Generosity on an Industrial Scale: Andrew Carnegie’s Charitable Giving

Long before Bill Gates and Elon Musk, there was a Scotsman, born in the county of Fife in 1835. His parents were poor and they emigrated to the United States in 1848, bringing him along and looking for economic opportunities and upward social mobility. His name was Andrew Carnegie.

He started working in the telegraph business, then for railroad companies, and finally in the steel industry. From bitter poverty, he worked with focus and developed his mind, and eventually became one of the wealthiest men on earth. How much money did he have? The answer is not entirely clear. Naturally, his exact net worth varied over the years. Any dollar amount given would have to be adjusted for more than a century’s worth of inflation. Any figure ventured would be preceded by the word ‘approximately’ and qualified with the phrase ‘at least’ because such reckonings cannot be precise.

At various points, his net worth was at least approximately $500 million, and it could have easily been double that. Adjusted to dollar amounts in the year 2026, that would be roughly $20 billion.

These numbers are minimums. Depending on which assets are counted, and how they are counted, even tripling those figures might be possible.

Was Carnegie the “richest” man in the world? Again, it is difficult to give a precise answer. At the time, there were empires, and the dynasties who ruled them counted vast amounts of land and palaces as personal property. There might have been emperors — in Russia, China, Germany, Austria, or Britain — who were worth more on paper. Carnegie was probably the richest businessman in the world.

The newspapers of the first two decades of the twentieth century sometimes referred to Carnegie as “the world’s richest man.” Yet when he died in 1919, he made sure that he was no longer qualified for this title. “Carnegie, who acquired” the reputation of being the world’s richest man “in 1901, when he sold his Pennsylvania steel empire to rival J.P. Morgan for the then-unimaginable sum of $480 million, had spent many of the intervening years giving away his fortune,” writes historian Les Standiford.

Andrew Carnegie gave away hundreds of millions of dollars.

The amount of money he had at one point in time was amazing. Equally amazing was the amount he gave away, so that by the time he died, his net worth was not even a tenth of what it had been.

In addition to the funding of some 2,800 public libraries across the United States and as far away as Fiji and New Zealand, he had endowed the Carnegie Institute of Technology in his adopted hometown of Pittsburgh, Pennsylvania, the Carnegie Research Institution in Washington, D.C., and the Carnegie Educational Foundation in New York City, as well as the Endowment for International Peace. This last endowment was, in the final decade of his life, the cornerstone of his attempts to sway the nations of the world from their fixation upon war as a solution to political problems.

Carnegie’s efforts to secure world peace would cost nearly $25 million ($5.5 billion today), but that was a pittance compared to all his giving.

Les Standiford wrote the paragraph above in 2005. By 2026, the number would be even greater.

Carnegie was personally involved in his institutional donations. He did not delegate these decisions. The cities of Braddock and Homestead in Pennsylvania, separated only by a river, were of special interest to him.

“At the 1889 dedication of the beautifully designed Braddock Public Library — a sprawling sandstone structure more aptly described as a community center, complete with auditorium, swimming pool, and spacious reading rooms — Andrew Carnegie had capped the ceremonies” by giving a brief speech by referring to himself as one “of those who labor and perform a use in the community.” He saw himself as serving society.

Directly across the Monongahela River from the city of Braddock was the city of Homestead. Carnegie owned production facilities in both towns. His relationship to the large workforces in those two towns had not always been the friendliest, yet he chose to give to these communities, as Les Standiford reports:

Carnegie finally built a library for the workers of Homestead in 1898, an even grander sandstone monument than its counterpart across the river in Braddock. The building, complete with pool, auditorium, and lofty reading rooms, still stands.

He also made gifts to towns in which he had no direct business interests. He gave to towns around the world. He was looking for opportunities to make a difference.

One of Carnegie’s libraries went up in the blue-collar hill town of Cambridge, Ohio, shortly after the turn of the century. It wasn’t on the scale of those virtual palaces in Braddock and Homestead; the library grants were tied to the size of the population, and Cambridge was an unprepossessing town of a few thousand souls.

