George P. Shultz

American secretary of state (1982-1989)

• Born: December 13, 1920
• Birthplace: New York, New York

Shultz served as a high-level policy maker in the Departments of Labor and the Treasury, as director of the Office of Management and Budget, and as secretary of state during the momentous last years of the Cold War.

Early Life

George P. Shultz was the only child of Birl and Margaret Schultz. His father was employed at the New York Stock Exchange. As a child, Shultz's father would show him the exchange's inner workings. The young Shultz’s early exposure to economic institutions would influence his interest in the fields of economics and government.

The Shultz family moved to Englewood Cliffs, New Jersey, when Shultz was still a young boy. He lived at home until his enrollment at Princeton University. At Princeton, Shultz pursued a degree in economics and a minor in public and international affairs, fields in which he would eventually make substantial contributions during his professional career. Shultz completed his undergraduate work in 1942. He was subsequently accepted into the master’s degree program in industrial economics at the Massachusetts Institute of Technology (MIT) in 1943, but his schooling was interrupted by a tour of duty with the US Marine Corps during World War II. Shutlz served in the Pacific theater from 1943 to 1945, attaining the rank of captain.

After the war Shultz resumed studies at MIT and completed his Ph.D. in 1949. He also married nurse-lieutenant Helena Maria “Obie” O’Brien, whom he met during his service in the Pacific. The could had five children. After O’Brien’s death in 1997, Shultz married Charlotte Malliard Swig.

Life’s Work

As Shultz neared completion of his doctoral work, he began teaching in the Economics Department at MIT. He also taught at MIT’s Sloan School of Management and authored several books on economic subjects. In 1955 he took his first government position as a staff analyst with US president Dwight D. Eisenhower’s Council of Economic Advisers. In 1957, Shultz moved to the University of Chicago, where he taught industrial relations and served as dean in the Graduate School of Business.

In 1969, Shultz once again answered the call to public service, entering the administration of President Richard M. Nixon as secretary of the Department of Labor. In 1970 he assumed the directorship of the Office ofManagement and Budget, then served as secretary of the treasury from 1972 to 1974. In these various capacities, but especially at the Treasury Department, Shultz was involved in the Nixon administration’s initiative to restructure the global monetary system, including the removal of the dollar from the gold standard and the move to a system of floating exchange rates to replace the postwar Bretton Woods system of fixed exchange rates tied to the US dollar backed by gold.

Shultz left government in May 1974, to become president and director of Bechtel Corporation, where he worked until 1982. While gaining important private sector experience, Shultz also held the post of professor of management and public policy at Stanford University from 1974 to 1982.

As a seasoned academic, policymaker and business executive, Shultz remained a prominent voice in Republican circles. When President Ronald Reagan needed a secretary of state following the resignation of Alexander Haig in 1982, he turned to Shultz, who agreed to serve as his chief adviser on matters of foreign policy. Shultz took this important post as secretary of state at a time of confusion and conflict within not only the Reagan administration but also around the world.

The Reagan administration saw disputes between the National Security Council apparatus and the State Department, which figured in Haig’s departure. Globally, the era of détente was giving way to renewed Cold War tensions. Shultz, a pragmatist and seasoned manager, recognized that he needed to gain Reagan’s confidence in order to emerge as the central figure in the foreign policy arena. At the same time, he assembled a new foreign policy team of loyal lieutenants and holdovers from Haig’s tenure, to put his own stamp on management of the State Department while ensuring a degree of continuity.

Shultz agreed with Reagan that the communist system was morally and economically bankrupt, and that the United States should reassert itself on the global stage after nearly a decade of national self-doubt following the Vietnam War, the Watergate scandal, and partisan bickering over the global role of the United States. Shultz and Reagan were in substantial agreement over these concerns, as they were on the chief means by which the United States should reassert global leadership, namely to rebuild the military’s conventional and nuclear weapons capabilities, and its morale. In addition, Shultz believed that the United States should be ready to use its economic might and military muscle to oppose Soviet expansionism; support opponents of communism throughout the world, including the so-called freedom fighters; and promote without embarrassment the free enterprise system as the only successful option for global economic development. In this effort to renew and apply American power, Shultz saw real value in the role of diplomacy but diplomacy from strength to resolve many difficult conflicts in the Middle East, Asia, Africa, and Central America.

