On March 27, the Obama administration hosted a summit in the White House for an elite group of 100 young philanthropists and heirs to billionaire family fortunes. Writing for the New York Times, Johnson & Johnson scion Jamie Johnson recounted a conversation with Zac Russell, a 26-year-old who recently had joined the board of his family’s Russell Family Foundation:
Sporting scraggy Brooklyn-style facial hair and a loosely fitting suit without a necktie that contrasted with the stately White House surroundings, Mr. Russell spoke with an air of cynicism. "Their head of public affairs contacted me and said, ‘Let’s talk,’ and so we’ll talk," he said.
Noting the identity of the New York Times writer, Gawker’s Matt Murphy chimed in with a dose of sarcasm: “At a conference for such refined people as these, not just any reporter will do. No, it must be a writer who intimately knows the struggles of the young and wealthy, and who can accurately transmit the ways in which they’re saving the planet to the unwashed Times-reading masses.”
At a time when we are all sensitive to vast income inequality and a rising oligarchy in the United States, this image is too easy to mock. To be fair, though, the federal government’s collaboration with elite private philanthropists is not new to this second gilded age. It has existed since the turn of the 20th century, when elite philanthropists such as Andrew Carnegie had amassed unprecedented wealth and inaugurated the field of philanthropy. A big difference between Carnegie's moment and Mr. Russell's, though, is who in the philanthropy-government relationship is doing the admiring and pursuing. In context, this difference reflects a deeper change in how philanthropists and the federal government perceive the money that they are respectively donating and accepting. Today, these philanthropists seem to view their mind-boggling wealth as belonging to them. For Carnegie, though, this wealth belonged to the American people.
Cognizant of how class tensions were escalating across the country, Andrew Carnegie took pen to paper in 1889 to write a defense of capitalism. In The Gospel of Wealth, the steel magnate acknowledged that this economic order produced a few moguls and left the masses destitute. The rising tide of labor unrest in the United States suggested that Americans’ turn to socialism seemed all the more possible, so this inequality was not something that capitalists could ignore. Before this rising threat reached its crescendo, though, Carnegie offered the American people a middle way between capitalism and the socialist alternative: Voluntary wealth redistribution by its elite class.
Selling the concept to his American readers, Carnegie explained that wealthy Americans, like state bureaucrats in a socialist regime, would be “the mere trustee and agent for his poorer brethren.” Compared to state bureaucrats, though, elite Americans were better prepared for the job of redistributing wealth because those who had made the money would be bringing to the task their “superior wisdom, experience, and ability to administer, doing for [the American people] better than they would or could do for themselves.” This superior wisdom also would give industry leaders the foresight to know that they should redistribute this wealth toward projects that would benefit mankind in the long-term, rather than to projects that met Americans’ short-term needs such as food and housing.
Three years later when Carnegie sold Carnegie Steel to J. Pierpont Morgan, he became a full-time philanthropist. That fall, he had sent the new president Theodore Roosevelt a letter outlining his idea for the Carnegie Institution of Washington: “Mr. President, believe me that I am made a very happy man this day of thanksgiving by the thought that I have been so favored as to be enabled thus to prove, at least in some degree my gratitude to, and love for, the Republic to which I owe so much.” Wanting to give back to the nation whose population and laws had facilitated his concentration of wealth, Carnegie reached out to the president and asked if he would be interested in such a national scientific research institution. Much in line with his vision of philanthropy, the institute Carnegie funded would not only help redistribute his private wealth on behalf of the American people, but it would be used for the nation’s long-term progress.
In January of 1902, Roosevelt sent Carnegie a note confirming that he would accept his invitation and that he congratulated “the nation upon your purpose to found such an institution.” As ex officio members of the first board of trustees, the gilded age tycoon selected the U.S. president, the Senate president, the Speaker of the House, the secretary of the Smithsonian, and the president of the National Academy of Sciences. Located in the nation’s capital, its first meeting was held in the office of the Secretary of State. This was to be a privately-funded project on behalf of the nation’s people.
Roosevelt was appreciative of Carnegie’s donation, but was little impressed with the man and his means of attaining wealth. Roosevelt wrote in a letter to a colleague: “[I have] tried hard to like Carnegie, but it is pretty difficult. There is no type of man for whom I feel a more contemptuous abhorrence than for the one who makes a God of mere money-making.” He continued his criticism of Carnegie by comparing the industrialist’s support of international peace with his own lack of seeming care to injustices in his own mills: “All the suffering from Spanish war comes far short of the suffering, preventable and non-preventable, among the operators of the Carnegie steel works, and among the small investors, during the time that Carnegie was making his fortune… Unrighteous war is a hideous evil; but I am not at all sure that it is worse evil than business unrighteousness.”