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A Modernized Version of Andrew Carnegie's 'The Gospel of Wealth' Andrew Carnegie's 1889 classic on spending what he called 'excess wealth,' modernized for today's audience.

By Matthew McCreary

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Andrew Carnegie was a Scottish-American industrialist who became one of the richest men in world history through his company, Carnegie Steel. He sold Carnegie Steel to J.P. Morgan in 1901 for $480 million -- according to Time, that number equated to more than 2 percent of the American GDP. He was worth the equivalent of $309 billion today, and he spent the last several years of his life donating the majority of that money to universities, libraries and other public causes.

Carnegie wrote The Gospel of Wealth in 1889, when he still ran Carnegie Steel, advising others on how best to follow his lead. His words have been edited here to's modern style, which will make for an easier read. However, it's no substitute for the real thing, which you can read here. Or, you can listen to Carnegie read it himself below.

The Gospel of Wealth by Andrew Carnegie

The greatest problem we face today is the proper administration of wealth, so that the rich and poor can live harmoniously.

The conditions of human life have been revolutionized within the past few hundred years. There used to be little difference between a chief and his people. Today, a millionaire in America lives in a palace, while a laborer can only afford a cottage.

This change is highly beneficial -- in fact, it's essential. It is much better that some people enjoy the best literature, art and refinement, than that no one enjoys it. Inequality is better than universal squalor, because without wealth there can be no patrons or philanthropists.

The "good old times" were not good old times, and a relapse to old conditions would be disastrous to both the servant and the master. It would sweep away civilization.

The "good old times" were not good old times. Neither master nor servant was as well situated then as today. A relapse to old conditions would be disastrous to both -- not the least so to him who serves -- and would sweep away civilization with it.

-- From the 1889 version of "The Gospel of Wealth"

But, whether we consider the change good or bad, it's here. We can't change it, so we must accept it and make the best of it: It is a waste of time to criticize the inevitable.

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How we have arrived at the present conditions

It is easy to see how the change has come. It's especially visible in the manufacturing industry. In the past, items were manufactured in homes or small shops, which were part of the household. The master and apprentices worked and lived together, and therefore enjoyed the same lifestyle. Then, when these apprentices rose to be masters, there was little or no change in their mode of life, and they educated others in the same way. There was substantial social and political equality for manufacturers -- though they had little or no political voice at the time.

That way of manufacturing led to crude items sold at high prices. Today, we can sell commodities of excellent qualities at much lower prices -- prices that even the preceding generation would have deemed incredible.

Civilization has benefited through this, and now the poor enjoy what the rich could not before afford. Things we once considered luxuries are now necessities. The laborer now has more comforts than the landlord had a few generations ago. The farmer has more luxuries than the landlord had, with better clothes and a better house. The landlord today has access to better books, art and theatre, than the king could then obtain.

We pay a great price for these benefits: Employers and employees have become strangers to one another.

Thousands of operatives work in factories, mines and banks, and the employer knows little or nothing of each one. On the other end, the employer is little better than a myth to his employees.

They are divided, and they do not interact regularly. Rigid castes are formed, and, as usual, mutual ignorance breeds mutual distrust. Each caste feels little for the other, and they blame every misfortune on each other.

All intercourse between them is at an end. Rigid castes are formed, and, as usual, mutual ignorance breeds mutual distrust. Each caste is without sympathy for the other and ready to credit anything disparaging in regard to it.

-- From the 1889 version of "The Gospel of Wealth"

Because the employer faces competition from other businesses, labor rates are often very strict. Thus, there is natural friction between the employer and the employed, between capital and labor, between rich and poor. Human society loses homogeneity -- loses a sense of equality.

And so the price for competition is also great, just as its advantages are great. We owe our wonderful material development to the law of competition, which in turn improves conditions for everyone.

This competition may sometimes be hard for an individual, but it is here and there are no substitutes for it.

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Why individualism is better than communism

More importantly, it is best for humanity, because it insures survival of the fittest. We must accept and welcome great inequality of environment and business into the hands of a few -- that the competition between these few is essential for progress.

It follows that there should be great scope for merchants and manufacturers of special ability to conduct their businesses at a great scale. We can see that the necessary talent for organization and management is rare, because it invariably leads to enormous rewards -- regardless of where it comes from or under what conditions.

When seeking a partner, experienced businessmen always evaluate the person, not their monetary value. A talented person will soon create capital, but without special talent, the money will fly away.

The experienced in affairs always rate the MAN whose services can be obtained as a partner as not only the first consideration, but such as to render the question of his capital scarcely worth considering, for such men soon create capital; while, without the special talent required, capital soon takes wings.

-- From the 1889 version of "The Gospel of Wealth"

These talented people are like simple interest for firms or corporations, bringing in more money than they spend. Those without talent will do the opposite.

