a gamble with a 00:10:04.500 --> 00:10:07.600 stacked deck. Exactly. Because Carnegie was a 00:10:07.600 --> 00:10:10.299 trusted employee, he was privy to proprietary 00:10:10.299 --> 00:10:13.740 information. He knew where new rail lines were 00:10:13.740 --> 00:10:16.179 planned, which routes were about to get profitable, 00:10:16.379 --> 00:10:19.460 which services the railroad was about to contract 00:10:19.460 --> 00:10:22.840 out. The sources describe it as endemic corruption 00:10:22.840 --> 00:10:25.659 indulged in by Scott and the president, which 00:10:25.659 --> 00:10:27.919 consisted of inside trading. That's the quote. 00:10:28.039 --> 00:10:30.100 He wasn't just investing in random companies. 00:10:30.259 --> 00:10:32.360 He was investing in the businesses that service 00:10:32.360 --> 00:10:35.120 the railroad, sleeping cars, iron bridges. Later 00:10:35.120 --> 00:10:38.100 on, Oil knowing with near certainty that his 00:10:38.100 --> 00:10:40.799 main customer, the Pennsylvania Railroad, was 00:10:40.799 --> 00:10:43.279 about to make them rich. And he used his position 00:10:43.279 --> 00:10:46.210 to make sure that happened. Absolutely. He systematically 00:10:46.210 --> 00:10:50.049 reinvested every penny of profit. He leveraged 00:10:50.049 --> 00:10:52.389 his position, sometimes with direct payoffs, 00:10:52.490 --> 00:10:54.990 to make sure his ventures, like the Woodruff 00:10:54.990 --> 00:10:57.789 Sleeping Car Company, got those lucrative contracts. 00:10:58.210 --> 00:10:59.870 So the capital that allowed him to build the 00:10:59.870 --> 00:11:02.049 steel empire, it all came from this privileged 00:11:02.049 --> 00:11:05.190 inside position. That was the absolute financial 00:11:05.190 --> 00:11:07.649 foundation. It's fascinating, isn't it? The money 00:11:07.649 --> 00:11:09.730 that funded the greatest philanthropist in history 00:11:09.730 --> 00:11:12.230 was built on practices that were completely at 00:11:12.230 --> 00:11:14.700 odds with the meritocratic idea. deals he later 00:11:14.700 --> 00:11:17.700 breached. A perfect demonstration of how industry, 00:11:17.980 --> 00:11:21.580 finance, and politics were just completely entangled 00:11:21.580 --> 00:11:24.039 in that era. Impossible to separate. So that 00:11:24.039 --> 00:11:26.379 initial capital was the springboard. And now 00:11:26.379 --> 00:11:28.919 we get to part two, where he turns those early 00:11:28.919 --> 00:11:32.320 investments into the steel leviathan. And the 00:11:32.320 --> 00:11:34.440 Civil War seems to have been the critical moment 00:11:34.440 --> 00:11:37.820 of realization for him. It was decisive. In 1861, 00:11:38.000 --> 00:11:40.039 he's serving as the superintendent of the military 00:11:40.039 --> 00:11:42.100 railways and the Union telegraph lines in the 00:11:42.100 --> 00:11:44.970 East. His old boss, Scott, is now assistant secretary 00:11:44.970 --> 00:11:47.610 of war. So he has a front row seat to the war 00:11:47.610 --> 00:11:50.570 effort. The best seat in the house. And the war 00:11:50.570 --> 00:11:52.830 just demonstrates, in the most brutal way possible, 00:11:52.970 --> 00:11:55.470 how dependent modern warfare and the success 00:11:55.470 --> 00:11:57.889 of the nation was on reliable infrastructure 00:11:57.889 --> 00:12:00.649 and massive industrial production. That must 00:12:00.649 --> 00:12:02.649 have been a moment of incredible clarity for 00:12:02.649 --> 00:12:05.190 him, seeing that the real power wasn't in managing 00:12:05.190 --> 00:12:07.909 the trains, but in making the very tracks and 00:12:07.909 --> 00:12:10.960 bridges they ran on. Precisely. After the war, 00:12:11.120 --> 00:12:13.919 he shifts his focus completely. He leaves the 00:12:13.919 --> 00:12:16.419 railroads and goes all in on the ironworks trade. 00:12:16.580 --> 00:12:18.940 He forms the Keystone Bridgeworks and the Union 00:12:18.940 --> 00:12:21.240 Ironworks. And he uses his old network to get 00:12:21.240 --> 00:12:24.190 a leg up. He does. He uses his deep connections 00:12:24.190 --> 00:12:26.789 with Scott and Thompson to make sure the Pennsylvania 00:12:26.789 --> 00:12:29.570 Railroad becomes his best and most reliable customer. 00:12:29.889 --> 00:12:32.169 And in return for those guaranteed contracts, 00:12:32.490 --> 00:12:35.190 he gives both men stock in his new companies. 00:12:35.450 --> 00:12:37.809 So the system of inside dealing that built his 00:12:37.809 --> 00:12:39.970 first fortune just gets scaled up when he moves 00:12:39.970 --> 00:12:42.190 into manufacturing. Exactly. He was basically 00:12:42.190 --> 00:12:44.169 securing a guaranteed market for his products. 00:12:44.309 --> 00:12:46.649 And that leads us to the two great innovations 00:12:46.649 --> 00:12:48.590 that let him completely dominate the industry. 00:12:48.809 --> 00:12:51.840 The first was the strategic use of steel for 00:12:51.840 --> 00:12:54.440 big infrastructure projects. Right. The Keystone 00:12:54.440 --> 00:12:56.559 Bridge works. That was the proof that steel could 00:12:56.559 --> 00:12:58.740 be used on a massive scale. And the landmark 00:12:58.740 --> 00:13:02.000 project here was the Eads Bridge across the Mississippi 00:13:02.000 --> 00:13:05.799 River. It was completed in 1874. Keystone supplied 00:13:05.799 --> 00:13:08.259 the steel for this incredible feat of engineering. 00:13:08.580 --> 00:13:10.559 And before that, people were skeptical about 00:13:10.559 --> 00:13:12.960 using steel for something so big. Very skeptical. 