Come 1900 Carnegie was earning profits on the average of $40 million a year from his steel company, nearly equaling its supposed net worth. The very next year at a dinner party, Carnegie met with one of his competitors, J.P. Morgan. It was there that the 64-year-old Carnegie agreed to sell his steel company to the railroad tycoon and financier for $480 million, the amount written on a simple piece of paper. Upon finalizing the deal, Morgan told Carnegie that "you are now the richest man in America."4
Andrew Carnegie spent the remainder of his life investing his fortune in philanthropy, building 2,800 public libraries and greatly supporting colleges and universities. In 1902 he endowed the Carnegie Institution for research, and in 1905 and 1911 he established the Carnegie Institution for the Advancement of Teaching and the Carnegie Corporation, respectively. It is estimated that Andrew Carnegie gave over $350 million away in philanthropic pursuits by the time he died.5
And this is the typical story told in Internet biographies, high school history textbooks, and other mainstream media. There is no disputing that Carnegie was a great businessman, emerging as one of the few true "rags-to-riches" icons in American capitalism. His contributions to American industry were unparalleled by any of his contemporaries. And from this perspective, Andrew Carnegie was truly a great man deserved of hero status.
But with all men, with all history, there is another side. Carnegie is no exception, though many who come close to deifying him wouldn't want to mention that other side. His quest to make his steel cheap and affordable, thus the key to making profits, adversely affected Carnegie's workers. Cheaper steel invariably meant lower wages and more dangerous working conditions, as efficiency trumped safety in Carnegie's mills. Further, Andrew Carnegie's quest to reduce labor costs by investing in mechanization put people's jobs in jeopardy. And because Carnegie was heavily anti-union, the job security of his laborers was always at great risk.6
Under Carnegie, workers within the steel company routinely worked seven days a week, twelve hours a day. Carnegie gave his laborers but one holiday off a year, July 4. Working conditions were dangerous and sometimes deadly, many workers labored with no breaks, and the average pay in for the common unskilled laborer in the Carnegie Steel Company was just above $500 a year, averaging $10 a day, often just $.14 an hour in place like Homestead, Pennsylvania. And it was what happened in Homestead in 1892 where the nature of Carnegie's business formula is best illustrated.7
