After His Bequest to Boost the Laboring Class, Ben Franklin Would be Shocked by Today's "Innovation" Economy

Shortly before he died in April 1790, Benjamin Franklin added a final inventive stroke to his legacy. At a time when the demise of the United States seemed more likely than its success—the banking system was fledgling and the dollar so unstable that it had yet to be made the official currency — Franklin placed a bet on the class of workers whose continued prosperity he felt crucial to the survival of the United States.

The son of a candlemaker, himself an industrious printer and inveterate tinkerer, believed that the “leather-apron class” formed the foundation of American democracy. “Good apprentices,” the ailing Franklin added to the end of his will (which was a thrill to hold, at Philadelphia’s American Philosophical Society) “are most likely to make good citizens.” He knew that the people we today call blue-collar workers provided essential services while interacting daily with people of different classes and creeds. They took the pulse of street-level political and economic life and laid the groundwork of a healthy society. They also lacked economic self-sufficiency. “Strange,” Poor Richard noted, in an observation still relevant today, “that he who lives by Shifts, can seldom shift himself.”

The industrious Franklin would stake his fellow tradesmen from the grave. Pointedly refusing to leave money to the gentrified college he founded—today’s University of Pennsylvania—because it had strayed from his leveling vision of providing a practical education, our founding philanthropist instead left Boston and Philadelphia £1,000 (equivalent to about $136,000 today, but then with a purchasing power of millions), to be lent in small amounts to help skilled workers open their own businesses. Borrowers were to repay the loans within ten years, at a below-market annual interest rate of 5 percent. Although the term would not be coined for another two centuries, Franklin’s inventive scheme was a forerunner of microfinance.

Franklin understood how a small amount of seeding could multiply into a forest of green. The secret was patience: even a low rate of return, when compounded annually, would create a windfall (Warren Buffett, a modern adherent of this strategy, calls it the Methuselah Technique). In his will, he predicted that after one hundred years, his fund would grow to £131,000. His twin hometowns were to spend the bulk of the money on “public works, which may be judged of most general utility to the inhabitants.”

After over a decade of disputes, Boston used its gift to build the Franklin Union trades school. The project only got off the ground in 1904 after Andrew Carnegie, impressed by Franklin’s far-seeing bequest, declared, “I’ll match Ben Franklin.” He did so to the penny, sending the city $408,396.48. Later, Carnegie credited “my teacher, Franklin” as the inspiration for his philanthropic giving. Franklin likely would have liked this outcome; he counted the matching grant—designed to fund the construction of the Pennsylvania Hospital—among his favorite inventions. After fending off claims to the money from Franklin’s disappointed descendants, Philadelphia eventually used his cash to build the Franklin Institute science museum.

Franklin’s will stipulated that the remaining portion of his fund be loaned to tradesmen for yet another century. On the bicentennial of his death, he expected a jackpot running into the tens of millions, to be cashed out and spent by Americans of the 1990s. Franklin not only expected his borrowers to repay their loans in full, but he also ordered that the scheme be managed for free, by professionals eager to help “the rising generation.” This bequest showed an uncharacteristically optimistic bent in the usually pragmatic founder. “Blessed is he that expects nothing,” said Poor Richard, “for he shall never be disappointed.”

Surprisingly, given the swings in the nation’s fortunes between the eighteenth and twentieth centuries, Benjamin Franklin’s bet did pay off, although not in the manner, or with the results, that he had predicted. Boston and Philadelphia in turn adhered to and ignored Franklin’s vision against a backdrop of technological revolutions, civil and world wars, defaulting borrowers, market crashes, political venality, the invention of the investment bank, and—this being an American story—lawsuits. Although one city’s final sizable pay-out far outpaced the other’s, Franklin’s money remarkably remains in play today, funding skilled job training for young men and women. Most are minorities, or, like his own family, immigrants who bet that a better future awaited them in America.

In London, Franklin once opened a bottle of Madeira sent from Philadelphia and was shocked, and delighted, to see several small flies roused from their stupor and buzz away. He wished that humans could be embalmed this way, as he had “an extreme desire to see the state of America one hundred years from now.” If we uncorked a cask and poured out an embalmed Benjamin  Franklin today, what would he make of the state of the country he helped found? Before we allowed him to watch cable news or look at Twitter — imagine explaining all of that to him— we could ease Franklin back by recounting the outcome of his dying bequest. 

He would likely be unsurprised to see that his hometowns remain hives of commerce and learning, enlivened by an admixture of natives, transplants, and immigrants. Would he be cheered to hear about the rapid evolution of American philanthropy? Or would Franklin be stunned to discover that the nation’s nonprofit organizations now employ more people than its manufacturers?

Franklin might ask if these modern — what is the word, “billionaires?”— rely on a workforce of tradesmen whose salaries anchor them securely within the middle class. We would have to explain to him the “new economy,” along with other additions to his friend Noah Webster’s English dictionary, including unskilled labor, a living wage, and service sector, where 71 percent of Americans earn their living. Franklin loved words, and I suspect he would notice that the terms gig worker, self-employed, and independent contractor sound liberating but obfuscate the fact that these positions — anticipated to comprise half the American workforce by 2028 — free employers from paying benefits. I doubt that his reaction to this “new normal” would be as blithe as a laugh-cry emoji.

Franklin would likely be shocked to learn that the United States has an abundance of four-year degree programs (and associated student debt) but an acute shortage of skilled workers. Where is the political will to reverse this trend? Franklin proudly counted himself a tradesman. Imagine his spit-take of wine upon hearing that today, less than 2 percent of Congress members have ever held a working-class job. As with the lessons from his life, Benjamin Franklin’s death has much to teach us still.