George Shultz's father, Birl Shultz, had failed to attain a university professorship, a thwarted ambition which may have motivated George to establish himself as a scholar and academic administrator early in life, along with his parents' generally high expectations. The Great Depression and what Shultz viewed as the limited economic lift generated by Franklin Roosevelt's New Deal tilted Shultz toward a belief in free markets. Shultz's senior thesis on the Tennessee Valley Authority showed him there was a disconnect between practical and theoretical solutions to real-world challenges. At Princeton University, Shultz was a middling student known for his integrity and a passion for football. A senior year knee injury allowed him to serve as a coach for the freshman football team, his first leadership experience. Adolf Hitler ignited World War II in Europe as Shultz completed his studies. Shultz joined the marines after graduating in 1942.
Just after graduating from Princeton University, George Shultz joined the marines.
George Shultz's economics coursework at the Massachusetts Institute of Technology deepened his belief in free-market capitalism and his preference for practical over theoretical solutions to national and international challenges. Joseph Scanlon, a rough-hewn labor leader and MIT colleague, sparked a deep interest in industrial relations for Shultz, which he pursued later as Secretary of Labor under Richard Nixon. Shultz completed his dissertation on wage growth in the men's shoe industry and once again discovered the necessity of taking human nature into account when analyzing complex issues. Shultz, his wife O'Bie and his children lived in Stow, Massachusetts after Shultz was hired as an assistant professor at MIT. Soon, Shultz joined the White House Council of Economic Advisors as a staff member and made preliminary strides toward reconciling business and organized-labor leaders. Shultz then joined the University of Chicago Graduate School of Business as a full professor.
Shultz spent five years as professor at the University of Chicago Graduate School of Business before becoming its dean. His research and teaching centered around industrial relations and the economic impacts of new technologies, along with occasional counsel to the White House. His exposure to free market economists deepened his belief that reduced government regulation and intervention in the economy were essential to growth. His deanship coincided with the civil rights movements and Vietnam War protests of the 1960s, to which he responded with minority scholarships and assurances for free speech on campus, respectively. Shultz befriended a young Israeli man named Yossi Levy and was shocked at his death during the Six-Day War. Levy, he said, gave him a profound respect for Israel. Shultz and his family moved to Stanford University for a fellowship at the Center for Advanced Study in Behavioral Sciences in 1968.
Shultz served as an economic and labor relations adviser to Republican presidential candidate Richard Nixon in 1968. Once elected, Nixon selected Shultz as Secretary of Labor. Shultz's lack of political savvy soon posed challenges when he named a team of top aides, all Democrats or independents. When a longshoreman strike threatened to cripple the economy, Shultz, averse to government intervention, successfully averted the crisis by convincing Nixon to let the union and shipping companies negotiate without presidential involvement. Nixon's disinterest in domestic affairs gave Shultz an opportunity to tackle wide-ranging issues, including a restructuring of the Jobs Corps. Shultz led campaigns against racial discrimination on construction projects and other civil rights matters. He directed a successful White House effort to cajole white and black leaders in the South to desegregate public schools, one of his most important domestic achievements.
Nixon promoted Shultz to serve as the inaugural head of the Office of Management and Budget. He worked there with Caspar Weinberger, the start of a long rivalry between the two men. Shultz played a leading role in heated administration debates about whether to impose wage and price controls to tame inflation, a fight that Shultz lost twice. As Treasury secretary, Shultz delinked the value of the American dollar from gold, introducing a system of floating global exchange rates. Shultz at first resisted White House demands to sic the Internal Revenue Service on Nixon's political opponents but he allowed an investigation of Lawrence O'Brien, a leading Democrat. Despite misgivings about Nixon and alarm over the Watergate scandal, Shultz remained as Treasury secretary until three months before Nixon's own resignation, a sign of Shultz's sometimes misplaced loyalty. Shultz then joined W. A. Bechtel Company, later becoming its president.
Ronald Reagan chose Shultz as secretary of state after firing Alexander Haig in 1982, despite doubts among Reagan aides about Shultz's command of foreign policy issues. The moderate, non-ideological problem solver immediately encountered fierce resistance from an inner circle of Reagan national security aides alarmed by Shultz's impulse to try to moderate the cold war and stabilize American-Soviet relations. The group included Caspar Weinberger, the defense secretary; William Clark, the national security adviser; and William Casey, the director of central intelligence. Reagan and his team had previously made clear with aggressive rhetoric and large defense investments that they were determined to confront and even reverse Soviet foreign policy advances around the world. Faced with additional challenges in Central America, the Middle East and China, coupled with a sluggish economy and a feuding administration foreign policy team, Shultz unsuccessfully sought to establish his authority.