00:13:13.100 --> 00:13:16.279 The Eads Bridge, by surviving the immense pressures 00:13:16.279 --> 00:13:19.220 of the Mississippi, proved that steel was viable. 00:13:19.419 --> 00:13:23.409 It opened up this colossal new market for steel 00:13:23.409 --> 00:13:26.370 way beyond just railroad tracks. But the truly 00:13:26.370 --> 00:13:29.309 revolutionary piece, the thing that let him accelerate 00:13:29.309 --> 00:13:31.590 production and just make money at an impossible 00:13:31.590 --> 00:13:34.190 rate, was his adoption of the Bessemer process. 00:13:34.690 --> 00:13:37.590 Yes. Carnegie didn't invent it, but he was the 00:13:37.590 --> 00:13:40.169 master industrialist who saw its potential for 00:13:40.169 --> 00:13:42.629 scale and profit. So what was the Bessemer process 00:13:42.629 --> 00:13:45.289 exactly? In simple terms, it involved blowing 00:13:45.289 --> 00:13:48.169 air through molten pig iron. This quickly burned 00:13:48.169 --> 00:13:49.990 off the impurities, and you can... could produce 00:13:49.990 --> 00:13:52.470 high quality steel in minutes instead of weeks. 00:13:52.629 --> 00:13:54.990 It completely changed the economics of manufacturing. 00:13:55.370 --> 00:13:57.389 And what did that do to the market? It caused 00:13:57.389 --> 00:14:00.830 the price of steel to just plummet. Before Bessemer, 00:14:00.950 --> 00:14:04.889 steel was this expensive specialty product. Afterwards, 00:14:05.009 --> 00:14:06.970 it became cheap enough to replace iron everywhere, 00:14:07.250 --> 00:14:09.870 first in rails and then later in buildings and 00:14:09.870 --> 00:14:12.169 bridges. And Carney, you went. Holland. Holland. 00:14:12.470 --> 00:14:15.029 He built the massive Edgar Thompson steelworks 00:14:15.029 --> 00:14:17.929 specifically around this technology. And suddenly 00:14:17.929 --> 00:14:20.269 he could produce steel rails faster and cheaper 00:14:20.269 --> 00:14:22.970 than anyone else in the world. He scaled up so 00:14:22.970 --> 00:14:26.090 aggressively that by 1889, U .S. steel output 00:14:26.090 --> 00:14:28.549 was bigger than the U .K.'s, which had been the 00:14:28.549 --> 00:14:30.730 global leader. And Carnegie owned a huge piece 00:14:30.730 --> 00:14:33.370 of that. A huge piece. That whole geopolitical 00:14:33.370 --> 00:14:36.190 shift, America overtaking Britain in heavy industry, 00:14:36.350 --> 00:14:39.450 is tied directly to Carnegie's willingness to 00:14:39.450 --> 00:14:43.139 bet on new. mass production technology. But technology 00:14:43.139 --> 00:14:45.460 wasn't the only thing. His second big innovation 00:14:45.460 --> 00:14:49.000 was purely strategic, vertical integration. This 00:14:49.000 --> 00:14:51.360 was the real strategic genius. Vertical integration 00:14:51.360 --> 00:14:53.860 just means you control every single stage of 00:14:53.860 --> 00:14:56.379 production, from the raw material all the way 00:14:56.379 --> 00:14:58.259 to the finished product. So he starts buying 00:14:58.259 --> 00:15:01.029 up the supply chain. Systematically. He bought 00:15:01.029 --> 00:15:03.990 coal fields. He bought iron ore deposits up in 00:15:03.990 --> 00:15:06.370 the Lake Superior region. He even bought his 00:15:06.370 --> 00:15:08.889 own fleet of steamships to move the ore and a 00:15:08.889 --> 00:15:12.889 425 mile railway to get it to his mills. So he's 00:15:12.889 --> 00:15:14.669 not at the mercy of the market anymore. If coal 00:15:14.669 --> 00:15:16.370 prices go up, that doesn't really affect him 00:15:16.370 --> 00:15:18.909 because he owns the mines. Exactly. He controlled 00:15:18.909 --> 00:15:22.509 his costs. He guaranteed his supply. And he achieved 00:15:22.509 --> 00:15:25.889 this incredible level of efficiency. By 1892, 00:15:26.169 --> 00:15:29.059 he consolidated all these holdings. Harnesses, 00:15:29.059 --> 00:15:31.620 the Coke Company, everything, into the giant 00:15:31.620 --> 00:15:34.580 Carnegie Steel Company. And this control gave 00:15:34.580 --> 00:15:37.600 him the power to ruthlessly undercut any competitor 00:15:37.600 --> 00:15:39.639 who was still buying their materials on the open 00:15:39.639 --> 00:15:41.700 market. It's like an industrial closed loop. 00:15:41.820 --> 00:15:43.980 He can just focus on output and sales because 00:15:43.980 --> 00:15:46.620 his inputs are secure. It is. But this period 00:15:46.620 --> 00:15:49.259 of dominance wasn't just about efficiency. No. 00:15:49.360 --> 00:15:51.679 The sources are clear that his success also relied 00:15:51.679 --> 00:15:54.669 on, let's say, less savory practices. That's 00:15:54.669 --> 00:15:56.409 a good way to put it. He worked closely with 00:15:56.409 --> 00:15:58.529 his old railroad friends to negotiate preferential 00:15:58.529 --> 00:16:00.549 prices to control distribution and basically 00:16:00.549 --> 00:16:03.210 to minimize any real free market competition. 00:16:03.509 --> 00:16:06.509 And the best example of this is his reliance 00:16:06.509 --> 00:16:09.210 on the government. We think of Carnegie as the 00:16:09.210 --> 00:16:11.970 ultimate laissez -faire capitalist, but the record 00:16:11.970 --> 00:16:14.850 shows he was a huge advocate for government intervention 00:16:14.850 --> 00:16:17.600 as long as it was on his behalf. Absolutely. 00:16:17.740 --> 00:16:19.980 We have to talk about the tariffs. A protective 00:16:19.980 --> 00:16:22.840 tariff is just a tax on imported goods. It makes 00:16:22.840 --> 00:16:25.220 foreign products more expensive. So it protects 00:16:25.220 --> 00:16:27.940 domestic industry from competition. Precisely. 