[The following is Episode 13 of my 16-part documentary series entitled Larger than Life, about the role that beliefs play in shaping the events of our civilization.]
He
had come to the United
States in 1848, when he was a boy, only
twelve years of age, with only five years of schooling. His father, a weaver, had left their native Scotland , with
his family, after the widespread use of a new invention, the power loom, had
robbed weavers of their profession. They
settled in Pennsylvania ,
poor and destitute, staking their future on the promise of a new life in a new
land. The boy would never return to
school. He found immediate employment at
a mill, where he earned $2 a week, and his dedication to his work brought him
rapid advancement. A year later, he was
working as a clerk at a telegraph office, and his penchant for rapidly memorizing
faces and addresses, to speed up delivery of messages, led to even more
success, including wage increases which raised his salary to $20 a month. He learned Morse code, and found a new career
as a telegraph operator, and in 1856 made his first investment, purchasing ten
shares of stock in a message and freight delivery service. Two years later, he invested in the new
invention of sleeping cars for railroads, and exclaimed, after reaping a
substantial return, “Blessed be the man who invented sleep.” In 1859, at the age of twenty-four, he was
made superintendent of the Pittsburgh division
of the Pennsylvania railroad, and two years
later, was investing in oil fields in Pennsylvania . By 1865, he was at the head of a
bridge-building company, as well as an iron company, both of which he had
formed in partnership with friends.
Profiting from a high demand for iron after the end of the American
Civil War, as well as innovations in production and sales implemented by his
employees, his fortunes continued to grow.
It was with some reluctance that he expanded his operations into the
making of steel, complaining that it took more time and was costlier to
manufacture than iron, but it was in steel that he would find his greatest and
most enduring successes. And, in 1901,
when he finally sold his steel empire and retired, it would be for the sum of
250 million dollars. From his humble
beginnings as an impoverished, poorly educated Scottish immigrant to his
phenomenal rise as a captain of industry, Andrew Carnegie would come to
symbolize the awesome, transforming power of the industrial revolution, as well
as the titanic, unforgiving power of America ’s robber barons.
The industrial revolution was like
none other in human history. It was not
a rebellion of peoples, not a political or social upheaval like the American
and French Revolutions. But its outcome
would fundamentally change the lives of individuals at all levels of society,
would radically transform the balance of power among nations, and would force
philosophers, theologians, and scientists to rethink the role of man’s place in
the world, and civilization’s ultimate destiny.
Like other revolutions, it had been brought on by a number of distinct
causes, which collectively prepared the way for a sweeping change or
upheaval. One of the most important had
been the Crusades, during the Middle Ages, when Christian armies fought to
regain the Holy Land from the Muslims. While the Crusades had ultimately failed,
they had opened new avenues for trade between the peoples of Europe and the Middle East . The
general growth of trade, in turn, had given the merchant a greater role in
society, had promoted the growth of a money economy, and had paved the way for
the downfall of feudalism. Another
cause, which also promoted the growth of trade, had been the age of
exploration. The travels of Marco Polo
in China had brought West
and East together, while the exploits of Christopher Columbus and other
Portuguese and Spanish Explorers introduced Europe to the New
World . The Renaissance,
which began in Italy ,
cleared away the smothering dominance of religious dogmatism and introduced a
new spirit of learning, which laid the foundation for scientific inquiry and
experimentation. This, in turn, led to
technological progress, particularly in Britain in the eighteenth century,
where James Watt invented the steam engine, and other British inventors
introduced mechanical means of production, such as the flying shuttle, the
spinning jenny, and the power loom, that would ultimately make the factory
system possible.
It was in
But when the industrial revolution
came to the United States of
America , in the nineteenth century, it took
on a distinctly American character. For
here was a young country, forged in the crucible of revolution, with a steely
determination inspired by its idealistic beginnings. Its boundaries were expanding, as the
strange, forbidding, sometimes terrifying, and often-hostile territories
yielded to the relentless push of the pioneer.
