The Grey Chronicles

2009.October.3

Carnegie, Steel, and the Philippines



Andrew CarnegieIn the 02 April 2007 issue of The New Republic, Jackson Lears’ book review of the biography of Andrew Carnegie written by David Nasaw (2006) was both interesting and revealing. Lears (2007: 46) writes:

“Carnegie was a different character altogether. For all his ruling-class narcissism and his stupefying ignorance of his workers’ lives, he comes across in Nasaw’s pages as a fascinating and ultimately likable figure. … He was awash in his own self-importance, but he was an engaging conversationalist and an adept orchestrator of dinner parties. … Carnegie developed a more capacious conception of the public good. … Carnegie strained to magnify his own greatness, too. His spreading steelworks, he believed, were more than mere machines for making money: they were evidence of the progress of civilization.”

After touring Henry Bessemer’s steel plant in Sheffield, England in 1872, Andrew Carnegie built a plant in Braddock, Pennsylvania, outside Pittsburgh and named it the Edgar Thomson Works, after his old boss at Pennsylvania Railroad. When the shift from iron to steel combined with the resurgent railroad boom became imminent, Carnegie enlarged the firm into Carnegie Steel after forming alliances with the big coke man in Pittsburgh, Henry Clay Frick. Later, on March 1901, Charles Schwab, Frick’s successor as president of Carnegie Steel, persuaded J.P. Morgan to buy out Carnegie for the then-unimaginable sum of $400 million and thus, United States Steel was born.

In terms of Carnegie’s management style, Lears states:

“Carnegie never referred to [his workers] as individuals, only as the mass of men who made up that significant entry on the books, «labor costs.» And he was obsessed with minimizing costs, even as he allowed the Amalgamated Association of Iron and Steel Workers to organize at Edgar Thomson, defended unions in public, and declared himself (with preposterous self-deception) a “fellow workman.” He believed that he had come up with the key to labor peace: a sliding scale of wages based on the price of steel. When steel prices fell, wages would be cut. Since capital and labor were part of the same organism, workers would willingly share in the travails of management. Individual suffering during stormy economic weather was unavoidable and indeed necessary to advance what [the British philosopher] Herbert Spencer called “the interests of universal humanity.” … Yet there were times when they accepted wage cuts as part of the logic of the marketplace: better lowered pay than layoffs. … As conflict intensified, Carnegie abandoned his earlier support for labor unions, declaring in 1890 that they represented narrow interests, while he embodied, as always, the interests of the broader community: by keeping labor costs down, he kept prices down for all. This pig-headed self-regard could hardly promote harmony between labor and capital.” [Emphasis added.] (Lears, 2007: 48)

Lears offered a simple moral for his review: “[I]t takes capital to create more capital. Hard work may (or may not) be ennobling, but only rarely is it by itself enriching.”

Later in life, Carnegie the plutocrat became a philanthropist.

“It may have been «the community» rather than God that gave Carnegie his money, but the consequences were the same: he had to give it back. Celebrating «the advantages of poverty» as an aid to character formation, he declared it a sin to die rich and dismissed private inheritances as a moral disgrace.” (Lears, 2007: 45)

Thus, the result: Carnegie Institute in Washington, the headquarters of one of the world’s most important centers of scientific research; and in 1911, the Carnegie Corporation, the largest philanthropic trust in history up to that time; aside from libraries, such as the Carnegie Library at Mount Vernon Place donated to the city in 1902; schools, such as the Carnegie Mellon University; as well as foundations such as the Carnegie Endowment for International Peace.

“In 1898, [Andrew] Carnegie had supported the war to free the Cubans from Spanish domination, but unlike many other Americans, he was appalled by the McKinley administration’s drive to acquire the Philippine Islands. His arguments against the empire were political and economic as well as moral. Trade, he insisted, does not follow the flag, colonies do not mean new markets, and money spent on military adventures abroad would come out of funds needed for internal improvements at home. But what most outraged him was the imperialists’ indifference to the Filipinos’ desire for self-determination. The advocates of the empire, prating of freedom and democracy, were perfectly willing to crush the Filipino independence movement—even if it took years of guerrilla warfare, which it did. Unlike other anti-imperialists at the time, Carnegie did not dismiss the Filipinos as savages who should be allowed to stew in their own juices. On the contrary, he wrote in 1899, “They have just the same feelings as we have, not excluding love of country, for which, like ourselves, as we see, they are willing to die.” (Lears, 2007: 49)

It was a pleasant surprise to know that Andrew Carnegie voiced his objections of America’s desire to colonize the Philippines. No Philippine history book, at least while I was studying it, specifically authored by Filipinos, even mentioned this fact or at least included it as a footnote.

As it came to pass, as every Filipino knows what happened later: by way of the Treaty of Paris, Spain “ceded” the Philippines to America, even though the first republic, a very short one, declared its independence on 12 June 1898 under the leadership of Emilio Aguinaldo; and the American Occupation of the country endured for almost 50 years, until 04 July 1946.

Annotations : Probably, Carnegie also epitomized Maslow’s hierarchy of needs. While young, he amassed his fortunes albeit hardships and sacrifice were far more likely to be exacted upon the laboring classes, and in old age, he gave back to society as a gesture of his self-actualization?

Could the same be said of our contemporary plutocrats? Bill Gates really comes to mind.


Notes:

Lears, Jackson (2007). Money Changes Everything. The New Republic. 236: 4810. Washington: CanWest Publications, (02 April) 2007. pp. 44—52. back to text.

Nasaw, David (2006). Andrew Carnegie. Place: Penguin Press, October 2006. 878pp. As reviewed by Lears (2006). back to text.

Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 LicenseDisclaimer: The posts herein do not necessarily represent any organization’s positions, strategies or opinions. Read the full version of self-imposed rules for this blog: A New Year; New Rules. Unless otherwise expressly stated, the posts are licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.
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