00:16:27.940 --> 00:16:30.659 And Carnegie spent a fortune lobbying Congress 00:16:30.659 --> 00:16:33.720 for high tariffs on foreign steel. This shielded 00:16:33.720 --> 00:16:36.139 his American factories from cheaper and sometimes 00:16:36.139 --> 00:16:39.860 even higher quality European steel. So he's preaching 00:16:39.860 --> 00:16:43.289 survival of the fittest in public. while quietly 00:16:43.289 --> 00:16:45.710 getting the government to build a financial fence 00:16:45.710 --> 00:16:47.950 around his business. It's the ultimate contradiction. 00:16:48.429 --> 00:16:51.149 These tariffs earn his company millions of dollars 00:16:51.149 --> 00:16:53.169 a year, essentially guaranteed by the government. 00:16:53.370 --> 00:16:55.309 And he tried to keep the details of this law 00:16:55.309 --> 00:16:57.529 being quiet, but it all came out later during 00:16:57.529 --> 00:16:59.669 legal proceedings with his former partner, Henry 00:16:59.669 --> 00:17:02.190 Clay Frick. So he was a champion of government 00:17:02.190 --> 00:17:04.809 non -interference when it came to, say, labor 00:17:04.809 --> 00:17:07.049 laws. But when it came to trade protection that 00:17:07.049 --> 00:17:09.549 put money in his pocket, he was all for it. A 00:17:09.549 --> 00:17:13.220 perfect picture of Gilded Age power. You preach 00:17:13.220 --> 00:17:16.400 pure competition, but you rig the game to make 00:17:16.400 --> 00:17:18.740 sure you win. And that dominance leads directly 00:17:18.740 --> 00:17:22.440 to the great sell -off. By 1901, Carnegie is 00:17:22.440 --> 00:17:25.519 65. He's ready to move on to become a full -time 00:17:25.519 --> 00:17:28.380 philanthropist. But he can't just sell off the 00:17:28.380 --> 00:17:30.339 company piece by piece. No, it's too big, too 00:17:30.339 --> 00:17:33.119 integrated. He has to prepare it for one single 00:17:33.119 --> 00:17:37.039 massive sale. And the buyer is the only man powerful 00:17:37.039 --> 00:17:40.289 enough to pull it off. JP Morgan. Right. And 00:17:40.289 --> 00:17:42.650 Morgan's vision was to rationalize the entire 00:17:42.650 --> 00:17:45.089 steel industry. He wanted to cut costs, increase 00:17:45.089 --> 00:17:47.410 efficiency and eliminate all the wasteful competition. 00:17:47.650 --> 00:17:49.970 But to do that, he had to own the biggest piece 00:17:49.970 --> 00:17:52.509 on the board, which was Carnegie Steel. The deal 00:17:52.509 --> 00:17:55.069 they made is the stuff of legend. Carnegie sells 00:17:55.069 --> 00:17:57.819 the entire company to Morgan for. What was it, 00:17:57.819 --> 00:18:03.079 just over $300 million? $3 ,450 ,000 to be exact. 00:18:03.299 --> 00:18:06.359 And that purchase becomes the foundation of the 00:18:06.359 --> 00:18:09.220 colossal U .S. Steel Corporation. Which was the 00:18:09.220 --> 00:18:11.059 first billion -dollar corporation in the world. 00:18:11.240 --> 00:18:15.839 The first. Its market cap was $1 .4 billion at 00:18:15.839 --> 00:18:18.640 the time. To give you some context, that one 00:18:18.640 --> 00:18:21.660 company represented about 4 % of the entire U 00:18:21.660 --> 00:18:24.859 .S. GDP. It was like a state unto itself. And 00:18:24.859 --> 00:18:27.519 Carnegie's personal share of that sale was $225 00:18:27.519 --> 00:18:31.019 .64 million. But what's so interesting is how 00:18:31.019 --> 00:18:34.079 he got paid. Yes, not in cash. It would have 00:18:34.079 --> 00:18:36.099 been impossible to move that much. He was paid 00:18:36.099 --> 00:18:39.700 in 5 % 50 -year gold bonds. Which was a stroke 00:18:39.700 --> 00:18:42.509 of genius financially. It was. It guaranteed 00:18:42.509 --> 00:18:45.130 him this massive, stable income stream for the 00:18:45.130 --> 00:18:48.009 rest of his life and beyond. The gold bonds meant 00:18:48.009 --> 00:18:51.150 a fixed 5 % return every year, payable in gold, 00:18:51.289 --> 00:18:53.789 for half a century. It gave him the predictable 00:18:53.789 --> 00:18:55.990 cash flow he needed to fund his foundations without 00:18:55.990 --> 00:18:58.029 ever worrying about the stock market. This was 00:18:58.029 --> 00:19:00.269 the fuel for the philanthropic machine. Exactly. 00:19:00.309 --> 00:19:02.470 And there's that great detail from the sources 00:19:02.470 --> 00:19:04.470 about the sheer physical size of the fortune. 00:19:04.670 --> 00:19:07.190 They had to build a special vault at a bank in 00:19:07.190 --> 00:19:09.630 Hoboken, New Jersey, just to hold the paper bonds. 00:19:10.640 --> 00:19:12.980 needing a custom bank vault just for the paperwork 00:19:12.980 --> 00:19:15.359 for your net worth. It really puts it in perspective. 00:19:15.579 --> 00:19:18.079 So once that money was secure, Carnaby completely 00:19:18.079 --> 00:19:21.519 switches gears. He dedicates the next 18 years 00:19:21.519 --> 00:19:23.920 of his life to fulfilling that promise he made 00:19:23.920 --> 00:19:26.119 to himself as a boy. Which takes us back to that 00:19:26.119 --> 00:19:29.920 famous memo he wrote to himself in 1868. He was 00:19:29.920 --> 00:19:32.660 only 33 at the time. It's an incredible document 00:19:32.660 --> 00:19:35.339 because it lays out his entire life plan. It 00:19:35.339 --> 00:19:37.819 is. In the memo, he stops and reflects on what 00:19:37.819 --> 00:19:39.599 he's doing, and he calls the pursuit of wealth 00:19:39.599 --> 00:19:42.680 one of the worst species of idolatry. He actually 00:19:42.680 --> 00:19:48.839 wrote, And he plans to retire at 35. Right. to 00:19:48.839 --> 00:19:50.799 start making money and to devote his surplus 00:19:50.799 --> 00:19:53.619 to benevolent purposes. He missed the age 35 00:19:53.619 --> 00:19:56.259 deadline by a bit, but the intention was there, 00:19:56.359 --> 00:19:58.500 and it led to what people call the Andrew Carnegie 00:19:58.500 --> 00:20:00.680 Detectum. The three -thirds of life. Exactly. 