The building seemed extravagant in such a town, and became a point of local pride.

The building seemed grand. The staircases were broad and made of marble, the ceilings were high, the walls paneled in wood.

Prior to his retirement from the business world in 1901, Carnegie had engaged in generous charitable giving. After retirement, his efforts in this direction increased significantly, and he spent a great deal of time funding projects to help society.

By all appearances, the principal occupation of “the richest man in the world” from the moment of his retirement was giving all his money away.

While he had long been building libraries around the nation and the world, and had, as early as 1892, provided $2 million to build Carnegie Hall (originally named the New York City Music Hall), the “wee Andra” now threw himself into philanthropic activity with a zeal.

In the Scottish speech of Carnegie’s childhood, “wee Andra” would be equivalent to “little Andy” in American English. His $2,000,000 donation in 1892 would be approximately $71,820,879 in 2026 dollars. One of his more famous comments was: “The man who dies rich, dies disgraced.”

Although entire volumes have been written on Carnegie’s philanthropy and on individual Carnegie foundations, a thumbnail overview might convey just how much $327 million can accomplish:

The endowment of nearly three thousand public library buildings around the world accounted for some $60 million of his total giving.

The reader will notice that the math of trying to express the size of Carnegie’s various projects in 2026 dollars is not entirely consistent in the examples here given. This is because various historians and economists reckon differently. These numbers are best understood as impressions.

It’s worth noting that some of the public buildings that Carnegie funded took on his name only after his death. While he was alive, he gave many of these institutions names which did not include any reference to him. Many of these buildings never took on his name, and so he remains effectively an anonymous donor to this day, e.g., in the case of local libraries.

Few acts of philanthropy have enjoyed such universal, enduring recognition; nearly a thousand of the buildings are still in use as libraries to this day, more than thirty in the boroughs of New York City alone.

Likewise, houses of worship contain valuable musical instruments with no obvious reference to the Carnegie name. While Carnegie was religious and spiritual, he was not exceptionally enthusiastic about organized religion. For most of his life, he was a member of the Presbyterian church, but was not much involved beyond sporadic Sunday morning attendance. He was personally friends with several of the church’s pastors, and donated generously to the church.

Despite his complicated relationship with organized religion, he funded the construction and installation of approximately 7,000 pipe organs in various churches, as Les Standiford writes:

Even more ubiquitous than his libraries were the organs he had given to churches. This was a program that had begun almost by accident, after Carnegie gave an organ to a church in Allegheny City, his first American home. Before it was over, Carnegie, an agnostic who said he continued the practice because it “lessened the pain of the sermons,” had given away nearly eight thousand organs, at a cost of over $6 million.

Keeping his eyes open for projects, he encountered many of them serendipitously. This accounts for the broad range of interest areas: from libraries to churches to education.

“In 1902, he” donated “$32 million to endow the Carnegie Institution of Washington, a still-extant think tank for advanced research in the sciences,” writes Les Standiford.

Carnegie had a deep attachment to the United States, but also to the country of his birth, and was happy to fund projects in both places.

At about the same time, he established the Carnegie Trust for the Universities of Scotland with a gift of $10 million.

One library in particular became the seed for a much larger project:

In 1895, Carnegie dedicated the Carnegie Library of Pittsburgh, an imposing, 300-foot-long structure made possible by a grant of $1 million. By the turn of the twentieth century, the library had become the centerpiece of the still-standing Carnegie Institute, a monument to culture that included art and science museums and a concert hall. Ultimately, Carnegie’s original $1 million investment would grow to more than $25 million.

At a Pittsburgh dinner in late 1900, Carnegie announced that he was offering the city a $1 million endowment to build a technical school as an adjunct to the Institute. He would later add another $6.5 million. First called the Carnegie Technical Schools, then the Carnegie Institute of Technology, it was merged in 1967 with the Mellon Institute of Industrial Research (founded by Andrew Mellon in 1913) and is known today as Carnegie Mellon University.

