When Mark Zuckerberg recently announced sweeping changes to his company Meta’s work practices in anticipation of a Trump 2.0 presidency, keen-eyed observers noticed the tech titan was wearing a wristwatch worth nearly US$900,000 (£837,000). It’s one of a range of high-end timepieces he has sported recently.
This ostentatious display of wealth may have ensured the luxury magazine market’s admiration. But, it has prompted others to compare the likes of Zuckerberg and his fellow titans to the “robber barons” of 19th- and early 20th-century America.
In his farewell address from the Oval Office on January 15, outgoing president Joe Biden warned that “an oligarchy is taking shape in America of extreme wealth, power and influence that literally threatens our entire democracy, our basic rights and freedom, and a fair shot for everyone to get ahead”.
Imagine instead these wealthy individuals using their resources to uplift society. This was the vision of the steel magnate Andrew Carnegie, one of the most famous of the so-called robber barons of America’s last “Gilded Age”. Carnegie dominated mass production of steel in the last quarter of the 19 century, at a time of massive industrial expansion in the US.
Based on medieval feudal lords who used often illegal means to amass wealth at the expense of the rest of the population, the robber baron label was applied to industrialists and oil magnates like John D. Rockefeller, Cornelius Vanderbilt and Carnegie to criticise their perceived ruthlessness. They were challenged for their monopolistic practices, seeming disregard for the rights and wellbeing of their labourers, and their accumulation of enormous personal fortunes at huge social costs – even when they were seen to stay within the law.
Today’s tech titans appear to share numerous similarities with them. Zuckerberg’s Meta dominates social networking, Jeff Bezos’s Amazon rules e-commerce, and Elon Musk’s SpaceX commands the global rocket launch market, while his control of X (formerly Twitter) gives him a massive voice on social media. The influence of these men is immense, their empires expansive, their assets astounding. Public debates are rife with concerns about their corporate practices, working conditions and wider social, political, economic, and environmental impacts.
It’s therefore unsurprising that the notion of robber barons is undergoing a renaissance. Whether that comparison is appropriate is debatable. Some commentators have suggested that this label is a misnomer – and a better one might be “tech tyrants”. They may share “some” robber baron characteristics around ruthless capitalism, but display fewer of their potentially redeeming features around using their wealth for the wider public good.
So, drawing on Carnegie’s 1889 essay The Gospel of Wealth, what can a robber baron teach a tech titan such as Zuckerberg about the essence and expectations of enormous wealth?
With great wealth comes great responsibility
The Gospel of Wealth offers Carnegie’s reflections on how to appropriately use one’s accumulated wealth. Carnegie acknowledges that, while inequality of wealth is unavoidable, massive wealth should come with moral obligations. In his view, the wealthy should act as trustees for the poor and support those less fortunate.
Displays of extravagance should be avoided. Any surplus, beyond provisions for one’s family, should be treated as “trust funds” to be used during one’s lifetime to produce the largest communal benefit. Under no circumstances is wealth to be hoarded or passed on as inheritance.
Should the wealthy fail to fulfil those duties, Carnegie proposes a simple corrective option. As wealth needs to be shared with the community on whose back it was accumulated, he recommends strong inheritance taxes. He writes: “By taxing estates heavily at death, the state marks its condemnation of the selfish millionaire’s unworthy life.”
Carnegie also offers a number of practical guiding principles. Wealth should be used to provide stepping stones for those who are ambitious to rise and keen to help themselves. It should aim to prevent, rather than alleviate, poverty. Finally, it should be used for strategic rather than indiscriminate charity.
Furthermore, he believed in the provision of institutions offering lasting communal benefits. Between 1883 and 1929, he built 2,509 Carnegie libraries around the world, as well as educational and healthcare institutions, parks and public spaces. To this day, Carnegie’s provisions fund and support the space for the International Court of Justice and other legal bodies. As he argued, a person “who dies thus rich dies disgraced”.
Lost in fortune
With vast sums of wealth and comparatively small proportions being used for wider public benefits, today’s billionaires seem to be a far cry from Carnegie’s ideal.
The latest edition of The Forbes Philanthropy Score ranks Musk and Zuckerberg among the least generous billionaires, having given away less than 1% or between 1% to 4.99% of their wealth respectively so far, even if, in Zuckerberg’s case, this amounts to more than US$4.5 billion donated through the Chan Zuckerberg Initiative, run with his partner, Priscilla Chan.
Superficially, tech titans have tried to emulate some of Carnegie’s principles through their philanthropy. The Giving Pledge, an initiative encouraging the wealthy to commit the majority of their wealth to charitable causes, includes Zuckerberg and Musk as signatories.
But the structure of these donations has led to questions about how far they actually constitute philanthropy. Rather than giving wealth away, it often seems transferred into structures, such as donor-advised funds or limited liability companies, that can be geared towards tax, investment, and reporting benefits that analysts estimate could, in some cases at least, be greater than the sums donated.
This leads us to the concept of “philanthrocapitalism”: the idea that giving can be married with the structures of neoliberal capitalism, which often tend to make rich people even richer.
Critics of this approach think that, while appearing to be altruistic and being portrayed as maximising philanthropy’s potential, philanthrocapitalism shifts the broader discourse on philanthropy itself. As part of that, the transfer of business principles and financial practices to philanthropy tend to mimic the kind of structures that exacerbate, rather than alleviate, inequality.
British academics Linsey McGoey, Darren Thiel, and Robin West argued in a 2018 paper that philanthrocapitalism “helps to confer moral legitimacy on pro-corporate government regulation and public spending that directly exacerbates economic inequality”.
Carnegie’s philosophy was clearly paternalistic, and he didn’t always practise what he preached. But he could offer today’s tech titans insights into recognising and navigating the moral obligations that come with the accumulation of wealth.
First published by The Conversation
Leave a Reply