00:20:00.680 --> 00:20:03.059 The first third for education, the next third 00:20:03.059 --> 00:20:05.359 for making money, and the final third for giving 00:20:05.359 --> 00:20:07.980 it all away to worthwhile causes. The accumulation 00:20:07.980 --> 00:20:10.920 phase was just a temporary, necessary step toward 00:20:10.920 --> 00:20:13.259 the real goal of distribution. And he lays all 00:20:13.259 --> 00:20:16.299 this out formally in his 1889 essay, The Gospel 00:20:16.299 --> 00:20:18.329 of Wealth. What was the core argument he was 00:20:18.329 --> 00:20:20.950 making there? He argued that modern capitalism 00:20:20.950 --> 00:20:24.029 inevitably leads to wealth concentration because 00:20:24.029 --> 00:20:27.049 the most efficient people rise to the cop. Therefore, 00:20:27.349 --> 00:20:30.130 the wealthy have a moral responsibility to act 00:20:30.130 --> 00:20:32.470 as stewards of that money. And he was very specific 00:20:32.470 --> 00:20:34.869 about what they shouldn't do with it? Very. He 00:20:34.869 --> 00:20:37.839 condemned three things. Spending it on luxury, 00:20:38.099 --> 00:20:40.119 leaving it to your heirs, who he thought would 00:20:40.119 --> 00:20:42.380 be ruined by it, and just leaving it to charity 00:20:42.380 --> 00:20:44.900 and your will after you die. He felt that lacked 00:20:44.900 --> 00:20:48.079 the personal, intelligent touch of a living benefactor. 00:20:48.259 --> 00:20:51.299 He saw active strategic philanthropy during one's 00:20:51.299 --> 00:20:54.460 lifetime as the only worthwhile path. building 00:20:54.460 --> 00:20:56.700 institutions that help people help themselves. 00:20:56.980 --> 00:20:58.960 It's a compelling argument, and it provides a 00:20:58.960 --> 00:21:01.359 moral justification for the entire system of 00:21:01.359 --> 00:21:03.779 Gilded Age inequality. The ruthless accumulation 00:21:03.779 --> 00:21:07.079 is okay because it's a prerequisite for the enlightened 00:21:07.079 --> 00:21:09.299 distribution that comes later. And his philosophy 00:21:09.299 --> 00:21:11.839 wasn't just personal. It had real policy implications. 00:21:12.339 --> 00:21:15.019 He was one of the first big industrialists to 00:21:15.019 --> 00:21:17.819 argue for progressive taxation. A crucial point. 00:21:18.509 --> 00:21:22.049 Carnegie supported heavy estate taxes. He said 00:21:22.049 --> 00:21:25.109 that by taxing large estates at death, the state 00:21:25.109 --> 00:21:28.150 marks its condemnation of the selfish millionaire's 00:21:28.150 --> 00:21:31.349 unworthy life. He wanted to force the rich to 00:21:31.349 --> 00:21:33.369 give their money away while they were still alive. 00:21:33.650 --> 00:21:35.890 So he was actually pretty radical in his acceptance 00:21:35.890 --> 00:21:38.150 of high taxes on the wealthy, as long as it was 00:21:38.150 --> 00:21:40.829 a tool to encourage benevolence. Exactly. Which 00:21:40.829 --> 00:21:43.450 brings us to part four, the philanthropic machine 00:21:43.450 --> 00:21:47.440 in action. The sheer volume of his giving is 00:21:47.440 --> 00:21:49.859 almost hard to process. And the library obsession 00:21:49.859 --> 00:21:52.359 was his signature achievement. It came directly 00:21:52.359 --> 00:21:54.500 from that experience with Colonel Anderson's 00:21:54.500 --> 00:21:56.500 little library. And he was also inspired by the 00:21:56.500 --> 00:21:59.160 Enoch Pratt Free Library in Baltimore. He called 00:21:59.160 --> 00:22:01.900 Pratt his guide and inspiration. Right. And he 00:22:01.900 --> 00:22:04.240 ends up funding something like 3 ,000 libraries 00:22:04.240 --> 00:22:07.539 globally across 47 U .S. states, Canada, the 00:22:07.539 --> 00:22:10.160 U .K., New Zealand, all over the place. But he 00:22:10.160 --> 00:22:12.259 didn't just hand over the cash. He had a very 00:22:12.259 --> 00:22:16.259 specific method. The Carnegie formula. Yes. He 00:22:16.259 --> 00:22:18.799 was focused on making sure these libraries would 00:22:18.799 --> 00:22:22.039 last. He wasn't interested in just charity. This 00:22:22.039 --> 00:22:24.740 was systematic investment. So he would provide 00:22:24.740 --> 00:22:26.960 the money for the building and the books, but 00:22:26.960 --> 00:22:29.900 only if the local town met two conditions. First, 00:22:29.980 --> 00:22:32.180 they had to provide the land for free. And second, 00:22:32.359 --> 00:22:35.720 they had to commit, through local taxes, to providing 00:22:35.720 --> 00:22:37.960 an annual budget for the library's operation 00:22:37.960 --> 00:22:40.700 and maintenance forever, usually about 10 % of 00:22:40.700 --> 00:22:42.359 the building's cost. So it was a partnership. 