Constantly making connections to various non-profit schemes, he seems to have worked as hard in giving away his money as he did in earning it in the first place.

Another major gift to education came in 1905, when Carnegie, prompted by a visit to Skibo from Henry Pritchett, the president of MIT, gave $15 million to create the Carnegie Foundation for the Advancement of Teaching. The foundation went on to found such programs as the Teachers Insurance and Annuity Association and the Educational Testing Service. It still operates worldwide.

In 1911, somewhat overwhelmed by the task of giving away money, he made his single greatest gift, endowing the Carnegie Corporation of New York, formed for “the advancement and diffusion of knowledge,” with $125 million. The corporation was to oversee many of the projects already undertaken, as well as to create a board of trustees that would assume the burden of determining worthy recipients for the remainder of Carnegie’s fortune, which totaled about $180 million. Today the Carnegie Corporation’s endowment is valued at about $1.8 billion and continues its work in teacher education, and increased participation of the citizenry in the political process.

Carnegie’s gifts supported a wide range of projects, many still in operation, including the Carnegie Hero Fund ($5 million), designed in 1904 to recognize extraordinary acts of peacetime bravery and compensate those injured while performing those acts of heroism.

Over a century later, Carnegie’s cash is still at work. The libraries are still operating in towns around America and in towns around the world; the organs still playing hymns on Sunday mornings; the university buildings still standing and the university endowments still funding educations; the peace institutes still orchestrating diplomatic meetings.

Such creations as the Hero Fund continue to affect the lives of citizens worldwide (the fund made a significant number of awards in the wake of the September 11 tragedy).

Like many people of his time, Andrew Carnegie saw WW1 approaching. The competitions and tensions between the European powers clearly were nudging that continent toward war.

He hoped to fund diplomatic efforts to diffuse tensions and avoid wars.

In all his record of giving, however, nothing came to engage Carnegie more deeply than his quest to put an end to war between nations. Though it may be commonplace today for a schoolchild to begin an essay with a heartfelt desire “to achieve world peace,” for Carnegie, it was no mere wish upon a star.

Carnegie’s efforts to find diplomatic solutions to international conflicts lifted The Hague from being a national capital to a global ambassadorial meeting place and the seat of international justice. Les Standiford explains:

Carnegie delivered a blistering speech early in the century at New York’s Metropolitan Club, where he denounced war as the “foulest blot upon humanity today.” He questioned just how far civilization could be said to have progressed, “as long as we can find no better substitute for the settling of international disputes than the brutal murder of one another.

One of the immediate results was the endowment of an international law library and center for the arbitration of disputes between nations at The Hague, site of an 1899 conference on world peace. Though he was at first hesitant about usurping the business of nations, Carnegie ultimately gave $1.5 million for the construction of the International Peace Palace and the establishment of the Permanent Court of Arbitration.

In 1910, heartened by President Taft’s resolve to ensure his own legacy as a peacemaker among nations, and disturbed by growing tensions in Europe, Carnegie approached Taft with the idea of endowing a private organization to support the president’s agenda. After consulting with Taft and his secretary of state (and former Carnegie Company attorney), Philander C. Knox, Carnegie made his proposal. In return for Taft’s efforts to secure a network of peace treaties between the United States and other major powers Carnegie would contribute $10 million to endow the Carnegie Endowment for International Peace, “to a thorough and scientific investigation and study of the causes of war and of practice methods to prevent and avoid it.”

Andrew Carnegie decisively shaped many features of our world today, and he did so not seeking power, fame, money, or self-aggrandizement, but seeking rather to rid himself of his huge fortune and make the world a better place.

The Administrative State vs. Constitutional Freedom

One of several continuous threads which run through the history of the United States from 1789 onward is the question of how to preserve the constitutional system of the “checks and balances” by means of the “separation of powers” as embodied in the judicial, legislative, and executive branches. This much should be familiar to any student of history or civics.

