Who believed wealthy Americans should use their wealth to help people help themselves?

There was a time in U.S. history when the business magnates and titans of industry boasted more wealth than even today’s top technology innovators and visionaries.

During America’s Gilded Age — which spanned most of the latter half of the 19th century, from around 1870 to 1900 — the inflation-adjusted wealth and impact of America’s most towering figures far overshadowed what we see today.

The wealth of people like John D. Rockefeller, Cornelius Vanderbilt, Henry Ford, and Andrew Carnegie would by today’s standards be measured in the hundreds of billions of dollars — far more than tech giants like Elon Musk, Bill Gates, Mark Zuckerberg, and even Jeff Bezos, the wealthiest individual in the world as of 2019.

Wealth so vast can often highlight the financial inequality of an era. It’s this idea of grandeur in the face of unresolved social concerns that led Mark Twain to coin the phrase “Gilded Age” in his 1873 novel The Gilded Age: A Tale of Today. The title suggested that the thin veneer of wealth for the elite masked broader issues for many in the lower and middle classes.

But the progress made in the United States during the Gilded Age can’t be denied. As part of the Second Industrial Revolution, the country underwent an impressive economic expansion — led by the day’s larger-than-life figures of wealth and power. Much of this growth was courtesy of railroads — which now spanned from coast to coast — as well as factories, steel, and the coal mining industry.

Big business boomed, with technology such as typewriters, cash registers, and adding machines helping to transform how people worked. And the economic explosion included not only industrial growth, but also a growth in agricultural technology such as mechanical reapers.

In a time of such great expansion and fewer regulations surrounding wealth and business practices, circumstances were perfect for the rise of a class of extremely wealthy individuals who made up a very small percentage of society. They had the power and means to create opportunities and jobs for the many, though with less social prioritization on workers’ rights, issues like discrimination, exploitation, and low wages marked the era.

Still, it’s impossible to overstate the impact these individuals had on America’s development. With technology booming and immigrants flocking to the United States seeking better opportunities for themselves and their families, they left their mark on the United States — and on history.

Captains of Industry and Robber Barons

The wealthy elite of the late 19th century consisted of industrialists who amassed their fortunes as so-called robber barons and captains of industry. Both can be defined as business tycoons, but there was a significant difference in the way they made their fortunes.

The term “robber baron” dates back to the Middle Ages and carries a negative connotation. Robber barons typically employed ethically questionable methods to eliminate their competition and develop a monopoly in their industry. Often, they had little empathy for workers.

Captains of industry, however, were often philanthropists. They made their wealth — and used it — in a way that would benefit society, such as providing more jobs or increasing productivity.

John D. Rockefeller

Born in 1837, John D. Rockefeller became one of the richest men in the world as the founder of the Standard Oil Company. In 2018 dollars, Rockefeller’s net worth is said to eclipse $400 billion — nearly three times the 2018 estimated net worth of Jeff Bezos, the founder of Amazon.com and the wealthiest individual in the world.

Standard Oil dominated the oil industry, controlling roughly 90% of the refineries and pipelines in the United States by the early part of the 1880s.

While he has faced some criticism historically for how he accumulated his wealth, Rockefeller’s charitable efforts paint him as a philanthropic captain of industry. Over the course of his life, his donations to charitable causes exceeded $500 million (unadjusted for inflation).

Andrew Carnegie

Andrew Carnegie served as a great example of an American rags-to-riches story. Born to a poor Scottish family, he and his parents immigrated to the U.S. when he was 13. He built his fortune by investing in the steel industry and became the owner of Carnegie Steel Company, which by 1889 was the largest steel company in the world.

Despite some criticism of how some workers at Carnegie Steel were treated, Carnegie himself was extremely active in terms of philanthropy. In his efforts to contribute to society, he established the Carnegie Endowment for International Peace, the New York Public Library, and a college that would become part of Carnegie Mellon University.

He also wrote “The Gospel of Wealth,” an article that argued that the wealthy have a responsibility to contribute to the greater good of society.

J.P. Morgan

John Pierpont Morgan was a financier from a wealthy family and is considered by many to have been among the robber barons during America’s Gilded Age.