There is no middle ground. If a business does not earn at least interest, it will soon become bankrupt. It must either go forward or fall behind: to stand still is impossible. It's essential that a successful business should be profitable in addition to the interest.

If talented people constantly earn profit, then under a free economy, they will soon earn more revenue than they can fairly spend on themselves. This is as beneficial for civilization as competition or the evolution of manufacturing.

Some will argue against this, but civilization is better with this principal than with any other that has been tried. Perhaps a new solution will arise, but it hasn't yet.

The socialist or anarchist who seeks to overturn present conditions attacks the foundation of civilization itself, because civilization started when capable, industrious workers said to the lazy, "If you do not sow, you will not reap." This separated the drones from the bees and ended primitive communism.

Civilization is dependant upon the sacred nature of property -- that a laborer has the right to a hundred dollars in the bank, just as the millionaire has the right to millions. To anyone who would argue for communism: We have tried that. All of the progress that has come since that trial resulted from its displacement -- from the accumulation of wealth by those who have the ability and energy to produce it.

Even if we agree that it would be nobler to labor for others -- just as Swedenborg said that the angels labor for each other in Heaven -- it is not evolution. It's revolution. That is to say, we would need to change human nature itself, and that takes eons.

It is not practical in our day and age.

Our duty is to now and what comes next for our generation, because we cannot uproot the universal tree of humanity. We can only bend it a little in a favorable direction, and the laws of individualism, private property, accumulation of wealth, and competition are the soil in which society so far has produced the best fruit.

These laws might be imperfect to the idealist, or unjust, but they are like the talented people who move civilization forward. They are the best and most valuable thing that humanity has yet accomplished.

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How can we make individualism more equitable?

Our current condition of affairs is in the best interest of civilization, but it still gives wealth to only the few. What is the proper mode of administering wealth from there?

I believe I have the solution.

Understand that I speak of fortunes, not moderate sums saved by many years of effort. That is competence -- returns required for the comfortable maintenance and education of families -- and it should be everyone's aim.

It is not wealth.

There are three ways to dispose of surplus wealth:

  1. It can be left to the families of the deceased, passed from generation to generation.

  2. It can be bequeathed for public purposes.

  3. It can be administered by its possessor.

Most wealth tends to be applied in either the first or second way, but let's consider each in turn.

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1. Leave the wealth to the families of the deceased.

The first method is the most unfair. In monarchies, estates and wealth are left to the first son so the vanity of the parent can be gratified by the thought that his name and title will continue unimpaired. But history teaches us that this is futile -- the successors eventually become impoverished through their mistakes or the decrease in value of their land. Even in Great Britain, where the strict law of entail can prevent heirs from selling an estate, it is not enough to maintain status. The land rapidly passes into the hands of a stranger.

In republican countries, the division of property among the children is fairer, but it still begs the question: Why should people leave great fortunes to their children? If it is from affection, is it not misguided?

Generally speaking, it is not good for children to be so burdened. It is not beneficial for the state, either.

Beyond providing for a spouse and children some very moderate allowances, it is without question that leaving great sums often do more harm than good.

Beyond providing for the wife and daughters moderate sources of income, and very moderate allowances indeed, if any, for the sons, men may well hesitate, for it is no longer questionable that great suns bequeathed oftener work more for the injury than for the good of the recipients.

-- From the 1889 version of "The Gospel of Wealth"

Wise people will soon conclude that such bequests are an improper use of wealth.

Some parents will fail to educate their children in a way that allows them to earn a livelihood, and these children shouldn't be cast into poverty. But, both they and those who choose to work for public ends without consideration for monetary gains, should be provided for with moderation.

There are instances of millionaires' children who were unspoiled by wealth, and they performed great services in the community. Such people are the salt of the earth, valuable as they are rare.

Thoughtful people should consider the rule, not the exception, when looking at the enormous amounts of wealth that are regularly passed on. They should say, "I would leave my child a curse before a dollar," and admit that enormous legacies are inspired not by the children's welfare, but by family pride.

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2. Leave the excess wealth for public uses after death.

The second method of disposing excess wealth -- leaving it for public uses -- only works if people are content to wait until they are dead before they allow their wealth to do good in the world. The history of such legacies does not inspire much hope.

Often, whatever goal the giver had is never attained, or else it is thwarted. These failed gifts then become nothing more than monuments to mistakes.

Doing good for the community through these gifts requires as much talent as it took to acquire the wealth in the first place. Besides, no one should be praised for doing something inevitable, nor should they be thanked by the community for only leaving wealth behind at death. In fact, these people would often leave nothing behind if they could take their vast sums with them.

Men who leave vast sums in this way may fairly be thought men who would not have left it at all, had they been able to take it with them.