America
was creating its legend as it was living it, and its heroes, its own versions
of Gilgamesh, Moses, and Arthur, became figures who loomed larger than life
just decades after they lived, instead of centuries. The tales of Captain John Smith and
Pocahontas, of George Washington, Ben Franklin, and the Founding Fathers, of
Johnny Appleseed and Daniel Boone, along with mythical heroes such as Paul
Bunyan, illustrated the qualities of the emerging American hero: brave,
determined, inquisitive, ambitious, ready to take on Herculean tasks, who could
occasionally be relentless and uncompromising, but also gentle and
compassionate. This was a land of
striking contrasts: it’s people were the heirs to a centuries-old tradition of
European civilization, and yet they were forced to return, at times, to a near
primitive encounter with nature as they staked out a new livelihood. They were steeped in the ideals of a
fundamentalist, and generally tolerant religious outlook, committed to the
American experiment of democracy and political liberty, and proud of their
individualism, and yet were ruthless in their unyielding encroachment upon
native lands, and often indifferent to the plight of the African slave. And while they took pride in their country
and its new form of government, in their fervor to succeed, and to live out
their personal visions of success, they would often evade the law, usurp it, or
try to limit its reach. It was within
this culture of contrasts, in the wake of the industrial revolution, that a new
figure would rise to take his place in the pantheon of American legends: the
tycoon.
Cornelius Vanderbilt |
One of the earliest incarnations of
this new breed of American titan was Cornelius Vanderbilt. Born in Staten Island ,
New York in 1794, he embarked on his career at
the age of 16, when he created a ferry service to shuttle passengers and
freight between Staten Island and Manhattan . By his early twenties, he owned a fleet of
schooners, and in 1829 he bought his first steamship. Over the next two decades, his expanding line
of steamships, which he continually improved while aggressively undercutting
the rates of his competitors, made “Commodore” Vanderbilt an unrivaled
success. When the California Gold Rush hit
in 1849, he moved quickly to find his own treasure, in transporting prospectors
from east to west with his new land-and-sea line. Seeing the great promise and potential of the
railroad, he sold his steamboats in 1862, and within five years had acquired a
railroad company of his own, eventually establishing a direct rail route from New York to Chicago . This same pattern would play itself out in
the life story of John D. Rockefeller.
Born in Richford , New York in 1839, he also began his career
at the age of 16, as a bookkeeper. But
he would not remain in this relatively humble station for long. Within three years, he had purchased a
partnership in a small company, using savings that he’d accumulated during that
time. In 1862, the same year that
Cornelius Vanderbilt had hitched his star to the railroad, Rockefeller found
his own calling in oil. He partnered
with Sam Andrews, an inventor who had discovered a more efficient process for
refining crude petroleum, and eight years later, formed the Standard Oil
Company. Like Vanderbilt, Rockefeller
was driven by an ambition to excel, to dwarf his rivals through innovation and
aggressive business tactics, and he relentlessly sought out opportunities to
enhance his competitive advantage. But
this unbridled ambition often led him along dark and controversial paths. When he and his associates organized the
largest oil refiners in Cleveland
into the South Improvement Company in 1872, and then attempted to win for them
preferential treatment with the railroads, there was a public outcry against
the arrangement. The refiners eventually
yielded to this public opposition, but not before they had succeeded in buying
out most of their competitors.
Rockefeller himself was in control of 90% of all refineries in the
country by 1878. In 1882, he created the
Standard Oil Trust, the first of its kind in America , an organization that
behaved like a corporation, but, as a trust, placed itself above the laws that
traditionally governed corporations.
Here, at the summit of his career, Rockefeller had a virtual monopoly
over the oil industry, and to secure his domain, he had attempted to shield it
from the laws that might interfere with his sovereignty. The Ohio Supreme Court declared the trust
illegal in 1892. The empire of Standard
Oil would be dismembered, but its emperor would eventually retire a very
wealthy man. During his lifetime, his
personal fortune would nearly reach one billion dollars.
John Davison Rockefeller |
Although Andrew Carnegie, who came
to this country as an impoverished immigrant from Scotland , had much more humbler
beginnings than that of Vanderbilt and Rockefeller, his career would exhibit
all of the characteristics common to an American captain of industry. From a very early age, he exhibited drive,
initiative, and an untiring energy directed towards personal success. At the earliest opportunity, he sought to
become an entrepreneur, an organizer, and an owner, getting his income from
profits rather than from wages. And he
found his path to success through innovation, seeking out new processes,
inventions, and markets that would place him at the forefront of an
industry. When he established his niche
as a dominant figure, he ruled it as a virtual emperor, using aggressive
tactics to stifle or eliminate competition, and even trying to operate outside
of the laws and conventions that bound the common man. But at the pinnacle of his success, after
reaping profits of an unparalleled magnitude, he redirected much of his
energy to philanthropy, donating millions of dollars to charitable causes and
institutions. Carnegie, in fact, became
the archetype of the American business tycoon.