Shultz and Reagan had remarkably similar instincts about the Soviet Union and how to manage the cold war. Reagan's belligerent rhetoric about the Soviet Union overshadowed an underlying impulse to ease tensions that could be found from time to time in Reagan's public pronouncements. That impulse coincided with Shultz's own intuition, based on his eye-opening visits to the Soviet Union and productive interactions with Kremlin leaders during the Nixon presidency, that the cold war could be moderated. The convergence was a fortuitous alignment with the potential to reshape East-West relations—if Reagan and Shultz could spend enough time together to see how much their views overlapped and if Shultz could overcome the united front of hard-liners around the president who actively discouraged diplomatic overtures to Moscow. Reagan and Shultz also shared experiential learning styles, a fondness for storytelling, and life experiences largely outside Washington.
Shultz sailed through his Senate confirmation hearing. Within a few weeks, Shultz collided with powerful fellow cabinet members, especially Casper Weinberger and Jeane Kirkpatrick, over American policy in the Middle East. The rancorous conflict made clear that his opponents were tenacious and determined to outmaneuver him. The disputes also served as an early warning sign that the administration's foreign policy-making was broken and the president was either unwilling or unable to fix it. Shultz quickly discovered that White House aides were limiting his direct access to Reagan, but he saw no immediate solution. Shultz attained a clearer sense of the sobering implications of nuclear war during a briefing at the Pentagon. The feuding inside the administration led Shultz to consider resigning. Shultz's expansive view of the secretary of state's policy purview and his impulse to wield military power in the service of diplomacy dismayed commanders and cabinet members.
Shultz's efforts to influence relations with Moscow proved halting and frustrating. Issues requiring urgent attention included nuclear arms control talks and a proposed natural gas pipeline from Siberia to Western Europe. Shultz grew increasingly irritated by the roadblocks within the administration. His inclination to play fairly, work within organizational constraints and assume that calm deliberation and common sense would prevail in policy debates left him looking indecisive and vulnerable to the guerrilla tactics employed by his opponents. The death of Soviet leader Leonid Brezhnev opened an opportunity for a more conciliatory relationship with the country. Shultz's trip to Moscow for the funeral included a meeting with Brezhnev successor Yuri Andropov, who seemed also to desire better relations. Shultz's prediction of an economically powerful China in the coming decades convinced him that the United States and China needed to improve their relationship.
A February 1983 blizzard paralyzed Washington, clearing the Reagans' weekend schedule. Nancy Reagan invited George and O'Bie for dinner at the White House, an occasion that proved pivotal for George's relationship with the president. Shultz and Reagan discussed their shared opinions on handling the Soviet Union, and their meeting enhanced Shultz's access to the president and his authority within the administration. Their conversation was the product of Nancy Reagan's skillful social diplomacy and Shultz's careful cultivation of his relationship with the First Lady. The president agreed with Shultz that he should speak with Soviet Ambassador Anatoly Dobrynin in the White House, which sparked consternation among hard-liners within the administration. Shultz, Reagan and Dobrynin discussed improving American-Soviet relations, human rights and the Pentecostal believers who sought refuge at the American embassy in Moscow, among other topics. The developments encouraged Shultz, but divisions within the administration continued to bedevil him.
Instead of quieting dissension within the administration, the Reagan-Dobrynin meeting set off a new round of internal warfare over Soviet policy, deepening Shultz's doubts about Reagan's willingness to end the bickering. Shultz's hopes of talking privately again with Reagan were shattered at a White House meeting with the president about Soviet policy attended by numerous aides, most opposed to Shultz's desire to defrost the cold war. Reagan himself startled Shultz when he called the Soviet Union "an evil empire" in a speech to evangelical Christians. Yet, as earlier, Shultz seemed paralyzed by his deference to organizational structures, particularly the role of the National Security Council staff led by William Clark. He hesitated when Michael Deaver, White House deputy chief of staff, renewed his invitation to put Shultz together privately with Reagan on a weekly basis. A plan to polygraph senior administration officials, including the secretary of state, upset Shultz.
Reagan's unveiling of the Strategic Defense Initiative, a proposed space shield to protect the United States against nuclear-tipped missiles, stunned Shultz, who was not included in planning discussions about the project. Shultz immediately recognized that the idea was fanciful. He fought hard but unsuccessfully to dissuade Reagan. Then, to the dismay of his State Department colleagues, he reversed course after Reagan unveiled the plan, enthusiastically backing the project and telling his aides to do the same or quit. The crisp about-face reflected Shultz's strong belief in loyalty. Within days of the Reagan speech, Shultz confronted a new wave of resistance to his diplomatic leadership, leaving him more dispirited than ever. And yet he remained reluctant to force a showdown with Clark and demand that Reagan either back his secretary of state or get a new one.