-- From the 1889 version of "The Gospel of Wealth"

These people will not be remembered gracefully, because there is no grace in their gifts. It's no wonder, really, that these bequests so often lack others' blessing.

The growing momentum for taxing large estates left at death more and more heavily is a positive indication of a good change in public opinion. Pennsylvania now takes, with some exceptions, 10 percent of the property left by its citizens. The budget presented in the British Parliament recently proposes to increase death taxes -- and most importantly, the new tax is a graduated one.

Of all forms of taxation, this seems the wisest. Men who continue hoarding great sums all their lives, when it should be used for the good of the community, should be made to feel that the community and the state cannot be deprived of its proper share. By taxing estates heavily at death, the state marks its condemnation of the selfish millionaire's unworthy life.

Nations should go much further in this direction. In fact, it's difficult to set limits on just how much of a rich person's estate should go to the state at death. By all means, these taxes should be graduated, beginning at nothing upon moderate sums to dependents, and increasing rapidly as the amounts swell, until it is like Shylock's fortune in Shakespeare's The Merchant of Venice: "... The other half / Comes to the privy coffer of the state."

This policy would incentivize the rich to administer wealth during their lives, which is what society should be aiming for because it is the most fruitful method for the people. However, it would not sap the root of enterprise or make people less ambitious to accumulate wealth. In fact, for those who do wish to leave great fortunes and be talked about after their death, it will attract even more attention because it is a somewhat nobler ambition to have enormous wealth paid to the state from their fortunes.

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3. Spend the money for public good during life.

There is only one other way of using a great fortune, and within it is the true antidote for the temporary, unequal distribution of wealth. We have the reconciliation of the rich and the poor -- a reign of harmony. It is another ideal, different from the communist one in that it requires only evolution, not the overthrow of our civilization.

This ideal is founded upon our present individualism, and we can put it in practice by degrees starting today. Through it, we can live in an ideal state, where the surplus wealth of the few will become -- in the best sense -- the property of the many, because it will be administered for the common good. This wealth can be made a potent force for our collective elevation while passing through only a few hands, rather than given in small sums to the people themselves.

... the surplus wealth of the few will become, in the best sense the property of the many, because administered for the common good, and this wealth, passing through the hands of the few, can be made a much more potent force for the elevation of our race than if it had been distributed in small sums to the people themselves.

-- From the 1889 version of "The Gospel of Wealth"

Even the poorest can be made to see this and agree that the fortunes gathered by some of their fellow citizens, while being used for the masses' benefit, are more valuable through public use than if the money was scattered among them over the course of many years in trifling amounts.

Take the results that flow from the Cooper Institute (a small institute in Manhattan that offered free classes for its admitted students), for instance, which helps the best portion of New Yorkers who do not possess means. Now, compare these results with what good might have come if Mr. Cooper had instead distributed an equal to sum to the masses during his lifetime. Through this comparison, we can form some estimate of the possibilities for civilization under the present law of the accumulation of wealth.

Much of the wealth would have been wasted on nice dinners or excess if it were given to everyone in small quantities. Even if people used their portion in the best way possible and improved their homes, this would not be as helpful as the benefits from the Cooper Institute for generations.

Let the advocate of violent or radical change ponder well this thought.

Another example is Mr. Tilden's bequest of $5 million for a free library in New York City, even though it would have been much better if Mr. Tilden had devoted the last years of his own life to the proper administration of this gift. Then, there could have been no legal contest or cause of delay to interfere with his aims. But, let's assume that Mr. Tilden's millions finally become the means of giving to this city a noble public library, where the treasures of the world contained in books will be open to all forever, without money and without price.

Considering the good such a library would do for everyone who congregates in and around Manhattan Island, would its permanent benefit be less than if the $5 million circulated in small sums to the hands of the masses? Even the strongest advocate of communism might doubt this, and most would have no doubt about which is better.

The options we have in this life are poor and restricted. Our horizon is narrow and our best work is imperfect. But, the rich should be thankful for one important gift: They have the power to make great donations that will have a lasting, positive benefit on their fellows. Through this, the rich can dignify their own lives.

It is the highest form of life.

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The rich man's duty

Tolstoy tells us to imitate the life of Christ, but by recognizing the changed conditions of this age, we can instead adopt ways of expressing his spirit in more suitable ways. We can still labor for the good of our fellows, which was the essence of his life and teaching, but we labor in a different manner.

This, then, is the rich man's duty:

  1. Set an example of modest, unostentatious living, shunning display or extravagance.

  2. Provide moderately for the legitimate wants of his dependents.

  3. Consider all surplus revenues which come to him simply as trust funds, which he should administer in a way that, to his judgment, will produce the best results for the community.