00:22:42.809 --> 00:22:45.069 It ensured local buy in and sustainability. It 00:22:45.069 --> 00:22:47.490 was bureaucratic brilliance, really. He started 00:22:47.490 --> 00:22:49.569 early, giving half a million to Pittsburgh in 00:22:49.569 --> 00:22:52.730 1885 and sending money back to his hometown of 00:22:52.730 --> 00:22:55.609 Dunfermline even earlier. But this noble project 00:22:55.609 --> 00:22:58.049 immediately ran into the contradictions of his 00:22:58.049 --> 00:23:00.549 own business practices, didn't it? Our sources 00:23:00.549 --> 00:23:02.809 point to a lot of criticism about the libraries 00:23:02.809 --> 00:23:05.930 he built in his own mill towns. Absolutely. The 00:23:05.930 --> 00:23:08.529 historian Richard White notes that many of Carnegie 00:23:08.529 --> 00:23:11.250 steelworkers actually despise the library he 00:23:11.250 --> 00:23:15.039 built for them in home. Why? Why would you resent 00:23:15.039 --> 00:23:31.779 a beautiful, free library? So the gift felt like 00:23:31.779 --> 00:23:36.259 an empty gesture. The mill officers often dominated 00:23:36.259 --> 00:23:38.460 the library's board and controlled what books 00:23:38.460 --> 00:23:40.779 were bought, so it felt less like a public good 00:23:40.779 --> 00:23:43.000 and more like an instrument of corporate control, 00:23:43.220 --> 00:23:46.559 a symbol of paternalism. That is a profound disconnect. 00:23:46.759 --> 00:23:49.480 The grand gift can't erase the daily reality 00:23:49.480 --> 00:23:51.819 created by the business model that funded it. 00:23:51.940 --> 00:23:54.099 Right. And the libraries, while they're the most 00:23:54.099 --> 00:23:57.220 famous part, were just one piece of it. He poured 00:23:57.220 --> 00:24:00.359 huge sums into education, science, the arts, 00:24:00.440 --> 00:24:02.819 all with this idea of enlightenment as the cure 00:24:02.819 --> 00:24:04.920 for society's problems. Let's talk about education. 00:24:05.319 --> 00:24:08.500 In 1900, he gives $2 million to start the Carnegie 00:24:08.500 --> 00:24:11.440 Institute of Technology, or CIT. Which is now, 00:24:11.460 --> 00:24:13.259 of course, the world -renowned Carnegie Mellon 00:24:13.259 --> 00:24:15.420 University. And he also served on the boards 00:24:15.420 --> 00:24:17.900 of places like Cornell. He believed in giving 00:24:17.900 --> 00:24:19.900 these institutions massive endowments that could 00:24:19.900 --> 00:24:22.339 fundamentally change their trajectory. And he 00:24:22.339 --> 00:24:26.380 also funded pure blue sky research. The Carnegie 00:24:26.380 --> 00:24:29.279 Institution in Washington, D .C. Yes, founded 00:24:29.279 --> 00:24:32.400 in 1902. He wasn't just funding things with an 00:24:32.400 --> 00:24:35.039 immediate practical return. He was funding discovery 00:24:35.039 --> 00:24:37.599 for its own sake. There's that great story about 00:24:37.599 --> 00:24:39.880 the Hooker telescope at Mount Wilson. A beautiful 00:24:39.880 --> 00:24:42.579 illustration of his thinking. He gave the money 00:24:42.579 --> 00:24:44.839 to George Ellery Hale to build what was then 00:24:44.839 --> 00:24:47.559 the largest telescope in the world. And Carnegie, 00:24:47.759 --> 00:24:50.519 who was getting older, was so personally invested 00:24:50.519 --> 00:24:53.460 that he kept pushing them to work faster, hoping 00:24:53.460 --> 00:24:55.740 he could see the results before I depart. He 00:24:55.740 --> 00:24:57.920 was literally investing in expanding our knowledge 00:24:57.920 --> 00:25:00.759 of the universe. He was, and he was always loyal 00:25:00.759 --> 00:25:03.480 to his Scottish roots. He established the Carnegie 00:25:03.480 --> 00:25:05.759 Trust for the Universities of Scotland with $10 00:25:05.759 --> 00:25:09.019 million, an unheard of sum back then. And the 00:25:09.019 --> 00:25:11.359 goal was to improve research and also to help 00:25:11.359 --> 00:25:14.450 poor students afford tuition. Exactly. He also 00:25:14.450 --> 00:25:17.089 bought a private estate in his hometown of Dunfermline 00:25:17.089 --> 00:25:19.529 and opened it to the public as a park. And you 00:25:19.529 --> 00:25:21.750 have the arts. Carnegie Hall, of course, which 00:25:21.750 --> 00:25:24.569 opened in New York in 1891. And he also funded 00:25:24.569 --> 00:25:27.509 the construction of 7 ,000 pipe organs in churches 00:25:27.509 --> 00:25:30.430 and temples. Which shows his non -sectarian approach. 00:25:31.000 --> 00:25:34.079 He saw music, like books, as a tool for moral 00:25:34.079 --> 00:25:36.160 and spiritual uplift that should be accessible 00:25:36.160 --> 00:25:39.259 to everyone, regardless of their faith. And he 00:25:39.259 --> 00:25:41.940 also focused on the professional class, creating 00:25:41.940 --> 00:25:44.759 large pension funds. Yes, he had one for his 00:25:44.759 --> 00:25:47.680 former employees, but the most enduring one was 00:25:47.680 --> 00:25:50.000 the pension fund he created for American college 00:25:50.000 --> 00:25:52.700 professors. That eventually evolved into the 00:25:52.700 --> 00:25:55.000 massive retirement organization we know today 00:25:55.000 --> 00:25:59.269 as TAACRE. And you can't forget the quirkier 00:25:59.269 --> 00:26:02.809 side of his mission to improve things. His investment 00:26:02.809 --> 00:26:05.269 in spelling reform. It's a perfect metaphor for 00:26:05.269 --> 00:26:07.549 his entire philosophy, isn't it? He gave $25 00:26:07.549 --> 00:26:10.170 ,000 a year to the simplified spelling board. 00:26:10.349 --> 00:26:13.710 He saw English spelling as inefficient and illogical. 