His story, more than those of any of his peers, illustrated both the
glory and the infamy of the robber baron.
Andrew Carnegie
Carnegie’s empire would reach its
pinnacle through the efforts of another man who would loom large in his legend,
Charles M. Schwab. Schwab had also had
humble beginnings – in fact, as a youth, he had once tended Carnegie’s
horses. But in 1881, he was working in
one of Carnegie’s companies as an engineer’s assistant, and by 1892 had risen
to the rank of general superintendent at the Carnegie steel plant in Homestead , Pennsylvania . On the evening of December 12, 1900, at a
dinner held in his honor, he would make history. In attendance were some of the leading members
of the New York
financial community, along with other prominent businessmen, including H. H.
Rogers, a close associate of John D. Rockefeller and president of the Standard
Oil Company. Seated to Schwab’s right
was one of the most eminent financiers of all, John Pierpont Morgan. At the end of the dinner, Schwab was invited
to give a speech. Standing before the
assembled audience of some of the most powerful men in America , he
began by saying that he could only talk about steel, because he was incapable
of talking about anything else. He spoke
for half an hour, and in his speech he shared a vision of the great potential
that lay unrealized within his industry.
Demand for steel was increasing, he said, and would continue to do
so. And while the Carnegie company had
succeeded, through its sheer size, in minimizing production costs, greater
reductions in prices were necessary to capture the world market. This could only be attained, he said, by more
integration, and the reduction of wasteful competition. New plants needed to be constructed, in more
favorable locations, and older, more obsolete and less favorably placed plants
abandoned. In a word, what was needed
was a single, national steel corporation, unlike any the world had ever seen, a
giant trust, coordinating the efforts of every production facility across the
country. It is said that when Schwab had
begun his speech, J. P. Morgan had picked up a cigar, preparing to light it for
an after-dinner smoke. When Schwab had
finished, Morgan was still holding the cigar but had never lit it, having been
mesmerized by what he’d heard. After the
cheers had subsided, J. P. Morgan pulled Schwab aside, to talk with him
privately. Three months later, the United States
Steel Corporation was formed, the largest industrial corporation in the world,
with a capitalization of over one billion dollars. The dinner which had led to its creation was
later described by a critic and historian as “one of those informal
parliaments” where “without the interference of police or senators the issues
of heavy industry could be faced peacefully and a balance of power
effected.” It was a stark demonstration
of the new realities of the industrial revolution, that in the modern age,
capitalists played a prominent role in the shaping of the welfare and destiny
of a nation, a role that rivaled or eclipsed the ones played by the leaders of
the church, the military, and even the state itself.
John Pierpont Morgan |
In addition to the steel industry
that he created, and his substantial charitable contributions, Carnegie left
one other, remarkable legacy. It began
with a visit from a young law student, who had found a job to support himself
through school by writing articles for a magazine on the rich and successful in
America . He was given an assignment to interview
Andrew Carnegie, and visited him at his office.
After a three-hour interview, Carnegie invited the young man to dinner
at his home, and it was here that he made a most unusual proposition. He told the young man that the world was in
need of a philosophy of success, a summary of the principles by which he and
others like him had accomplished great things, and amassed large fortunes. But, he continued, such a philosophy would
require twenty years of patient investigation, which would consist of interviewing
the most successful persons in the world.
If this young man were willing to take on such a momentous task,
Carnegie said, then he could provide him with letters of introduction to such
persons. But there was a condition. The writer would receive no compensation for
his work, no support of any kind beyond the letters of introduction. He would be expected to demonstrate the
effectiveness of the principles of success which he discovered by applying them
to himself.