By doing these things, the rich offer more than just money -- they can also offer their superior wisdom, experience and ability to administer, doing for others better than they would or could do for themselves.

There are still difficult questions to answer. What are moderate sums to leave family members? What is modest living? What is the test of extravagance?

There must be different standards for different conditions. It is as impossible to name exact amounts or actions as it is to define good manners, good taste or the rules of propriety. Nevertheless, these are truths, well-known although undefinable. Public sentiment is quick to know and to feel what offends these, and the same holds true for wealth.

Public sentiment is quick to know and to feel what offends these. So in the case of wealth. The rule in regard to good taste in the dress of men or women applies here. Whatever makes one conspicuous offends the canon.

-- From the 1889 version of "The Gospel of Wealth"

The rule in regard to good taste for fashion applies here. Whatever makes a person stand out often offends, and if any family is known chiefly for display and extravagance, we have no difficulty in making judgments. Likewise for the use or abuse of surplus wealth, or to generous cooperation for the public good, or to hoarding until the end.

The verdict rests with the best and most enlightened public sentiment. The community will judge, and its judgments will not often be wrong.

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How the money should be spent

The best use of surplus wealth has already been outlined, and those who would administer wisely must be careful. One of the serious obstacles to improvement is indiscriminate charity -- it would be better to throw money into the sea than to spend it on encouraging the slothful, drunken and unworthy.

Of every $1,000 spent in "charity" today, it is probable that $950 is spent unwisely. In fact, that money often produces the evils it proposes to mitigate or cure.

A well-known writer of philosophic books admitted the other day that he gave a quarter to a man who approached him as he was going to visit a friend. The writer knew nothing of the beggar's habits, or the way he would use the money, but he had every reason to believe it would be spent improperly. This man said he believed in Social Darwinism, but the quarter proved him to be a thoughtless donor. He only gratified his own feelings, and this was probably one of the most selfish and very worst actions of his life, for in all respects he is a most worthy man.

In giving charity, the main consideration should be to help those who will help themselves -- to provide part of the means by which those who desire to improve can do so. The charity should be given to those who desire help that will allow them to rise -- but only to help them, and rarely ever to do it all. Neither the individual nor the race is improved by alms-giving.

Those who are worthy of assistance seldom require it. The really valuable people never do, except in cases of accident or sudden change. Everyone can think of someone who could genuinely benefit from temporary assistance, and these people should not be overlooked. But, the amount a benefactor can wisely give to individuals is limited by the lack of knowledge surrounding each person's circumstances.

Every one has, of course, cases of individuals brought to his own knowledge where temporary assistance can do genuine good, and these he will not overlook. But, the amount which can be wisely given by the individual for individuals is necessarily limited by his lack of knowledge of the circumstances connected with each.

-- From the 1889 version of "The Gospel of Wealth"

A true reformer is as careful and anxious not to aid the unworthy as he is to aid the worthy -- and perhaps even more so, for in alms-giving, more injury is done by rewarding vice than by relieving virtue.

The rich should follow the examples of Peter Cooper, Enoch Pratt of Baltimore, Mr. Pratt of Brooklyn, Sen. Stanford and others, who know that the best means of benefiting the community is to place within its reach the ladders upon which the aspiring can rise. For example, parks and means of recreation, which help the body and mind; works of art, which give pleasure and improve the public taste; and public institutions of various kinds, which improve the general condition of the people. In this manner, returning surplus wealth to the masses is best calculated to do them lasting good.

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The keys to proper administration of wealth

This is how we solve the problem of rich and poor. The laws of accumulation and distribution will be left free. Individualism will continue, but the millionaires will be only trustees for the poor, intrusted for a time with a great part of the increased wealth of the community. They will administer it to the community far better than it could or would have done itself.

The best minds will see that there is no better way of disposing surplus wealth than by using it year by year for the general good. This day already dawns.

Some may die while sharing in great business enterprises, from which their capital cannot be or has not been withdrawn, and it will be left chiefly at death for public uses. But those who die and leave behind many millions of available wealth, which they should have administered during life, will pass away "unswept, unhonored and unsung," regardless of what he does with what he cannot take with him.

The public verdict for these people will be: "The man who dies rich, dies disgraced."

This is, in my opinion, the true gospel concerning wealth. By following it obediently, we will someday solve the problem of the rich and poor, and we will bring "peace on earth, good will toward men."

Such, in my opinion, is the true Gospel concerning Wealth, obedience to which is destined some day to solve the problem of the Rich and the Poor, and to bring "Peace on earth, among men Good-Will."

-- From the 1889 version of "The Gospel of Wealth"

Matthew McCreary

Entrepreneur Staff

Associate Editor, Contributed Content

Matthew McCreary is the associate editor for contributed content at

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