Chapter 1The Good, Bad, and Ugly: A History of Corporate Behavior

In the late nineteenth century, Carnegie Steel was one of the world’s most well-heeled and effective businesses, expanding its workforce in large numbers and growing rapidly across the United States. It came close to being a monopoly, and its success enriched its founder, Andrew Carnegie, who first gained prominence in the railroad industry. With the financial support of J. P. Morgan, Carnegie leveraged his knowledge and experience to build a massive business in steel, to the point where by 1885 he was producing most of the steel that built America’s tools, factories, tall buildings, ships, streetcars, and machines. He was an iconic American business leader. Carnegie’s personal wealth approached that of John D. Rockefeller, reaching far beyond any nineteenth-century standard of wealth. In today’s world, Carnegie would be more than just a billionaire; his wealth would be at the Bill Gates or Warren Buffett level. To put the success of Carnegie’s business into context, when he sold Carnegie Steel in 1901, it netted him nearly $500 million, which today would equate to more than $15 billion. And this was not value that would accrue to shareholders, investors, and executives; it represented Carnegie’s personal enrichment, building on his already extensive wealth. And Carnegie’s personal wealth grew subsequent to the sale, allowing him eventually to become one of the world’s most generous philanthropists, on a scale ...

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