Philanthropy does it work?
Max Weber a German sociologist and political economist in his book The Protestant Ethic and the “Spirit” of Capitalism was looking into the foundational ideas that created the perfect storm for Capitalism to thrive. To Weber these ideas came from Protestantism, specifically from Luther’s concept of calling and Calvinism’s view of Predestination.[1] Weber noticed a relationship between people involved in Protestantism and their activity in business. Due to this observation Weber turned toward the Protestant work ethic to see if there could be a connection to Capitalism.[2]
On November 20, 1935 a Scottish- American industrialist was born, Andrew Carnegie. Over His lifetime he became a rich philanthropist in the U.S and Britain and gave away around 90% of his wealth which was valued at approximately $350 million in the early 1900’s. In today’s value according the GDP that value would be around $65 billion. His donations went to libraries, museums, scientific research, education and world peace efforts.[3] According to other sources, at his peak he was worth $310 Billion in today’s monitory value and his remaining $30 million was given away after his death.[4] How does a person of such great wealth become such a philanthropist? To what does he owe this shift in mind set to?
The pivotal point for Him seems to be in 1889 when he wrote an essay entitled the Gospel of Wealth. His opening line stated, “The problem of our age is the proper administration of wealth, that the ties of brotherhood may still bind together the rich and the poor in harmonious relationships.”[5] A simple summary of Carnegie’s complex essay could be summarized as follows. He recognized the changes of wealth in society over the past centuries before his life and to him this was obvious due to the housing discrepancy between the wealthy and the working class. Though this concerned him he viewed it as better than everyone living in “universal squalor.” It is obvious that Carnegie embraced capitalism and felt that individualism and the ability to accumulate wealth was in the best interest of the whole. The concern for him then became that since wealth was assigned to the few and not the whole how should one’s wealth be distributed to those without it? For him there appeared only three solutions. Give all one’s money away upon one’s death which he felt limited an individual’s ability to do good in the world. It could be left as an inheritance to one’s children but, that was no better than a curse and is a form of misguided affection. To him the only honorable way was to disburse it in a way for all of society to appreciate it which he felt was better than giving it in small amounts over a long period of time to individuals’ who would most likely squander it on personal desires. The wealthy should avoid extravagant lifestyles and great shows of wealth.[6]
The distribution of wealth to Carnegie required great wisdom since an “indiscriminate” form of charity could be damaging to those who received it. To Carnegie this method would allow the “laws of accumulation” and the “laws of distribution” to stay in place and the rich would be called upon to be trustees of the poor.[7] With this in mind Andrew Carnegie believed “A man who dies thus rich dies disgraced.”[8] It appears Max Weber didn’t consider this method worthy of consideration. When asked about the a “high regard for money” and the “sense of duty” of the wealthy he responded that this “psychic phenomena from Moliere’s Avare to Carnegie” was “based on fundamental errors.”[9]
Though the philosophy of Andrew Carnegie isn’t flawless by any means, it is admirable that a man of such wealth took the time to assess the fact that life isn’t often fair and those with great wealth had a responsibility to live modestly and distribute their wealth to benefit society. Does this form of philanthropy really benefit those in need? How has the Spirit of Capitalism affected philanthropy? What drives philanthropy? Guilt? Does Carnegies style of philanthropy actual assist the poor?
Philanthropy is an important source of income for many charitable organizations. How affective is it? Though there are some obvious positive aspects of donating large sums of money to charity there is also a dark side. “The eighty-five richest people in the world together own more than a trillion dollars in wealth, according to Oxfam. Many of them use that wealth in ways that keep current power structures in place—for instance, by supporting political candidates who prefer lower taxes for the rich and smaller government spending on social programs—which ultimately hurt the poor.”[10] I don’t think Andrew Carnegie had these type of political aspirations in mind when he wrote The Gospel of Wealth but he was aware of some of the challenges that Philanthropist’s may face; “of every thousand dollars spent in so-called charity today, it is probable that nine hundred and fifty dollars is unwisely spent: so spent, indeed as to produce the very evils which it hopes to mitigate or cure.”[11]
[1] Max Weber. The Protestant Ethic and the “Spirit” of Capitalism. New York: Penguin Books. 2002. 32-33
[2] https://www.sparknotes.com/philosophy/protestantethic/summmary/
[3] https://en.wikpedia.org/wiki/Andrew_Carnegie
[4] Brian Warner. The top 25 Richest People Who Ever Lived – Inflation Adjusted.
https://www.celbritynetworth.com/articles/entertainment-article/25-richest-peopel-alive-inflaation-adjsuted/
[5] Andrew Carnigie, The Gospel of Wealth, and Other Timely Essays. New York: The Century Company. 1900. 1
https://archive.org/details/cu3192400121/mode/2up
[6] Andrew Carnegie. 3-15
[7] Andrew Carnegie.18
[8] Andrew Carnegie.19
[9] Max Weber. 227
[10] https://www.newyorker.com/business/currency/was-carnegie-right-about-philantthropy
[11] Andrew Carnegie. 16
About the Author
Greg Reich
Entrepreneur, Visiting Adjunct Professor, Arm Chair Theologian, Leadership/Life Coach, husband, father and grandfather. Jesus follower, part time preacher! Handy man, wood carver, carpenter and master of none. Outdoor enthusiast, fly fisherman, hunter and all around gun nut.8 responses to “Philanthropy does it work?”
