The Richest Man In The World: The Ugly Truth

 

How does a boy born into poverty become the richest man in the world? Andrew Carnegie is the personification of the American Dream; an extraordinary rise from the very bottom to the absolute top. However, I must warn you: there are two different sides to Andrew Carnegie. On the one hand, he was a hypocrite - he preached about workers' rights publicly, and yet privately he slashed his workers' wages, significantly increased their working hours, and essentially exploited his staff as slave labor in barbaric and dangerous conditions to build his fortune. He destroyed unions, and his actions resulted in countless unnecessary brutal deaths. And yet, on the other hand, Andrew Carnegie may be the greatest ever philanthropist - after becoming the richest man in the world, he then spent the rest of his life giving almost all of that money away. He funded universities, schools, and nearly 3000 free public libraries around the world to help others improve their own position in life. He’s also responsible for incredible innovation that helped build America and change the way we do business. Carnegie’s story is both inspiring and shocking. And involves several other business titans - for example, Carnegie was bitter rivals with Rockefeller, and also ended up making the biggest business deal in history with JP Morgan. But before all that wealth and drama, we need to travel back to 1835, where a young boy is born into abject poverty.

Andrew Carnegie was born in Scotland. But Andrew’s start in life was depressing to say the least. His first home consisted of just one main room inside a small cottage which the Carnegies shared with another family. Andrew’s father was a loom weaver, making cloth by hand. And Andrew had expected he would do the same thing when he was older. But then along came the industrial revolution and steam-powered looms, which put hand weavers like Andrew’s father out of business. Suddenly the little income the family had was gone.

In order for the family to have enough money to survive, Andrew’s mother stepped up and began working extremely long hours repairing shoes for people in the nearby area. Meanwhile, Andrew witnessed his father begging for work - a haunting image that would stick with him for the rest of his life. But it was soon clear that there were no real prospects left for the family in Scotland. And Andrew’s mother had heard stories from her sisters in America that the US was the land of opportunity. So in 1848, the family sold all of their possessions, and used the money to embark on a one-way trip to America in search of a better life.

The family arrived in Pittsburgh, Pennsylvania - which was a hub for manufacturing. But both of Andrew’s parents struggled to find consistent work. So Andrew dropped out of school after just 5 years of education, as he knew the family needed him to find work and provide another source of income. The family faced dire circumstances, living in extreme poverty, but they were not alone in their struggles. Many immigrants in America at the time were in similar situations, facing harsh working conditions and low wages. Andrew's life at this point was far from the luxurious lifestyle he would later come to embody.

However, life began to change when he got a job as a bobbin boy in a cotton factory, earning a meager $1.20 per week. Despite the hard work and difficult conditions, Andrew seized the opportunity to learn about the inner workings of the factory. His curiosity and work ethic did not go unnoticed, and he soon advanced to become a messenger boy for the Ohio Telegraph Company. This was the beginning of his journey toward becoming one of the wealthiest individuals in history.

Andrew's remarkable rise to the top was accelerated when he became a protégé of Thomas A. Scott, the superintendent of the Pennsylvania Railroad Company. Thanks to Scott's guidance, Andrew quickly advanced within the company and became involved in overseeing the expansion of the railroad, learning invaluable lessons about the world of business.

There's no doubt that his mentorship played a pivotal role in Andrew's future success, helping him understand the intricacies of running a profitable business. The relationship between the two was close, with Scott fondly referring to Andrew as 'my boy Andy.' While things were looking up for Andrew's future, they weren't for his father, who continued to struggle in finding stable employment.

After seven years in America, Andrew's father passed away, leaving the family in a difficult position. Despite their challenges, Andrew's determination only grew. He was now on a path that would lead him to change the industrial landscape of the United States and amass immense wealth.

Fast forward to the late 19th century, and Andrew Carnegie had become the "Steel King" of America. He transformed the steel industry by implementing innovative techniques and practices. One pivotal moment came with his investment in the Bessemer process, which revolutionized steel production by making it more efficient and affordable. Carnegie saw the potential of this technology and, with unwavering belief, built a massive steel production plant – a gamble few others were willing to take.

Carnegie's efficiency extended beyond technology. He adopted a rigorous approach to cost control, streamlining operations and ruthlessly cutting labor costs to maximize profits. He was known for making swift and decisive decisions, often replacing workers with machines to reduce labor expenses. He didn't hesitate to eliminate entire processes or departments if he found more efficient ways of doing things.

His commitment to efficiency also extended to material handling, as he introduced overhead cranes and hoists in his steel mills to expedite the steelmaking process. This focus on efficiency, although profitable for Carnegie, led to challenging conditions for his workers. The long hours, low wages, and dangerous working environments they endured were at odds with the image Carnegie projected as a champion of workers' rights.

Carnegie's relationship with his workers became strained when the employees of his Homestead steel plant sought better wages and working conditions. In 1892, the workers went on strike, demanding their fair share of the prosperity they had helped create for Carnegie. The dispute escalated, and Carnegie's business partner, Henry Frick, played a central role in the conflict.

Frick's ruthless approach further exacerbated the situation. When negotiations reached an impasse, he closed down the steel mill, locked out the workers, and hired the Pinkerton Detective Agency to break the strike. The clash between the Pinkertons and the striking workers turned violent, resulting in several deaths and injuries.

The violent confrontation at Homestead left a stain on Carnegie's reputation. Although he was in Scotland during the strike, it was his company's actions, under Frick's leadership, that led to the tragic events at Homestead. While Carnegie may not have directly intended for violence to erupt, it tarnished his image as a benevolent employer and advocate for workers' rights.

The strike ultimately failed, and the workers' bargaining power dwindled. With no union and dwindling public support, their wages remained low, and the labor conditions hardly improved. Carnegie's legacy as a philanthropist, a reputation he cherished in his later years, seemed at odds with the way he treated his workers during the strike.

In the aftermath of the Homestead strike, tensions between Carnegie and Frick escalated. Their partnership deteriorated rapidly, leading to a bitter separation. While both men had once dominated the steel industry, they ended their