Andrew Carnegie And The Rise Of Big Business Summary

Harold C. Livesay

Andrew Carnegie And The Rise Of Big Business

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Andrew Carnegie And The Rise Of Big Business Summary

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Andrew Carnegie and the Rise of Big Business (1975) by historian Harold C. Livesay is a biography of the nineteenth-century steel industry icon and tycoon, Andrew Carnegie. A bestseller when first published, the book was praised for its comprehensive information yet succinct style. It is commonly assigned to college students in business and US history as an “abridged” version of Carnegie’s life. Its themes include the rise of corporations in the United States, smart business tactics, and wealth accumulation, as well as philanthropy.

The relatively short biography is divided into three major stages that coincide with Carnegie’s development as a businessman: manager, capitalist, and entrepreneur.

The text opens with Andrew Carnegie’s first birthday, November 25, 1835, in Dunfermline, Scotland. Though born to very poor parents, Carnegie would become one of the most successful business people in American history.

Carnegie and his family left Scotland in 1848 when Andrew was thirteen years old. They settled in Pittsburgh, Pennsylvania, where his older sister, Margaret Carnegie, lived. Within two years, the family was earning far more than they ever had in Scotland. It proved to be a fortuitous time to be in Pittsburgh. An established center for textile productions, the city also had the workers and factories for even greater production, Carnegie observed. Livesay analyzes how Carnegie, living in a time of increasingly large mega-corporations, was positioned perfectly for staggering success in the steel industry.

The future billionaire’s first job was as a “bobbin boy” in a small mill; this meant he would run around the factory giving sewing equipment as requested. He received the job because he, like his boss, was Scottish. His nationality in the United States would prove handy later when Carnegie, requiring several associates to start his first business, invited a group of Scottish men he could trust.

Carnegie bounced around to several jobs across several industries, including railroads, telegraphs, and textiles. The various experiences would later prove to be invaluable in his evaluation of efficient labor processes. Throughout the text, Livesay emphasizes how what Carnegie learned as a young man—principles of communication and logistics—he would apply to the steel industry with resounding success.

While a manager at the Pennsylvania Railroad (a position he held for twelve years), Carnegie observed several inefficiencies that he was able to fix once he started Carnegie Steel Company, which would become, by far, the world’s largest steel production center. One major deficiency he found was that those who saved the company money rarely received the kind of promotion they deserved; instead, those who made a lot of money were promoted, even though their means may have cost the company more money in the long run.

Livesay discusses several scholars who have determined that contemporary corporations in America run off of a system of labor devised in the railway industry. Carnegie was the first to apply those principles to steel and iron works, an application that proved to be extremely profitable.

At twenty-eight, Carnegie invested in Adams Express Company and several other companies. He showed a talent for knowing where to place money to make even more money.

Livesay describes the rise of big business in nineteenth-century America. Meticulously, he combs through how the railroad and steel industries were able to flourish.

A lot of Carnegie’s success lay in his recognition of when a risk was warranted, as well as his courage to take that risk. This includes his extensive investment in Western Union and Pullman Railroads in 1873. The United States was in the middle of a depression, and many people had judged both companies to be on their deathbed. But Carnegie saw potential in both companies; once the economy rebounded, he was exponentially rewarded by his investments.

Carnegie was also willing to completely abandon old equipment. Unlike his competitors in England, Carnegie did not hold on to factories and machines that were not optimized; he preferred to suffer a minor loss of revenue and buy a new machine that would produce more benefit in the long run.

In 1901, Carnegie mostly retired from business. He sold his company, Carnegie Steel, to JP Morgan for $480 million dollars (in 2017, that’s 13.2 billion dollars). Carnegie spent the rest of his life founding or supporting philanthropic causes.

Despite the philanthropy, his reputation in the eyes of the general public was neutral to negative. Many people objected to his corporate organizing principles and protested the demoralizing and impersonal nature of working in one of his various enterprises. Popular cartoons showed him as a pot-bellied man who was always looking for ways to cheat others out of money.

The biography closes with Carnegie’s death on August 11, 1919. He left behind a strong legacy: an example of a rags-to-riches story, several philanthropic foundations, and major landmarks around the United States, including Carnegie Hall in New York City and Carnegie Mellon University in Pittsburgh. In one of his famous essays, “The Gospel of Wealth” (1889), Carnegie wrote that “the man who dies rich, dies disgraced.” He donated the majority of his wealth to various social causes and encouraged his fellow billionaires of the present and future to do the same.