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I’m not quite getting the relationship in your post. But, your comment that “Weber noticed a relationship between people involved in Protestantism and their activity in business” is quite focused. I would like to hear from you your insights as to how this relationship flourished. Thank you
Steve,
Sorry for the confusion. I believe I am summing up comments made by Weber, he associated the protestant ethic not only to predestination but also to their active role in business and work. I personally do not see what I would call a solid work ethic in corporate america today not do I see a great deal of protestant beliefs affecting how we work. This is why my thesis is focusing on the dichotomy of secular and sacred and how it inhibits our ability to see work as ministry.
As far as the connection between Carnegie and Weber: Weber slams Carnegie’s belief in the responsible handling of wealth. Carnegie wrote several essays on the subject on wealth during the time Max Weber was working on his work. My point was to have people realize that both looked at the causes of capitalism but Carnegie was looking for a way to responsibly work within the system.
I appreciate the comparison and insights. I always look forward to your depth of contribution
Greg,
I love that you brought in the philanthropic perspective into this discussion. Am I understanding that Carnegie adhered to the principle, to whom much is given, much is expected? Having received much, he then gave much, and while his endeavors are noble, I suppose we have to ask how he received much? At what cost did his successes come and who actually paid that price? I appreciate that many who hold great wealth give back to society in ways that do great good. I appreciate how they realize that a responsibility comes with such wealth. But not all with wealthy do, as you noted above. Would philanthropy be needed if our economic systems weren’t so skewed? Can our systems do better to bring about equity amongst the people, and what role can the Church have in that endeavor?
Darcy,
Andrew Carnegie as I understand was quite poor and was a self made millionaire in steel. He sold his steel firm to the Rockefellers if my memory serves me correctly. I am not sure of his motives but I found it refreshing that he did feel that since much was given to him he had a responsibility to those less fortunate.
I struggle as to the churches role in assisting the poor. I doubt that all the money in every mega church in America would make a very big dent in the issues surrounding poverty in America. This issue is complex! What is obvious it is going to take more than politics and the church to fix. As far as financial equity among people I am not sure how to deal with that. Marxim sounded good to many and ended in a disastrous failure. I spend a lot of time in Canada and their semi-socialist economic system isn’t all that great. They have similar problems as we do and are far more liberal and have free healthcare. But their prices are much hirer. They also have their fare share of homeless. Actually I know a number of Canadians that hoard up on things when they come to the US. Even Jesus said the poor will always be with us in Matthew 26:11. When I look at it on a global level our poor people in America are considered wealthy when compared on a world scaled of poverty. Is this due to that fact that we are a capitalist society where many of the others aren’t? According to the internet average income in the US is $46000, the poverty level for a family of 4 is $25,000 and the average per capita income in the world is $10,300. I have friends in Bali and a high paying job averages $500 a month.
Greg, your polymathic interests intrigue me. Is Carnagie someone you have studied more extensively? Will you also please remind me of the focus of your research? That would help me give more pointed feedback. I’m certainly interested in the new innovative approaches to philanthropy. You might be interested in a group called “the future of fundraising.” They are talking about the individual (like myself) raising funds from within their network. Their provocative tag line is “how to keep parachurch ministries white.” They are experimenting with advocacy and other other methods of raising support.
Your post reminded me of the “third years” and their presentations in Oxford. One specifically studied generational wealth and how complicated things can get. It seems that some view their wealth as a means in which they may help balance the scales, while others see their prosperity coming merely with a superficial obligation to “give something back.” (And still others who are completely self-centered with no real regard for the condition of others.) I appreciated your post and would love to know a bit more about how you ended up going in this particular direction.
John,
I must admit I ended up going this direction for a few reasons, I wish it was because of a moment of inspiration but it was much simpler than that. It was a combination of a crazy schedule limiting my ability to do justice to the book, struggling with broad sweeping assumptions on Theology and Culture issues without a thorough investigation as to how all of Calvinism fits together and how He came up with his doctrine of predestination. I wasn’t convinced by the book he really knew the theology he was discussing. I am not a Calvinist but I could make an argument that the theology of free will which could lead to an aspect of individualism and a work ethic based on fear much like predestination. Finally, after rescanning the book I notice where Weber slams the idea of financial responsibility and names Carnegie by name. Since we are in a capitalistic society and it appears it will be for quite awhile I think financial responsibility and philanthropy are viable options when looking at wealth redistribution.