Preserving this constitutional system amounts to preserving the human rights, civil rights, and civil liberties which it was instituted to protect. The task of preserving this system often takes the form of asking whether each of the three branches is performing its tasks and avoiding the tasks assigned to the other branches.

A branch of government is negligent if it fails to perform its assigned tasks; it is usurpative if it performs tasks assigned to other branches.

It is therefore necessary, not only to limit the power of government as a whole, but rather also to limit within the government power of each part.

Opposing this constitutional system are those who embrace the idea of an administrative state. These two views compete: on the one hand, a central bureaucracy which makes laws and collects taxes apart from a freely-elected representative legislature; on the other hand, a decentralized system, in which federal and local governments each have separate assigned powers, which avoids permanent bureaucracy and standardized administration.

The administrative state comes into conflict with constitutional rights when the agencies of the executive branch make laws and collect taxes, usurping the role of the legislative branch. This leaves the citizens at the mercy of unelected agencies who do not represent the voters, but rather impose on the voters.

The need for limited government arises from the same source as the need for separation of powers: from human nature. The goal in the creation of such systems is to prevent situations in which individuals or groups have positions of great power, because sooner or later they will fall to the temptation to use that power in ways which do not represent the desires and thoughts of the voters, as John Marini writes:

James Madison wrote in The Federalist Papers that factionalism is “sown in the nature of man”; thus there will always be political conflict — which at its starkest is a conflict between justice, the highest human aspiration concerning politics, and its opposite, tyranny. This conflict between justice and tyranny occurs in every political order, the Founders believed, because it occurs in every human soul. It is human nature itself, therefore, that makes it necessary to place limits on the power of government.

President Woodrow Wilson wanted to take some of the budgetary powers assigned to the legislative branch. To this end, he proposed legislation which would reassign those powers to the executive branch. He vetoed the first version of this in 1920, because he thought that it did not give enough power to the president. A revised version, giving that power to the president, was passed by Congress in 1921 under the title “The General Accounting Act of 1921” and signed into law by President Warren Harding.

The passage of this bill was part of the progressive political agenda — Wilson was a leader in the progressive movement — and did damage to the constitutional system. Ironically, the anti-progressive Harding was the one who signed it into law. It will be left as an exercise for the reader to discover why Harding signed it.

The progressive vision was that government should control, rather than be controlled, as John Marini explains:

Progressive leaders were openly hostile to the Constitution not only because it placed limits on government, but because it provided almost no role for the federal government in the area of administration. The separation of powers of government into three branches — the executive, the legislative, and the judicial — inhibited the creation of a unified will and made it impossible to establish a technical administrative apparatus to carry out that will. Determined to overcome this separation, one of the chief reforms promoted by early Progressives was an executive budget system — a budget that would allow Progressive presidents to pursue the will of a national majority and establish a non-partisan bureaucracy to carry it out. Congress was initially reluctant to give presidents the authority to formulate budgets, partly because it infringed on Congress’s constitutional prerogative — but also because it was still understood at the time that the separation of powers stood as a barrier to tyranny and as a protection of individual freedom. Eventually, however, Congress’s resistance weakened.

When laws are made by the executive branch instead of by the legislative branch, they are unconstitutional and therefore illegitimate. In an attempt to hide this fact, many such laws, made by unelected officials in federal agencies, are labeled as “rules” or “regulations” instead of laws. When agencies impose penalties on those who violate such regulations, the agencies are usurping the role of the judicial branch, and such trials and their verdicts and sentences are therefore also unconstitutional and illegitimate. When these agencies collect taxes, which are labeled as “user fees” or other similar misleading phrases, they are usurping Congress’s exclusive right to levy taxes. Despite the attempt to label them as something other than taxes, they are in fact taxes, and are illegitimate and unconstitutional because again the executive branch has stolen the role of the legislative branch.