Although these policy ideas elicited substantial congressional and media opposition, Shultz served as a loyal captain of foreign policy for Reagan, insisting that a patient and firm resistance of the Soviet Union and of communist expansionism in Asia, Africa, and Central America would eventually yield results and it ultimately did. Although Shultz’s record included both successes and setbacks in resolving disputes, his own personal integrity and his instincts on policy generally prevailed.

Shultz was one of a few Reagan administration officials who survived the Iran-Contra scandal unscathed. On matters of policy, the Reagan-Shultz approach of showing military strength and pressuring the Soviet Union eventually was vindicated, as Soviet leader Mikhail Gorbachev would come to realize his country could no longer sustain a global military in competition with the United States. The collapse of Soviet communism in the late 1980s and early 1990s can be traced in part to the determined, calm, and steady work of Reagan and Shultz, who convinced the Soviets that they could not win the nuclear and conventional arms races nor could they successfully destabilize pro-Western regimes, in light of their own economic weakness.

Shultz left office in January 1989 at the end of the Reagan administration. Shultz returned to academia as a fellow of the Hoover Institution at Stanford University and returned to the private sector as a board member of Bechtel. He continued to play an important role as an elder statesman in both national and California politics, and he was an important mentor to Condoleezza Rice, who became the first woman to become national security adviser and secretary of state. In 2012, he was awarded the Henry A. Kissinger Prize by the American Academy in Berlin.

Significance

The tumultuous 1980s, marked by divided government in the United States and by momentous developments in international relations, served as the backdrop for Shultz’s most significant contributions to American politics and to world affairs. As leader of Reagan’s foreign policy team, Shultz laid the groundwork for the revitalization and application of American power. His political and economic insights were instrumental in the reshaping of the world political landscape that began during his tenure as secretary of state and continued into the 1990s and the new millennium.

The growth of American power, the emergence of widespread political democratization and economic liberalization, and the advancement of international economic globalization were outcomes reflected in the primary goals of Shultz’s tenure as secretary of state. All these successes opposed communism and Soviet expansionism. Shultz, however, was modest about claims that the Reagan administration brought an end to communism. He recognized that the policy of containment was the work of several decades and numerous administrations, including those of American allies. However, the collapse of communism gathered momentum during the late 1980s, near the end of his tenure.

Although these developments in global politics did not blossom fully until after his years in office, Shultz nevertheless could rightly claim the status of a key player in bringing down Soviet communism. During his time in office, the reach of American power and influence remained uncertain and was widely debated. Following his tenure, much of that uncertainty abated in light of the fall of Berlin Wall and Soviet communism. Shutlz published his memoir regarding his tenure as secretary of state, entitled Turmoil and Triumph, in 2010. Shultz published Issues on My Mind in 2013. The book features Shultz's views on the American economy after the Great Recession, nuclear proliferation, and the role of United States in the world.

Bibliography

Krauthammer, Charles. Things That Matter: Three Decades of Passions, Pastimes, and Politics. New York: Crown Publishing Group, 2013.

Loth, Wilfried. Overcoming the Cold War: A History of Détente, 1950-1991. New York: Palgrave, 2002. A thoroughly researched examination of the Cold War, how it was contained, and finally overcome.

Powaski, Ronald E. Return to Armageddon: The United States and the Nuclear Arms Race, 1981-1999. New York: Oxford University Press, 2000. Discussion of the arms race at its height during Shultz’s tenure. Includes extensive attention to disarmament talks between the United States and the Soviet Union.

Shultz, George P. Issues on My Mind. Stanford: Hoover Institution Press, 2013.-

Shultz, George P. Turmoil and Triumph: Diplomacy, Power, and the Victory of the American Deal.New York: Scribner, 2010.

Shevardnadze, Eduard. The Future Belongs to Freedom. London: Sinclair-Stevenson, 1993. In these memoirs, Shevardnadze, former Soviet foreign minister, describes his admiration for Shultz, with whom he developed a working relationship during days of intense US-Soviet competition.

Shultz, George P. Turmoil and Triumph: My Years as Secretary of State. New York: Scribner’s, 1993. Shultz offers the most detailed account of his tenure as secretary of state during the Reagan era. A lengthy but readable book full of inside accounts on the momentous developments in international relations during the 1980’s.