The young writer, Napoleon Hill,
accepted the challenge. For the next
twenty years, he interviewed many of Carnegie’s peers in business, such as
Henry Ford, Charles Schwab, Harvey Firestone, and John D. Rockefeller, along
with great inventors such as Thomas Edison and Alexander Graham Bell, and the
American presidents Theodore Roosevelt, Woodrow Wilson, and William Howard
Taft. The philosophy that came out of
these endeavors has appeared and reappeared in books on personal development
and business success for nearly seventy years since the publication of Napoleon
Hill’s most influential book, Think and Grow Rich, and they have become
the staple of career counselors, success gurus, and motivational speakers to
this day. At the core of Napoleon Hill’s
success philosophy was a simple but powerful idea, that a person’s thoughts and
beliefs have a pervading influence, not just over the circumstances of his own
life, but over those of his fellow human beings, in ways that he cannot
conceive or imagine. Hence, to succeed,
one must have a clear objective and purpose, and a passion for obtaining that
objective which includes a willingness to sacrifice for it, along with a belief
that its attainment is possible. But the
power of an individual’s thoughts, Napoleon Hill contended, is multiplied many
times over when it is joined in a cooperative alliance with those of others who
work in a spirit of harmony to attain mutually desired goals. And, beyond this, there is an even greater
power, that Hill referred to as Infinite Intelligence, a type of universal
storehouse of Divine power and knowledge, which is available to all who develop
the capacity to open their minds to its influence. This philosophy, with its emphasis on
personal initiative, and teamwork, coupled with a reverential if somewhat
pragmatic acknowledgement of a higher power, had a modern, but distinctly
American, cast. In a world where the
science of evolution was challenging religious faith in the traditional ideas
of Creationism and Christian altruism, a recipe for success, for making oneself
a survivor in an increasingly competitive world, seemed to be a direct answer
to the prayer of modern man. But the
success philosophy of which this recipe was a part appealed to principles
characteristic of the classic American Protestant ethic, which extolled the
virtues of self-reliance and hard work.
It embodied the American dream, in which anybody could become a success,
if only he made himself worthy of it. And
yet, in spite of its emphasis on personal power and material reward, it still
made way for a higher power, although now this higher power was not some
supreme moral agent or lawgiver, but a power in a distinctly modern sense, a
source of energy and inspiration for those who knew how to utilize it.
But there was a dark side to this
new culture of ambition, symbolized by the nineteenth century American
tycoons. For in spite of their reliance
on invention, on new technologies, and on capital, a critical component in
their success continued to be labor. But
the modern laborer, consigned to working in the new factory system, often found
that he had little more rights and privileges than the ancient serf. In theory, he could negotiate his wages,
based upon the tried and true principles of supply and demand. In practice, however, he was often a hostage to
whatever particular industry dominated his local community, forced to work for
the wages that it offered, because there was no viable alternative. His only recourse was unionization, and
collective bargaining, a system that was viewed as pernicious and subversive by
the capitalists who ran his factories.
Carnegie was no exception, although
in public pronouncements he professed to support the right of his laborers to
organize. In an essay that he wrote in
1866, he said, “The right of working men to combine and to form trade unions is
no less sacred than the right of the manufacturer to enter into associations
and conferences with his fellows. . . . My experience has been that trade
unions upon the whole are beneficial both to labor and to capital.” But his actions provided a stark contrast to
his words. In the very next year, when
iron workers held a strike at one of his plants in Pittsburgh, he brought in foreign
workers to take their place, and in 1884, he used strikebreakers at a mill in
Beaver Falls, Pennsylvania, as he did over the next three years at the same
plant. But the most memorable conflict
with union workers occurred at his steel mills in Homestead , Pennsylvania ,
in 1892. At that time, their union, the
Amalgamated Association, had submitted modest demands, asking only for a
renewal of their existing contract.
Carnegie sent a stark message to Henry Clay Frick, chairman of the board
of directors of his operations, which read: “As the vast majority of our
employees are Non-Union, the Firm has decided that the minority must give place
to the majority. These works therefore
will be necessarily Non-Union after the expiration of the present
agreement.” Frick rejected the union
proposal, and insisted that wages be reduced.
The union attempted to compromise, proposing a more modest pay cut, but
Frick would not yield. On June 25, he
posted notices announcing that the company would henceforth bargain only with
individual workers, but not with the union.
What followed was one of the most momentous, and most tragic,
confrontations between labor and business in American history.
