Contrasting Capitalists, Balanced Biographies

102306 article book price Contrasting Capitalists,  Balanced BiographiesMellon: An American Life, by David Cannadine. Alfred A. Knopf, 779 pages, $35.

The political wags tell us we’re living in a new Gilded Age, so it’s probably a good time to check in with the old—but be advised that these two biographical whoppers about a pair of industrial Andrews from the first Gilded Age aren’t for the faint of wrist. David Nasaw’s sober, methodical life of the pint-sized plutocrat (Andrew Carnegie was just a notch over five feet tall) weighs in at 878 pages; while David Cannadine’s brisker Mellon: An American Life is only a touch shorter.

That’s an awful lot of pages, but these Pittsburgh powerhouses helped define and shape an epoch of American capitalism when this country actually made things (who’s the Chinese Carnegie?), when Steel Town was true to its name—a belching, soot-covered mess otherwise known as “hell with the lid off.” Carnegie, a bumptious little Scotsman who swaggered as if he were twice his size, soared with iron and steel, smashing unions along the way—Carnegie’s tactic was to conciliate, then crush—as he piled up a vast fortune; when he sold Carnegie Steel to J.P. Morgan in 1901, he walked away with $120 billion (in 2006 dollars), which he used to underwrite a hodgepodge of philanthropic causes, foundations and charitable trusts. (Next time you walk by a branch of the New York Public Library, thank Mr. Carnegie). A self-taught, self-righteous know-it-all, he lectured the world—like George Soros, he wouldn’t ever shut up—in his voluminous writings on many topics, counseled the rich to give away their money, and embarked on a quixotic campaign to bring about world peace, even if part of the Carnegie fortune came from the U.S. Navy, which bought armor plates manufactured in Carnegie mills.

The life of Andrew Mellon offers a prim study in contrast with his fellow western Pennsylvania capitalist. Whereas Carnegie was a sunny extrovert, Mellon was a shy, pallid, unfunny, emotionally stunted man who loathed the spotlight. He was no activist, nor was he, as Mr. Nasaw writes of Carnegie, a “moral philosopher of industrial capitalism.”

An entrepreneur of genius, Mellon let his endeavors speak for themselves. Mellon money helped kick-start everything from Alcoa to Gulf Oil, and flowed through almost every sector of the American economy, from banking to gas, metals and mining. A discerning, indefatigable art collector, he was the driving force in the creation of the National Gallery. In his three terms as a tax-cutting Secretary of the Treasury, he saw the 20’s roar (even if he didn’t), then crash. Unjustly vilified by F.D.R., he is today a hero of the supply side gang—Mellon was, you might say, a supply-sider avant la Laffer.

On balance, Mr. Cannadine’s volume is the more fluent of these two supremely fair and judicious books. Mr. Cannadine is chattier and more unbuttoned, while Mr. Nasaw is a dry, austere, somewhat plodding stylist. But Carnegie was the far more interesting man—and how couldn’t he be? There are more knots to untie in Carnegie than there are in 10 men. In its broad outline, the life of Andrew Carnegie is the immigrant success story writ fabulously large, and it’s got Horatio Alger beat by a mile.

Born in 1835, at 12 he arrived in Pittsburgh as a dropout, but he was a canny operator and an aggressive go-getter. From telegraph boy to superintendent on the Pennsylvania Railroad, Carnegie gathered up a clutch of important contacts that would be instrumental in his early rise. He had instinct for infrastructure, and he built his early fortune on a welter of insider deals and secret partnerships that make one’s head spin. During and after the Civil War, the United States went railroad mad, and Carnegie was there, providing rails, wheels, steel bridges and just about everything else to keep the trains running.

Today, much of this activity would be illegal: “Carnegie survived and triumphed in an environment rife with cronyism and corruption,” Mr. Nasaw writes. Way back when, Carnegie would have been denounced as a robber baron—even now, say “Andrew Carnegie” in a union hall and you’ll probably get decked—but Mr. Nasaw is too subtle a historian to see Carnegie in such crude terms. Conversely, Mr. Nasaw doesn’t lionize him as a hero of capitalism either. (He’ll be hearing from The Wall Street Journal’s editorial board about that.) Rather, Mr. Nasaw, without cheap point-scoring, carefully undercuts Carnegie’s sometimes blind estimate of his own actions: We see him as driven, perhaps deluded, an impish mass of contradictions.