At face value, Morgan contributed greatly to American industry. He invested in Thomas Edison and the Edison Electricity Company; helped to create General Electric and International Harvester; formed J.P. Morgan & Company; and gained control of half of the country’s railroad mileage. He also created the first billion-dollar company, U.S. Steel. At one point in his life, he was a board member of as many as 48 corporations.

However, Morgan engaged in some unethical and anticompetitive practices to ward off competition. For example, he was believed to head a money trust that controlled the banking industry and was commonly considered a figurehead of Wall Street. He also created a monopoly by slashing the workforce and their pay to maximize profits while eliminating the competition. Workers’ wages were often as low as a dollar a day or less, and conditions for employees were poor, with increased fatalities even as wages grew.

When confronted with the possibility of regulations that could threaten his bottom line, he and other robber barons of the time contributed money to ensure that a business-friendly presidential candidate, William McKinley, was elected in 1896.

Despite the numerous negatives associated with how Morgan built his wealth, some of his actions did benefit the United States and society. For example, his wealth was so vast that he was able to help bail out the federal government twice during an economic crisis, first in 1895 and again in 1907.

Henry Ford

Automaker Henry Ford was a captain of industry who is considered to have treated his workers well. He believed that well-paid workers would be happier and more efficient. For that reason, he instituted a $5-a-day pay rate, which was twice as much as other auto manufacturers paid.

In addition, during a time when workers were required to work 10 hours a day, six days a week, Ford scheduled his workers for eight-hour days, five days a week.

Ford was known to be generous with his wealth in terms of charitable contributions. He donated personal funds to organizations that he created, such as the Henry Ford Hospital for the working poor who could afford to pay only some of the cost of their medical care. Over the course of his life, he donated approximately $14 million to this institution.

Other organizations created by Ford included the 80-acre Valley Farm for orphaned boys; a school for African American children in Georgia; and a Detroit trade school. He also paid for work camps for boys during the Great Depression.

In addition to his charitable efforts, Ford was a known pacifist. He was part of a peace ship to Europe that hoped to put an end to World War I.

The AP® United States History exam covers hundreds of topics, all of which you need to be familiar with in order to get a high score. This might sound impossible, but success on the APUSH test is really all about studying smarter. The most vital things to review about a particular event, policy, or movement are the answers to the following questions: What is it? What else was happening at the time? Why is the Gospel of Wealth important to United States history?

In this AP® US History crash course, we will give you the answers to all these questions about one frequently-tested topic: the Gospel of Wealth.

The Gospel of Wealth: What is It?

The term “gospel of wealth” refers to the 1889 article of the same name by Scottish immigrant Andrew Carnegie. Carnegie became the second-richest man in American history (after John D. Rockefeller) by dominating the growing steel industry.

In “The Gospel of Wealth,” Carnegie argued that extremely wealthy Americans like himself had a responsibility to spend their money in order to benefit the greater good. In other words, the richest Americans should actively engage in philanthropy and charity in order to close the widening gap between rich and poor.

Carnegie explained that the common trend of leaving all of one’s money to their heirs was disgraceful, and that instead the wealthy should use their money to benefit society while they were still alive. He embodied this philosophy thoroughly, giving away about 90% of his wealth during his lifetime. One of his main channels of wealth into the public was the creation of Carnegie libraries. These buildings were simply modeled,but provided the public with the tools they needed to expand their own knowledge, skills, and suitability in society.

Historical Context

Cultural and economic context is especially important to understanding the Gospel of Wealth for the AP® US History exam. There are three main concepts that help contextualize Andrew Carnegie’s work: the Gilded Age, industrialization, and Social Darwinism.

The Gilded Age

The Gilded Age is the period of United States history spanning roughly the 1870’s until 1900 (It is important to understand different time periods on the APUSH test, so make sure you know this). The name was coined by author Mark Twain, and refers to the glamourized “gilded” layer of wealth that tried to hide America’s serious social problems.

The Gilded Age was an era of rapid economic growth. At this time, wealthy “captains of industry” and “robber barons” manipulated the growing steel, railroad, and gold markets and became astronomically rich. However, despite the economic growth and illusion of Americans becoming wealthier, serious labor problems arose, and society was cut through with corruption. The visibility of the extremely wealthy created an image of a thriving United States painted in gold, but looking beyond the surface revealed a state of social chaos and exploitation of the working class.

