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The American college and university changed dramatically in the decades around the turn of the twentieth century. Many of these changes can be described as part of a process of rationalization, as per Max Weber. One of the drivers of this process was the strategic philanthropy of wealthy industrialists, who used their gifts to reshape both individual institutions and the higher education system as a whole. This paper uses Andrew Carnegie as a case study to show the evolution of one industrialist from a critic of American higher education who oriented his philanthropy elsewhere to an ardent supporter of the system. Carnegie administered his largesse strategically in ways that helped bring about the rationalization of American colleges and universities.