Hard-liners within the administration went around Shultz and received Reagan's blessing to increase covert support for efforts to overthrow the leftist government of Nicaragua and prop up the friendly government of El Salvador. Later, Shultz discovered that White House aides were undoing Reagan's and his own personnel decisions, and that national security officials continued to make foreign policy decisions without him. News reports about substantial increases in American military involvement in Central America and the White House dispatch of a secret diplomatic envoy to the Middle East blindsided and infuriated Shultz, who threatened to resign. News coverage emphasized Shultz's loss of influence on foreign policy decisions. Nancy Reagan, concerned about her husband's image, was troubled by accounts of William Clark's growing influence. She complained to Clark. Vice President Bush phoned Shultz to signal his support, and Mike Deaver arranged a weekly Reagan-Shultz lunch that would not include Clark.
The Soviet attack on Korean Airlines flight 007, killing 240 passengers and 29 crew members, including a member of the House of Representatives, stunned Washington. Emboldened by his showdown with Reagan over Central America policy, fed up with the foreign policy disputes and sensing that Reagan's impulse to improve relations with Moscow would give him cover, Shultz cast aside his hesitation and secured Reagan's support for a tempered response, overcoming opposition from administration hard-liners. Shultz's rivals remained formidable opponents, and a renewed plan to polygraph top officials irritated Shultz, but his clout within the administration was enhanced. His prospects improved even more when Reagan removed Clark as national security adviser. Shultz maneuvered to prevent Jeane Kirkpatrick from replacing Clark and thought James Baker, the White House chief of staff, would get the job. Reagan selected Robert "Bud" McFarlane, who seemed likely to be more supportive of Shultz than Clark.
The first series of suicide terrorist attacks by Islamic fundamentalist extremists in 1983 caught the Reagan administration unprepared. The targets of the first attacks in Lebanon, the American embassy and a Beirut building housing hundreds of US Marines, were flimsily secured. The administration struggled to come up with an effective response. Tensions flared between Shultz, who favored a military response, and Weinberger, who did not. A mighty armada was assembled in the eastern Mediterranean, and strike plans were set to launch. But none were activated because of indecision in Washington. Reagan ordered an airstrike, but Weinberger called it off at the last minute. The decision shocked Shultz, who was profoundly discouraged by Washington's tepid response to terrorism. Ignoring his impulse to shield policy conflicts from public view, he openly challenged the administration's hesitation in appearances that exacerbated the divisions in the administration and drew a rebuke from Vice President Bush.
Shultz spent much of his time dealing with policy skirmishes on a variety of international issues, at times wondering again if he should resign, yet hoping a Reagan second term would give new impetus to diplomacy with the Kremlin. Reagan's support for an invasion of Grenada signaled support for flexing American military muscle. NATO war games spooked the Kremlin, which misinterpreted them as a prelude to an attack. The installation of nuclear-tipped intermediate-range missiles in West Germany demonstrated NATO resolve, leading the Kremlin to temporarily suspend arms control talks. Deteriorating conditions in Lebanon left Shultz isolated within the administration in his support for the existing Lebanon peace plan and for American military presence in Lebanon. The death of Yuri Andropov and appointment of the aging Konstantin Chernenko as Kremlin leader left Washington uncertain about Kremlin intentions. News reports that Shultz's influence was dwindling undermined his standing in Washington.
After Chernenko's death in March 1985, Shultz quickly recognized that Chenenko's young, dynamic successor, Mikhail Gorbachev, could be the key to modulating the cold war. Discarding another impulse to resign, he navigated through continuing resistance from Weinberger, Casey and others, skillfully guiding Reagan toward a meeting with Gorbachev, Reagan's first summit with a Soviet leader. As Reagan himself sensed the peacemaking possibilities, he gave Shultz increased latitude. Shultz got a major assist when Gorbachev appointed Eduard Shevardnadze as foreign minister. The killing of Major Arthur Nicholson Jr., an American soldier on duty in East Germany under a postwar agreement, by a Soviet sentry angered Reagan administration hard-liners, while Shultz urged restraint. Disputes over Reagan's proposed space defense system and plans for a Geneva summit between Reagan and Gorbachev roiled cabinet members. Robert "Bud" McFarlane warned Reagan that the feuding between Weinberger and Shultz was producing paralysis in the administration.