00:26:13.910 --> 00:26:15.670 He thought if you could just streamline it, change 00:26:15.670 --> 00:26:18.230 though to though, you could lower the barrier 00:26:18.230 --> 00:26:20.329 to literacy for everyone. He wanted to improve 00:26:20.329 --> 00:26:22.809 everything from infrastructure and industry right 00:26:22.809 --> 00:26:24.769 down to the very language we speak. It's this 00:26:24.769 --> 00:26:27.460 total belief in systematic improvement. rational 00:26:27.460 --> 00:26:30.240 design. But the shadow of how that wealth was 00:26:30.240 --> 00:26:33.279 created is always there. We have to turn to the 00:26:33.279 --> 00:26:36.000 darkest chapter of his career. The Homestead 00:26:36.000 --> 00:26:38.599 Strike of 1892. This wasn't just a labor dispute. 00:26:38.759 --> 00:26:41.660 It was a moral catastrophe. It was. A bloody 00:26:41.660 --> 00:26:45.700 143 -day confrontation at his steel plant in 00:26:45.700 --> 00:26:48.660 Homestead. And it permanently damaged Carnegie's 00:26:48.660 --> 00:26:51.119 reputation. It forced people to see the brutal 00:26:51.119 --> 00:26:53.519 cost of his wealth. And his timing is just so 00:26:53.519 --> 00:26:56.460 suspicious. He conveniently departs for his annual 00:26:56.460 --> 00:26:58.740 trip to Scotland right before it all kicks off, 00:26:58.940 --> 00:27:01.859 leaving his notoriously anti -union partner, 00:27:02.079 --> 00:27:06.019 Henry Clay Frick, in charge. him plausible deniability. 00:27:06.380 --> 00:27:08.619 Frick was a cold, efficient operator determined 00:27:08.619 --> 00:27:11.220 to break the union. The union contract was expiring. 00:27:11.359 --> 00:27:13.480 They asked for a small wage increase, and Frick 00:27:13.480 --> 00:27:16.380 came back with a devastating 22 % wage decrease. 00:27:16.660 --> 00:27:18.700 The union refused, so Frick locked them out, 00:27:18.779 --> 00:27:21.259 and things escalated immediately. Frick was prepared 00:27:21.259 --> 00:27:24.319 for a war. He built a 12 -foot barbed wire fence 00:27:24.319 --> 00:27:26.619 around the mill. The workers called it Fort Frick. 00:27:26.960 --> 00:27:28.880 Then he brought in thousands of strikebreakers 00:27:28.880 --> 00:27:31.700 and 300 armed Pinkerton agents to protect them. 00:27:31.799 --> 00:27:33.920 And the arrival of the Pinkertons on barges in 00:27:33.920 --> 00:27:36.559 the river turned into a full -scale battle. A 00:27:36.559 --> 00:27:40.339 brutal firefight. It resulted in 10 deaths, 7 00:27:40.339 --> 00:27:44.039 strikers, 3 Pinkertons. The violence was so extreme 00:27:44.039 --> 00:27:46.900 the state militia had to be called in. This was 00:27:46.900 --> 00:27:49.259 a corporation using a private army against its 00:27:49.259 --> 00:27:52.480 own workforce. The scandal was huge. It even 00:27:52.480 --> 00:27:54.640 led to the attempted assassination of Frick. 00:27:54.890 --> 00:27:57.569 by an anarchist, Alexander Berkman. Berkman shot 00:27:57.569 --> 00:28:00.009 and stabbed Frick, believing that if he removed 00:28:00.009 --> 00:28:02.309 Frick, the man running things on the ground, 00:28:02.509 --> 00:28:05.269 it would force Carnegie, the supposed friend 00:28:05.269 --> 00:28:07.849 of the working man, to take responsibility. Frick 00:28:07.849 --> 00:28:10.269 survived, but the point was made. The system 00:28:10.269 --> 00:28:12.359 was fundamentally violent. Carnegie eventually 00:28:12.359 --> 00:28:15.079 reopened the plant with non -union labor, effectively 00:28:15.079 --> 00:28:17.319 crushing the steelworkers' union for decades. 00:28:17.660 --> 00:28:20.000 And this stain on his reputation was compounded 00:28:20.000 --> 00:28:22.099 by another disaster just a few years earlier, 00:28:22.359 --> 00:28:25.799 the Johnstown Flood of 1889. Right. Carnegie 00:28:25.799 --> 00:28:28.200 was a member of this exclusive resort, the South 00:28:28.200 --> 00:28:30.339 Fork Fishing and Hunting Club, and it was their 00:28:30.339 --> 00:28:32.660 poorly maintained dam that broke and killed over 00:28:32.660 --> 00:28:35.450 2 ,200 people in Johnstown below. The key here 00:28:35.450 --> 00:28:38.750 is the negligence. The sources detail it exhaustively. 00:28:38.970 --> 00:28:41.950 The club, full of Pittsburgh's industrial elite, 00:28:42.089 --> 00:28:45.150 bought this old dam and made cheap, shoddy repairs 00:28:45.150 --> 00:28:49.009 to it. Mud and straw. And most critically, they 00:28:49.009 --> 00:28:51.109 removed the discharge pipes that were designed 00:28:51.109 --> 00:28:53.569 to relieve pressure from the dam. They sold them 00:28:53.569 --> 00:28:55.990 for scrap metal. So when unusually heavy rains 00:28:55.990 --> 00:28:58.690 came, the compromised dam had no safety valve. 00:28:58.910 --> 00:29:01.670 It failed catastrophically, releasing 20 million 00:29:01.670 --> 00:29:04.490 tons of water that just obliterated the valley. 00:29:04.650 --> 00:29:06.869 And how did Carnegie and the other powerful club 00:29:06.869 --> 00:29:09.839 members respond? They avoided all public accountability. 00:29:10.180 --> 00:29:12.539 They formed a relief committee and donated money, 00:29:12.720 --> 00:29:15.359 yes. But their lawyers successfully fought off 00:29:15.359 --> 00:29:17.599 every single lawsuit filed by the survivors. 