A century-and-a-half ago, Andrew Carnegie began building one of the greatest personal fortunes the world had ever seen. The industriousness and rapid innovation characteristic of late 19th Century America, along with a lot of low-wage workers and occasional union-busting, propelled the Carnegie Steel Company into the upper tiers of corporate success. Carnegie sold the company in 1901 to J.P. Morgan’s United States Steel Corporation for the tidy sum of $480,000,000 — about $14.1 billion in today’s money. Carnegie briefly became the richest person in America.
And then he did something unusual with his money: he started giving it all away. Andrew Carnegie gave away some 90 percent of his fortune to worthy causes, with a special emphasis on local libraries, education, scientific research, and world peace.
Carnegie had a unique approach to philanthropy and wealth inequality. A lot of people asked him why he didn’t just pay his workers more if his goal was to do some good with his wealth. And his basic answer to that criticism was that once a person’s basic needs were met, they were better off having a man of wealth like him make the decisions about how to invest any surplus in order to produce the most beneficial results for the community. Carnegie thought that if ordinary people simply got a bit more money directly, they’d buy a little better food, a little better drink, and a little better house. But more important to the growth of the community than its individuals having a little more material comfort were societally useful things like universities, libraries, and scientific achievements, and the workers weren’t going to put the surplus wealth being generated into those types of things without a little intervention from a guy like him.
Right now, there are a number of billionaires who are following Carnegie’s basic philosophy. Bill and Melinda Gates, for instance, are credited with saving millions of lives (and in turn generating billions of dollars in economic activity) through their health initiatives. Warren Buffet is following a little different model than Carnegie but has pledged to give 99 percent of his wealth to philanthropic causes, which is good. But today I want to focus on the society-building efforts of two of the buzziest billionaires out there: Jeff Bezos and Elon Musk.
Neither of these men are quite in the “full philanthropic” stage of their careers; they haven’t sold Carnegie Steel to J.P. Morgan yet (they do both already engage in a bunch of charity-only work on the side and Musk did get rich by selling off some of his early companies, although he remains very actively involved in his current ones). But what is really interesting are the efforts on both their parts to make societally good initiatives into businesses that are actually themselves profitable.
The competing space companies Blue Origin, founded by Bezos, and SpaceX, founded by Musk, are probably the best examples of this. A lot of people scoff at the idea of billionaires and their rockets being good for society when there are people on Earth who still have trouble paying their mortgages, and that’s valid. But space exploration has been and will be a very good thing for all of us. In addition to leading to CAT scans, baby formula, portable computers, camera phones, and a host of other societally useful inventions, space travel is fundamentally necessary to the ultimate survival of our species. Someday, the Earth is going to be a charred cinder, and if we haven’t figured out space travel by then, that’s the end of our species.
Of course, you also have Musk’s efforts, through the newly profitable automaker Tesla, to transition us away from an energy system in which we burn liquified Jurassic-era plankton to make our cars go. Even if you’re a climate change denier, maybe you can still get on the trolley for this one and at least help prevent the 53,000 premature deaths caused in America every year by all of us involuntarily huffing ancient burned plankton fumes all day as cars zoom by.
And then there’s Jeff Bezos’s love for and defense of good journalism, critical for the long-term health of any democracy. This is exemplified most prominently in his ownership of the “Amazon Washington Post” (as a certain subliterate Washingtonian refers to it), but perhaps exemplified most endearingly in his recent response to attempted dick pic extortion. Now I’m no defender of dick pics generally speaking, but if that is Jeff Bezos’s thing and Lauren Sánchez is OK with it, I’m certainly not one to judge. When the sleaziest, slimiest, least-ethical publisher in the business got ahold of Sánchez and Bezos’s personal photos and tried to use them to extort the richest man in the world into publicly lying about the objectivity of their garbage tabloid, Bezos had an epic response. Was anyone else reminded of the scene in The Dark Knight where Morgan Freeman tries to explain to that sniveling accountant how it’s a bad idea to try to extort Batman? I was lukewarm on Bezos before, but he has definitely gotten my attention now. He displayed some genuine courage there, stood up for real journalism by smacking down a bodily fluid-soaked Kleenex of a tabloid, and hey, did the right thing. That still matters to some of us.
I get people’s arguments that maybe our system shouldn’t allow for billionaires to exist in the first place, but at least these guys are using their wealth to fund interesting, Carnegiesque endeavors. If you ask me, that’s a damn sight better that using one’s wealth to fund a vanity project campaign for the presidency.
Jonathan Wolf is a litigation associate at a midsize, full-service Minnesota firm. He also teaches as an adjunct writing professor at Mitchell Hamline School of Law, has written for a wide variety of publications, and makes it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at jon_wolf@hotmail.com.
The Battle Of The Billionaires As Elon Musk And Jeff Bezos Try To Out-Carnegie Each Other curated from Above the Law
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