By his mid-30’s, having decamped to Manhattan and sitting on a pile of loot, he resolved to give away all his money. Yet his good intentions turned him into a rather nasty capitalist; with apologies to Balzac, there may have been no great crime behind his fortune, but there were certainly a lot of ill-gotten gains. Carnegie became a man possessed, hell-bent on increasing revenues to fund his ecstatic visions. As Mr. Nasaw makes clear, part of the problem with Carnegie is that he fancied himself a disinterested sage who transcended all class and interest: Carnegie believed he could be a friend to the workingman, a selfless captain of industry and public philosopher all at once. But squaring this circle would prove nearly impossible.

If Carnegie believed the community created riches—a position he outlined in his famous “Gospel of Wealth” articles—he also believed that the community should have no role in its disposal. This awesome task would fall on the shoulders of the all-knowing retired capitalist (i.e., Carnegie) acting as a wise trustee. It was a thoroughly paternalist vision that set Carnegie on a collision course with the unions—they had no role in his scheme—and culminated in the showdown at the state-of-the-art Homestead, Penn., steelworks in 1892, one of the nastiest confrontations between capital and labor in American history. (To the men working in his plants, Carnegie effectively said: I’ll break your union, but take a library as a consolation prize.)

Carnegie’s reputation suffered terribly after the Homestead riots, yet he pressed on undeterred until his death in 1919. Mr. Nasaw’s Carnegie is a man of enormous energy—and enormous conceit. His gifts to the world—free tuition for Scottish university students; the Carnegie libraries; the famous music hall on 57th Street; research institutions; sundry endowments and bequests—were extraordinary, yet his hard-charging ways rankled many. In his campaign for world peace, which consumed his late years, he turned himself into a full-time pest, bombarding Presidents Theodore Roosevelt and William Howard Taft with cables and letters, even telling them how to conduct their diplomacy. An infuriated T.R. fumed that “if Andrew Carnegie had employed his fortune and his time in doing justice to the steelworkers who gave him his fortune, he would have accomplished a thousand times what he has accomplished or ever can accomplish in connection with international peace.”

NO LOUD PROCLAMATIONS FROM THE AUSTERE Mellon, no running off in a thousand directions, no theoretical hobbyhorses and very few wrinkles; there’s nearly no there there. One wit said of Mellon that he looked like “a dried-up dollar bill that any wind might whisk away.” “He was a hollow man, with no interior life,” Mr. Cannadine concludes. “Mellon was a child of Mark Twain’s Gilded Age, though he disliked gilt.”

For all that, Mellon: An American Life is a surprisingly robust, even juicy look into the world of the dour Scotch-Irish G.O.P. Presbyterianism that profoundly shaped Mellon’s outlook. Mr. Cannadine gives ample space to Mellon’s stern father, “Judge” Thomas Mellon, son of a farmer and founder of T. Mellon & Sons bank, the seed of Mellon empire; Andrew’s disastrous marriage; and his strained relations with his children, Ailsa and Paul (the ever-bitter son)—all of which makes the book something of a group portrait.

Born in 1855, as a young man Mellon took the family bank and expanded and consolidated it: swallowing up other banks, seeking out alliances with the cash-hungry innovators of new technologies and processes. He once remarked, “What’s really important is that the money is at work, creating work.” Here, in a concise formulation, is the Mellon way. As a venture capitalist, Mellon was everywhere and nowhere. (When he arrived in Washington in 1921, he was called “the most widely unknown plutocrat in the firmament.”) Quiet in his tactics, he was every bit as aggressive as Carnegie, with none of the bluster. He was also a philanthropist, however much he disliked charity, and on a much smaller scale than Carnegie. (The Andrew W. Mellon Foundation is still doling it out.)

Mr. Cannadine’s account of Mellon’s art collecting—he wheeled and dealed with the canvases as much as he did as a banker, even negotiating with the Soviets in 1930 for a haul of the Hermitage’s greatest works—occasionally drags, but his sections on Mellon’s Washington years are excellent. Mellon has the unfortunate fate of being associated with three of our drabbest Presidents—Harding, Coolidge, and Hoover—but he was a generally solid Secretary of the Treasury, even if he was dogged by allegations of conflict of interest. (Though required by law to divest himself of his business holdings, Mellon did keep up secret contacts via his brother.)

Ignominy came his way in the 30’s, with the so-called “tax trial.” The Roosevelt administration had the knives out for the dim gray men whom they blamed for the Depression, and they went after Mellon, now approaching 80, for tax evasion. Mr. Cannadine’s account of the proceedings is riveting. Needless to say, F.D.R. comes off looking mean, petty and vindictive; it was a nickel-and-dime affair all the way. Mellon was ultimately acquitted; too bad he was already in the grave when the verdict came down.

Matthew Price writes for Bookforum and other publications.