Industrialization

The Second Industrial Revolution, beginning between 1840 and 1860 and continuing until World War I, created a rapidly growing set of industries in America including steel, rail, and coal mining. The growth of factories changed the dynamic of the American work force and created a need for the rise of labor unions and other forms of organized labor. For the first time, the need for skilled labor decreased as the popularity of unskilled factory work soared. However, jobs were created for both skilled and unskilled workers, and the wages of both groups grew. A new middle class began to form, but nevertheless the gap between the rich and poor was enormous.

Andrew Carnegie played a key role in the industrialization of America as he dominated the steel industry. The wealth he gained from his work and the images of the gap between rich and poor inspired him to sell his steel company to financier JP Morgan and devote his life to philanthropy.

Social Darwinism

In the Gospel of Wealth, Carnegie describes the wealthy as being especially skilled, intelligent, and prepared with the tools needed to responsibly and efficiently distribute money. This idea implies that poverty is a kind of character flaw of those Americans who are less hardworking.

This argument draws on a popular idea of the time known as Social Darwinism. This societal theory from the 1870’s argues that the economically “strong” (in other words, the very wealthy) will rise to positions of power while the “weak” (the poor) will occupy the lowest, least powerful positions in society. Many Social Darwinists embraces laissez-faire capitalism, in which there is unregulated economic competition among individuals, much like Charles Darwin’s theory of biological competition that leads to evolution. 

Why is the Gospel of Wealth Important?

Andrew Carnegie’s philosophy embodied the incredible wealth of a handful of individuals in the Gilded Age, and influenced many other captains of industry in their own philanthropy, including John D. Rockefeller. His charitable legacy continues into the present day, with hundreds of Carnegie libraries still operating and the Carnegie Foundation still distributing the family’s wealth.

However, despite the benefits of Carnegie’s philanthropy, the Gospel of Wealth had some setbacks. Some captains of industry used the theory to excuse their own massive accumulation of wealth, and to, in a sense, make themselves feel better about being so far “above” the poor and middle classes.

What You Need to Know for the APUSH Exam – Multiple Choice

The multiple choice section of the AP® US History exam will ask you more fact-based questions, unlike the APUSH DBQ and FRQs that are broader. For questions about the gospel of wealth, you should be familiar with the key figures, especially Andrew Carnegie. Be familiar with other “captains of industry” such as John D. Rockefeller and Cornelius Vanderbilt. You should know that the theory emphasized distribution of wealth while one was still alive, as opposed to bequests in one’s will either to his heirs or in donations after his death.

What You Need to Know for the APUSH Exam – Essays and Document Based Questions

The written section of the AP® US History exam will ask more concept and connection-based questions. Many AP® US History DBQs and FRQs ask about the Gilded Age and its key players, like Andrew Carnegie. You should be able to connect the Gospel of Wealth and Andrew Carnegie to the broader characteristics of the Gilded Age. You should also be able to contrast the experiences of the very wealthy against those of the growing industrial classes.

Several AP® US History free response questions in previous years have asked about the Gilded Age. For example, a recent essay question asked:

“Explain how TWO of the following individuals responded to the economic and social problems created by industrialization during the late nineteenth and early twentieth centuries. Jane Addams, Andrew Carnegie, Samuel Gompers, Upton Sinclair”

In this FRQ, you could discuss the value that Andrew Carnegie placed on philanthropy in order to solve the massive social problems created by industrialization and the widening of the socioeconomic gap. Then, you could compare Carnegie’s ideas to those of Samuel Gompers, president of the American Federation of Labor, who played a more active and personal role in labor reform. Gompers encouraged the “defeat” of the wealthy (like Andrew Carnegie himself), whom he called the “enemies” of everyday workers.

With this AP® US History crash course in hand, you have all the tools you need to master questions about the Gospel of Wealth on the exam. If you can make the connections between Andrew Carnegie’s ideas and the rapidly changing America during the Gilded Age, you’ll be well on your way to a 5 on exam day.

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