During a visit to Moscow to prepare for the Geneva summit, Shultz presciently told Gorbachev the information age was dawning and described the drawbacks of a planned economy. The November summit began warmly, although the two men vigorously debated a range of issues. Gorbachev and Reagan agreed to hold two additional meetings in their respective capitals. The two sides agreed that "a nuclear war cannot be won and must never be fought." Statements after the discussions revealed modest agreements on safety for commercial aircraft in the North Pacific and a commitment to further talks on topics like arms issues. Shultz later regarded the meeting as a turning point in relations with the Kremlin, and his glowing reception in Washington following the summit signaled a changing tide in the Secretary of State's influence in and out of the administration.
The Chernobyl Nuclear Power Plant explosion in April 1986 deeply unsettled Gorbachev and renewed alarm among Gorbachev, Reagan and Shultz about the risks of nuclear war. Weinberger, Reagan and Shultz agreed to limit research on SDI for five years. Competing administration initiatives on foreign policy issues pushed Shultz to again draft a resignation letter, which Reagan refused to accept. The arrest of Nicholas Daniloff, an American reporter in Moscow, led to a sudden spike in tensions that Shultz and Shevardnadze resolved. Gorbachev's proposal for a snap summit in Reykjavik created a new opportunity for improvement. In Iceland, Reagan, Shultz, Gorbachev and Shevardnadze traded far-reaching arms reduction proposals, momentarily agreeing to abolish nuclear weapons. The talks collapsed without reaching agreement but opened the way for eventual elimination of intermediate-range nuclear forces in Europe and western regions of the Soviet Union. The leaders' discussion about nuclear weapons angered American allies.
Reagan's support for a misguided White House-managed effort to secure the release of American hostages in the Middle East in exchange for Israeli sales of American arms to Iran mushroomed into the explosive Iran-Contra scandal when administration officials secretly funneled profits from the arms sales to American-supported guerilla forces in Nicaragua. Despite Shultz's assertions that he was unaware of the extent of the arms-for-hostages operation, contemporaneous notes show he knew a good deal and initially stopped short of trying to block the effort. Shultz was stunned by Reagan's support for the exchange. Shultz's confession that he was not speaking for the administration during an interview on Face the Nation ignited speculation that he would be fired and ignited efforts by Casey to get Reagan to replace Shultz. After Reagan discovered the diversion to the Contras, he made peace with Shultz and agreed he should stay.
Shultz, Gorbachev and Shevardnadze met in Moscow to continue unresolved talks from Reykjavik. While Shultz's critics convinced Reagan to reduce his negotiating latitude, the visit featured developments in the American-Soviet relationship, including Shultz's attendance at a seder with Russian Jews. Gorbachev announced he was ready to eliminate all Soviet weapons in range of Western Europe if the United States would withdraw its own missiles from the region, but Shultz, constrained by Reagan, could not agree on the spot. The Secretary of State reopened a discussion with Gorbachev about the implications of new information technologies. Shultz's influence in the administration grew as Casey was sidelined and eventually died from a brain tumor and Weinberger retired. After Washington and Moscow reached agreement to eliminate intermediate-range nuclear forces, Gorbachev traveled to Washington to sign the accord. Washingtonians welcomed Gorbachev as a global rock star, lining the streets to cheer his motorcade.
Shultz played a constructive role in diplomatic talks that ended the Soviet occupation of Afghanistan. With Weinberger and Casey gone, and the NSC staff now directed by Colin Powell, the friction that had plagued the administration largely dissipated. Shultz reached the apex of his influence as the Reagan presidency headed into its final year and Reagan visited Moscow for a summit that radiated friendship. Reagan's late-May visit, the first by an American president since Richard Nixon's 1974 Kremlin rendezvous with Leonid Brezhnev, reflected the arc of Reagan's Soviet odyssey from anti-Communist crusader to Kremlin friend. In December 1988, Reagan and Shultz held a final, brief meeting in New York with Gorbachev and president-elect George H. W. Bush. Before leaving office, Reagan awarded Shultz with the Medal of Freedom.
After leaving Washington, Shultz devoted himself to writing a memoir, campaigning for the abolition of nuclear weapons and responding to international and domestic crises as a private citizen. Shultz married San Francisco socialite and philanthropist Charlotte Mailliard Swig following O'Bie's death from pancreatic cancer in 1995, and together they became one of the Bay Area's most prominent couples. The former Secretary of State also participated in informal diplomatic talks with foreign leaders, warned about Vladimir Putin's desire to restore portions of the Soviet empire and pushed for a carbon tax to help combat global warming. Shultz's enthusiastic support of Theranos and his fondness for Elizabeth Holmes led to frictions and heartbreak within his family after his grandson Tyler disclosed blew the whistle on Holmes's fraudulent activities at Theranos, where he worked, and Shultz failed to stand by his grandson. The family rift lingered when Shultz died on February 6, 2021.