Henry Clay Frick
Pennsylvania State Militia Marching to the Homestead Strike |
But Carnegie, too, had paid a price
for his role in the Homestead
affair. He was roundly condemned by
clergymen, newspapermen, and politicians on both sides of the Atlantic . Shortly after the strike, The St. Louis
Dispatch wrote: “Three months ago Andrew Carnegie was a man to be envied. Today his is an object of mingled pity and
contempt. . . . Ten thousand ‘Carnegie Public Libraries’ would not compensate
the country for the direct and indirect evils resulting from the Homestead
Lockout.” The saga of Homestead , more than any other, exemplified
the paradox of the new American tycoon.
He was a creator of new industries, and of new jobs for thousands of employees. His successes literally rebuilt society,
creating a new infrastructure that supported a higher quality of life. And, after reaching the pinnacle of his
career, he was a great philanthropist as well, donating millions of dollars to
charitable causes, creating foundations dedicated to altruism, and founding
libraries, schools, and other public-spirited institutions. His life served as a model for a new American
archetype, the self-made man, exemplifying the spirit of individualism,
initiative, competitiveness, and the drive to succeed and rise to the top,
regardless of the circumstances of life that one is born into. But there was a dark side to this
archetype. American tycoons were
generally ruthless in their drive to succeed, employing questionable tactics to
stifle competition, if they didn’t attempt to buy out the competition
outright. They often shirked the law, as
well as unwritten codes of conduct and fair play, if these were perceived as
obstacles to their success. And their
ruthlessness was often directed not just against their competitors, but also
against their own employees, if these attempted to demand a fairer wage or
better working conditions through collective bargaining. In the shadows of their empires were the
wreckage of ruined lives – competitors driven out of business, and employees
blacklisted for demanding fairer treatment.
And when their empires began to fall, as they inevitably did, entire
cities and local economies became casualties in the wake of failed mills and
factories that once were focal points of economic life: Homestead ,
Pennsylvania , Flint ,
Michigan , and Gary , Indiana ,
among others.
The
Political Cartoon Featuring Teddy Roosevelt
The age of industrialism, in America , had
been an age of giants. While the
accomplishments of these captains of industry were impressive in their own
right, as they literally transformed the face of the American landscape, the
men themselves provided an inspiring example that was especially suited to this
young nation of immigrants. For many of
them, if not immigrants themselves, came from humble backgrounds, and yet,
through their own initiative, dedication, and uncompromising zeal, had risen to
the very pinnacle of success, and exercised power in society that in centuries
past had been limited to monarchs, popes, and noblemen. And their achievements, in the nineteenth
century, seemed to provide a tangible demonstration of the principles embodied
in a new science that had risen to prominence in their day: Darwin ’s theory of evolution. For there was no better reflection, in human
society, of the principle of natural selection, as in the domination of a
successful businessman over his competitors.
Tangible rewards awaited the brightest, the most tenacious, and the most
industrious. This was social Darwinism,
to be sure, and yet, this American version was a characteristically democratic
one. As it was later embodied in the
teachings of Napoleon Hill, success was available to anyone who was willing to
exercise the commitment to attain it.
But this egalitarian philosophy of success had a dark side. For inherent in its presumption that anybody
could be a success, was the implication that those who were homeless, poor, or
even oppressed had only themselves to blame.
It suggested that the beggar on the street, the business failure, or the
laborer in a steel mill who worked 12 hours a day, seven days a week, often in
hazardous conditions, could change the unhappy circumstances of their lives, if
only they tried. It was this philosophy
that accounted for the paradoxical behavior of Carnegie and his fellow tycoons:
men who could be immensely generous philanthropists, while at the same time
being ruthless competitors and unforgiving employers. And similar ideas have created an enduring
vein of callousness and insensitivity to the plight of the less advantaged that
has survived in the American consciousness to this day. But in Europe ,
at the dawn of the twentieth century, social Darwinism would take an even
darker turn. Here, in the writings of
radical intellectuals, the superman would have not only an indomitable personal
freedom, stronger spirit, and contempt for the weak, but also a racial
pedigree. As the promise of the new
century began to fail, betrayed by a devastating, pointless world war, many
would embrace this darker ideal of the superman, as part of a desperate attempt
to restore a sense of personal pride, in the face of a hostile world that had
lost its bearings. Others would find a
sense of purpose in equally hollow ideologies.
And at the heads of these were false prophets, demagogues, and tyrants,
who would eclipse, in their tyrannies, the greedy acts of any American robber
baron, and who would leave in their wake a toll of oppression, murder, and
destruction unrivalled by any other age in human history.
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