Is there a moral responsibility to wealth? And what is the best way to pass on money?

“The man who dies…rich dies disgraced.” Such is the verdict of Andrew Carnegie (1835-1919), industrialist and philanthropist, in his essay The Gospel of Wealth, in which he claimed to “solve the problem of the Rich and the Poor.” He asserted that the only creditable option for those with surplus wealth is to use it during their lifetimes for the common good, and that to do otherwise is a disgrace. He and an increasing number of wealthy individuals have donated and administered large fortunes for charitable purposes. But do these individuals have a responsibility to donate to charity? Should the burden of charitable giving fall more heavily on their shoulders by virtue of having more to give?

The richest 85 people in the world are as wealthy as the bottom half of the world’s population. This gap between rich and poor is still growing. With increasing globalisation, the potential for extreme wealth is increasing rather than diminishing, as is the gap between rich and poor.

The morality of wealth

Western views on the morality of wealth and philanthropy are heavily influenced by Christian thought. In brief, it could be claimed that the Christian view, at least from a Biblical perspective, promotes modest accumulation of wealth in order to provide for necessities, but hoarding excess wealth is seen as a burden and even a sin.

Carnegie had made an enormous fortune predominantly in the steel industry, becoming one of the wealthiest US businessmen of the 19th century. Instead of despairing of the increasing inequality between the rich and poor, his essay promotes the widening gap as something to be for the most part welcomed because of the improvements it brings to society as a whole.

Carnegie discusses three methods by which surplus wealth can be disposed of:

  1. He is most dismissive of the first, which involves leaving wealth to the individual’s family members. Aside from providing for children in moderation, it is not the welfare of children, but family pride, which Carnegie believes inspires these enormous legacies.
  2. Carnegie’s second mode is for an individual to leave wealth for public uses on his death. Although such bequests are not without some benefit to society, Carnegie points out that, in order to be of real benefit, the donation requires the exercise of no less ability than that which acquired the wealth.
  3. The third (and Carnegie’s favoured) option is an “ideal state” in which the rich distribute their surplus wealth for the public good during their lifetimes. He does not recommend distributing sums in small quantities, as this leads to inefficiencies and waste, but instead suggests supporting a larger project such as a research institute or library, which has the potential to have a greater effect. Crucially, he notes that the greatest good would be found in using the wealthy individual’s experience and abilities to devote years to administering these great sums in the donor’s lifetime. A rich person’s moral duty, in Carnegie’s view, is thus to live modestly, provide moderately for his dependants, and administer all surplus wealth in the manner which produces the most beneficial results for the community.

What is the responsibility of wealth?

With great wealth does come responsibility, but that responsibility cannot be objectively defined. Individuals’ attitudes towards the creation, accumulation and disposal of wealth will depend on their cultural, social and family influences, their religious affiliation (if any), and the social welfare available where they live and generate their wealth (which will have an impact on the taxes they pay). Each person will (and should) develop their own philosophy based on these influences, together with their own views and the guidance available to them.

There are, however, certain important truths. Although not greatly discussed in the Gospels or Carnegie’s article considered above, the way in which extreme wealth is generated cannot be ignored. Firstly, there is a responsibility to generate wealth without exploiting the people who help generate it. This is achieved by paying workers a living wage and/or providing them with schooling, housing and medical care. The Peabody and Cadbury families were early proponents of such social industrialism. This is a controversial responsibility which many wealthy people fail to respect: Carnegie himself is accused of exploiting his workers. Secondly, there is a responsibility to generate wealth without unsustainably damaging the environment. This is a modern responsibility: the 19th century steel barons did not show particular concern towards the environment (and indeed few people did in the 19th century).

Further, certain significant themes emerge:

  • Accumulating excessive wealth as an end in itself, without any higher goal such as philanthropy, is morally disappointing.
  • Once wealth has been acquired, it is more efficient and fulfilling to give it away while the wealth generator is alive so his or her skills and determination can be applied to achieving the greatest impact.
  • Leaving excessive wealth to children so that they have no need – nor perhaps even desire – to work is unkind. Leaving wealth to children in a way that results in disputes and litigation is especially unkind.