00:29:18.019 --> 00:29:20.240 No member of the club ever had to take legal 00:29:20.240 --> 00:29:22.559 or public responsibility for the disaster. So 00:29:22.559 --> 00:29:24.859 again, philanthropy is used to soften the blow 00:29:24.859 --> 00:29:27.970 of a profound moral failure. It creates this 00:29:27.970 --> 00:29:30.230 incredibly complicated picture, a man involved 00:29:30.230 --> 00:29:32.910 in a labor war and a deadly disaster who, at 00:29:32.910 --> 00:29:35.130 the same time, is funding institutions dedicated 00:29:35.130 --> 00:29:37.509 to world peace. His passion for international 00:29:37.509 --> 00:29:40.829 peace was his final great cause. And his stance 00:29:40.829 --> 00:29:43.250 on American expansionism after the Spanish -American 00:29:43.250 --> 00:29:46.910 War was genuinely radical. He was fiercely anti 00:29:46.910 --> 00:29:49.509 -imperialist. He strongly opposed the annexation 00:29:49.509 --> 00:29:52.049 of the Philippines. And our sources detail this 00:29:52.049 --> 00:29:54.869 truly amazing gesture he made. He personally 00:29:54.869 --> 00:29:57.809 offered $20 million to the Filipino people. The 00:29:57.809 --> 00:30:00.190 exact amount the U .S. had paid Spain for the 00:30:00.190 --> 00:30:02.549 islands. He offered them the money so they could 00:30:02.549 --> 00:30:04.289 buy their independence from the United States. 00:30:04.549 --> 00:30:06.910 He was essentially trying to privatize the end 00:30:06.910 --> 00:30:09.170 of colonialism. The offer never went anywhere, 00:30:09.329 --> 00:30:12.190 but it shows how serious he was. He joined the 00:30:12.190 --> 00:30:14.779 anti -imperialist league. alongside people like 00:30:14.779 --> 00:30:17.259 Mark Twain. His ambition for peace led him to 00:30:17.259 --> 00:30:19.140 establish the Carnegie Endowment for International 00:30:19.140 --> 00:30:22.740 Peace in 1910 and to fund the Peace Palace at 00:30:22.740 --> 00:30:25.460 The Hague. He truly believed he could apply his 00:30:25.460 --> 00:30:27.940 systematic, rational approach to ending war. 00:30:28.180 --> 00:30:30.960 In 1913, he famously predicted that the end of 00:30:30.960 --> 00:30:34.079 war was as certain to come and come soon as day 00:30:34.079 --> 00:30:36.980 follows night. And then the ultimate tragic irony, 00:30:37.220 --> 00:30:40.440 the outbreak of World War I in 1914. It must 00:30:40.440 --> 00:30:42.380 have been a profound personal devastation for 00:30:42.380 --> 00:30:45.250 him. complete shock. It was a brutal contradiction 00:30:45.250 --> 00:30:48.450 of his core philosophy that all grows better. 00:30:48.650 --> 00:30:51.069 The world wasn't getting better. It was descending 00:30:51.069 --> 00:30:53.569 into the worst conflict in human history. Which 00:30:53.569 --> 00:30:55.650 brings us to the final part of our deep dive, 00:30:55.869 --> 00:30:59.579 Carnegie's intellectual paradox. He repeatedly 00:30:59.579 --> 00:31:01.980 and passionately called himself a disciple of 00:31:01.980 --> 00:31:04.859 the philosopher Herbert Spencer. Yes, he claimed 00:31:04.859 --> 00:31:07.720 Spencer was his teacher. He found great comfort 00:31:07.720 --> 00:31:10.619 in social evolution. He said reading Spencer 00:31:10.619 --> 00:31:12.700 and Darwin freed him from traditional religion 00:31:12.700 --> 00:31:15.740 and gave him this optimistic vision. All is well 00:31:15.740 --> 00:31:18.799 since all grows better became my motto. It allowed 00:31:18.799 --> 00:31:21.160 him to see the chaos of the Gilded Age as just 00:31:21.160 --> 00:31:23.579 a necessary painful step toward a better future. 00:31:24.140 --> 00:31:26.200 So he saw his own rise and the concentration 00:31:26.200 --> 00:31:28.900 of wealth as just survival of the fittest in 00:31:28.900 --> 00:31:32.059 the marketplace. But here's the paradox. If Spencer 00:31:32.059 --> 00:31:34.660 was his teacher, why did Carnegie violate almost 00:31:34.660 --> 00:31:37.339 every single one of Spencer's core beliefs? That 00:31:37.339 --> 00:31:39.440 is the central question. Spencerian evolution 00:31:39.440 --> 00:31:42.579 was an extreme form of laissez -faire. Spencer 00:31:42.579 --> 00:31:44.200 was against almost any government interference 00:31:44.200 --> 00:31:46.759 taxes, tariffs, public schools, you name it. 00:31:46.779 --> 00:31:48.859 He thought helping the unfit was a disservice 00:31:48.859 --> 00:31:51.579 to progress. Okay, so let's break down the contradictions. 00:31:52.019 --> 00:31:55.799 First, the tariffs. Carnegie was a master lobbyist 00:31:55.799 --> 00:31:58.299 for government protection. A total violation 00:31:58.299 --> 00:32:01.559 of Spencer's philosophy. Spencer saw Terex as 00:32:01.559 --> 00:32:04.079 corrupt government interference that benefited 00:32:04.079 --> 00:32:06.859 a few manufacturers, like Carnegie, at the expense 00:32:06.859 --> 00:32:09.740 of everyone else. Second, the ruthless way he 00:32:09.740 --> 00:32:12.660 built his business, eliminating all competition. 00:32:13.140 --> 00:32:16.140 Spencer condemned that, too. He argued that when 00:32:16.140 --> 00:32:18.599 powerful businesses intentionally ruined their 00:32:18.599 --> 00:32:20.859 competitors, they were committing what he called 00:32:20.859 --> 00:32:24.799 commercial murder. Carnegie's entire empire was 00:32:24.799 --> 00:32:26.940 based on the very consolidation that Spencer 00:32:26.940 --> 00:32:29.319 hated. And finally, and this is the most ironic 00:32:29.319 --> 00:32:32.420 one, Spencer's view on charity itself. Spencer 00:32:32.420 --> 00:32:34.859 was hostile to organized philanthropy. He saw 00:32:34.859 --> 00:32:37.359 big charitable institutions as becoming corrupt, 00:32:37.660 --> 00:32:40.920 lifeless mechanisms. He thought any form of organized 00:32:40.920 --> 00:32:43.079 charity was a mistake because it delayed the 00:32:43.079 --> 00:32:45.559 natural evolutionary process of weeding out the 00:32:45.559 --> 00:32:48.059 weakest parts of society. So Andrew Carnegie 