To defend this violation of the principle of the separation of powers, substantial mental gymnastics are required, as Philip Hamburger notes:

The Constitution authorizes three types of power, as we all learned in school — the legislative power is located in Congress, executive power is located in the president and his subordinates, and the judicial power is located in the courts. How does administrative power fit into that arrangement?

The answer is that laws, even when they are called ‘regulations’ and ‘rules’ or other technical words, are to be produced by the legislative branch, not the executive branch. ‘User fees’ are taxes and are therefore to be levied only by the legislative branch. ‘Hearnings’ which are trials are to be conducted only by the judicial branch, and ‘fines’ which are rulings are to be declared only by the judicial branch.

Administrative power as a standalone concept is neither constitutional nor legitimate.

Pinpointing the precise moment at which ‘administrative law’ began is difficult, but in any case, it is at least more than a century old. The concept of administrative law is entrenched and ossified, even though plainly corrupt and usurpatory.

Most often, the alleged need for administrative law is introduced as a practical necessity. It is practical and necessary only if one wishes to increase the power of government — and when government power increases, individual freedom decreases. The principle of limited government is intended to prevent the government from becoming an efficient manager or a practical regulator.

Citizens don’t want to be managed or regulated. Citizens elect representatives, not rulers. Those in government are to represent the ideas and desires of the citizens.

One of the several benefits of the separation of powers, and of checks and balances, is gridlock. Gridlock is a benefit and an asset. It prevents the government from becoming too adept at imposing control on citizens. One of the goals of the constitutional system is to maximize personal freedom and individual political liberty.

The progressive movement casts itself as modern, and therefore its opponents as reactionary and retrograde. This is, however, merely a verbal flourish, as Philip Hamburger writes:

The conventional answer to this question is based on the claim of the modernity of administrative law. Administrative law, this argument usually goes, began in 1887 when Congress created the Interstate Commerce Commission, and it expanded decade by decade as Congress created more such agencies. A variant of this account suggests that administrative law is actually a little bit older — that it began to develop in the early practices of the federal government of the United States. But whether it began in the 1790s or in the 1880s, administrative law according to this account is a post-1789 development and — this is the key point — it arose as a pragmatic and necessary response to new and complex practical problems in American life. The pragmatic and necessitous character of this development is almost a mantra — and of course if looked at that way, opposition to administrative law is anti-modern and quixotic.

Although the progressives presented the idea of an administrative state, or a managerial state, as something modern, it was in fact a step backward in time, to the governments of kings like Frederick the Great, who were called ‘enlightened despots’ and ‘enlightened absolutists’ because they considered themselves to be wise and therefore entitled to enforce upon their subjects whichever regulations occurred to them.

What is truly modern is a limited government, which regards freedom as the property of each human being. This replaces the monarchist view which regards the right to rule as the inherited family property of one ruler.

Although reason and justice are violated when one branch of the government seizes the powers assigned to another branch, reason and justice are equally violated when one branch of government is negligent and fails to carry out its assigned role. It is an illegitimate government when the executive takes on the legislative task; it is equally illegitimate when the legislative branch fails to legislate, as Christopher DeMuth writes:

Part of the shift has resulted from presidents, executive agencies, and courts seizing congressional prerogatives.

If it is a crime when a president steals Congress’s authority, then it is equally a crime when Congress fails to embrace its own authority; Christopher DeMuth continues:

But the most important part of the story has an opposite plot: Congress itself, despite its complaints about executive and judicial poaching, has been giving up its constitutional powers voluntarily and proactively.

It is a crime when the legislative branch fails to legislate; it is equally a crime when the Congress fails to organize taxation and outlays:

Congress has even handed off its constitutional crown jewels — its exclusive powers, assigned in Article I, Sections 8 and 9, to determine federal taxing and spending.

The details of the Constitution were crafted to keep the government bogged down in its own sluggishness — checks and balances countering each other, negotiating agreements between the branches of government — so that the government could not be efficient or effective in its regulation of human beings. If one of the purposes of government — indeed, the main purpose of government — is to protect individual freedom, then government should not be curtailing freedom.