00:32:48.480 --> 00:32:50.380 the greatest builder of systematic centralized 00:32:50.380 --> 00:32:53.039 charities in history, claimed to be the disciple 00:32:53.039 --> 00:32:55.420 of a man who thought that very act was morally 00:32:55.420 --> 00:32:58.400 and economically wrong. The cognitive dissonance 00:32:58.400 --> 00:33:01.390 is staggering. And it all culminates in that 00:33:01.390 --> 00:33:03.950 famous story of Spencer visiting Carnegie's steel 00:33:03.950 --> 00:33:06.829 mills. Carnegie proudly showed them off, thinking 00:33:06.829 --> 00:33:08.869 they were the perfect embodiment of Spencer's 00:33:08.869 --> 00:33:10.910 philosophy in action. And Spencer's reaction 00:33:10.910 --> 00:33:13.890 was just devastating. He looked at the deafening 00:33:13.890 --> 00:33:16.930 noise, the intense heat, the brutal conditions, 00:33:16.970 --> 00:33:19.549 and he reportedly said, six months residence 00:33:19.549 --> 00:33:23.190 here would justify suicide. Wow. Where Carnegie 00:33:23.190 --> 00:33:26.109 saw the engine of progress, Spencer saw a dystopian 00:33:26.109 --> 00:33:28.960 hellscape unfit for human life. And yet, Carnegie 00:33:28.960 --> 00:33:31.819 just kept rationalizing. He argued that concentrating 00:33:31.819 --> 00:33:34.799 capital was a necessary evolution. He believed 00:33:34.799 --> 00:33:37.140 his structured charity, which gave people tools 00:33:37.140 --> 00:33:39.400 like libraries, enabled them to develop themselves. 00:33:39.819 --> 00:33:41.660 He even had that interesting defense of the working 00:33:41.660 --> 00:33:44.460 poor, didn't he? He did. He argued that the poor 00:33:44.460 --> 00:33:46.579 often had an advantage because they were raised 00:33:46.579 --> 00:33:48.799 with a stronger work ethic than the spoiled sons 00:33:48.799 --> 00:33:52.279 of rich men. He saw himself as society's specialized 00:33:52.279 --> 00:33:54.940 agent, the most efficient accumulator of wealth, 00:33:55.059 --> 00:33:56.960 and therefore the most efficient distributor 00:33:56.960 --> 00:33:59.680 of it. It's the ultimate rationalization of the 00:33:59.680 --> 00:34:02.579 robber baron era. The ruthlessness of the man 00:34:02.579 --> 00:34:04.640 in the second part of his life is justified by 00:34:04.640 --> 00:34:07.339 the immense systematic benevolence of the man 00:34:07.339 --> 00:34:09.900 in the third part. It's a paradox he never fully 00:34:09.900 --> 00:34:13.000 resolved. Andrew Carnegie died on August 11th, 00:34:13.000 --> 00:34:16.420 1919 at the age of 83. He'd spent nearly two 00:34:16.420 --> 00:34:18.980 decades as a full -time philanthropist. And he 00:34:18.980 --> 00:34:21.320 achieved his goal of dying poor, or at least 00:34:21.320 --> 00:34:24.840 not rich. He gave away almost $351 million in 00:34:24.840 --> 00:34:28.400 his life. And his final will dedicated his remaining 00:34:28.400 --> 00:34:31.539 $30 million to his foundations, ensuring almost 00:34:31.539 --> 00:34:34.119 all of it was returned to society as he saw it. 00:34:34.239 --> 00:34:36.639 His legacy is literally built into the American 00:34:36.639 --> 00:34:38.960 landscape. The neighborhood around his New York 00:34:38.960 --> 00:34:41.119 mansion is still called Carnegie Hill. And his 00:34:41.119 --> 00:34:43.199 name spans from the desert floor to the stars. 00:34:43.400 --> 00:34:47.280 The giant saguaro cactus is named Carnegie Gigantia. 00:34:47.440 --> 00:34:49.599 And he sponsored the expedition that discovered 00:34:49.599 --> 00:34:52.559 the famous dippy, the dinosaur, Diplodocus Carnegie. 00:34:52.800 --> 00:34:55.380 He then sent casts of dippy to museums all over 00:34:55.380 --> 00:34:57.960 the world. He was a steel titan, but also a global 00:34:57.960 --> 00:34:59.860 philanthropist, founding institutions that are 00:34:59.860 --> 00:35:02.039 still central to research and education today. 00:35:02.380 --> 00:35:04.659 Ultimately, Andrew Carnegie forced the modern 00:35:04.659 --> 00:35:07.929 world to ask what immense wealth is for. He argued 00:35:07.929 --> 00:35:10.030 that concentrating capital, despite the brutal 00:35:10.030 --> 00:35:12.610 process of creating it, was a beneficial thing 00:35:12.610 --> 00:35:15.489 for society if the resulting fortune was systematically 00:35:15.489 --> 00:35:18.599 given back. Which leaves us with the big provocative 00:35:18.599 --> 00:35:21.820 thought that defines his whole life. Does Carnegie's 00:35:21.820 --> 00:35:24.719 story prove his belief that massive wealth accumulation, 00:35:25.119 --> 00:35:27.360 when it's followed by systematic giving, is the 00:35:27.360 --> 00:35:30.679 best model for society? Or does the violence 00:35:30.679 --> 00:35:32.840 and controversy of how he made the money homestead 00:35:32.840 --> 00:35:36.300 Johnstown prove his other point, that the man 00:35:36.300 --> 00:35:39.159 who dies thus rich dies disgraced no matter how 00:35:39.159 --> 00:35:41.250 much he gives away in the end? It's a tension 00:35:41.250 --> 00:35:43.250 we still grapple with today every time we talk 00:35:43.250 --> 00:35:46.010 about billionaires and philanthropy. Carnegie's 00:35:46.010 --> 00:35:47.969 life demands that you look at the means and the 00:35:47.969 --> 00:35:50.829 ends and ask yourself if 3 ,000 libraries can 00:35:50.829 --> 00:35:53.289 ever fully justify the human cost of the steel 00:35:53.289 --> 00:35:55.429 that built them. That, I think, is a deep dive 00:35:55.429 --> 00:35:56.550 you have to continue for yourself.