Born in New York City, he graduated from Princeton University before serving in the United States Marine Corps during World War II. After the war, Shultz earned a PhD in industrial economics from the Massachusetts Institute of Technology (MIT). He taught at MIT from 1948 to 1957, taking a leave of absence to take a position on President Dwight D. Eisenhower's Council of Economic Advisers. After serving as dean of the University of Chicago Graduate School of Business, he accepted President Richard Nixon's appointment to the position of United States Secretary of Labor. In that position, he imposed the Philadelphia Plan on construction contractors that refused to accept black members, marking the first use of racial quotas by the federal government. In 1970, he became the first Director of the Office of Management and Budget, and he served in that position until his appointment as United States Secretary of the Treasury in 1972. Shultz supported the Nixon shock, which sought to revive the ailing economy in part by abolishing the gold standard. He also presided over the end of the Bretton Woods system.
Schultz left the Nixon administration in 1974 to become an executive with Bechtel. After becoming president and director of that company, he accepted President Ronald Reagan's offer to serve as the United States Secretary of State. He held that office from 1982 to 1989. Shultz pushed for Reagan to establish relations with Soviet leader Mikhail Gorbachev, which led to a thaw between the United States and the Soviet Union. He opposed the U.S. aid to the Sandinistas which led to the Iran–Contra affair.
Shultz retired from public office in 1989 but remained active in the business and political world. He served as an informal adviser to George W. Bush and helped formulate the Bush Doctrine of preemptive war. He served on the Global Commission on Drug Policy, California Governor Arnold Schwarzenegger's Economic Recovery Council, and on the boards of Bechtel and the Charles Schwab Corporation. He is a member of the Hoover Institution, the Institute for International Economics, the Washington Institute for Near East Policy, and other groups. Since the death of William Thaddeus Coleman Jr., Shultz is the oldest living former U.S. Cabinet member.
Shultz was born in New York City, the only child of Margaret Lennox (née Pratt) and Birl Earl Shultz, and grew up in Englewood, New Jersey. His great-grandfather was an immigrant from Germany who arrived in the United States in the middle of the 19th century. Contrary to common assumption, Shultz is not a member of the English American Pratt family, associated with John D. Rockefeller and the Standard Oil Trust.
In 1938, Shultz graduated from the elite private preparatory boarding high school, Loomis Chaffee School in Windsor, Connecticut. He earned a bachelor's degree, cum laude, at Princeton University, New Jersey, in Economics with a minor in Public and International Affairs. His senior thesis examined the Tennessee Valley Authority's effect on local agriculture, for which he conducted on-site research, and he graduated with honors in 1942.
From 1942 to 1945, Shultz was on active duty in the U.S. Marine Corps. He was an artillery officer, attaining the rank of captain. He was detached to the U.S. Army 81st Infantry Division during the Battle of Angaur (Battle of Peleliu).
In 1949, Shultz earned a Ph.D. in industrial economics from Massachusetts Institute of Technology.
From 1948 to 1957, Shultz taught in the MIT Department of Economics and the MIT Sloan School of Management, with a leave of absence in 1955 to serve on President Dwight Eisenhower's Council of Economic Advisers as a Senior Staff Economist. In 1957, Shultz joined the University of Chicago Graduate School of Business as a Professor of Industrial Relations.
From 1962 to 1969, he was a Professor of Economics at MIT and the University of Chicago, serving as Dean of the University of Chicago Graduate School of Business. While at Chicago, he was influenced by Nobel Laureates Milton Friedman and George Stigler, who reinforced Shultz's view of the importance of a free-market economy.
Shultz was President Richard Nixon's Secretary of Labor from 1969 to 1970. He soon faced the crisis of the Longshoremen's Union strike. The Lyndon B. Johnson Administration had delayed it with a Taft Hartley injunction that expired, and the press pressed him to describe his approach. He applied the theory he had developed in academia: he let the parties work it out, which they did quickly. He imposed the Philadelphia Plan requiring Pennsylvania construction unions, which refused to accept black members, to admit a certain number of blacks by an enforced deadline. This marked the first use of racial quotas in the federal government.
Shultz was Nixon's unofficial ambassador to the AFL-CIO.
Shultz became the first director of the Office of Management and Budget, the renamed and reorganized Bureau of the Budget, on July 1, 1970. Overall, he was the 19th director to lead the agency.
He was United States Secretary of the Treasury from June 1972 to May 1974. During his tenure, Shultz was concerned with two major issues: the continuing domestic administration of Nixon's "New Economic Policy," begun under Secretary John Connally (Shultz privately opposed its three elements), and a renewed dollar crisis that broke out in February 1973.
Domestically Shultz enacted the next phase of the NEP, lifting price controls begun in 1971. This phase was a failure, resulting in high inflation, and price freezes were reestablished five months later.
Meanwhile, Shultz's attention was increasingly diverted from the domestic economy to the international arena. He participated in an international monetary conference in Paris in 1973, which grew out of the 1971 decision to abolish the gold standard, a decision that Shultz and Paul Volcker had supported (see Nixon Shock). The conference formally abolished the Bretton Woods system, thereby causing all currencies to float. During this period Shultz co-founded the "Library Group," which became the G7. Shultz resigned shortly before Nixon to return to private life.
In 1974, he left government service to become executive vice president of Bechtel Group, a large engineering and services company. He was later its president and a director.
Under Shultz's leadership, Bechtel received contracts for many large construction projects including from Saudi Arabia. In the year before he left Bechtel, the company reported a 50% increase in revenue.
Shultz is one of only two individuals to serve in four United States Cabinet positions within the United States government, the other being Elliot Richardson.
On 16 July 1982, he was appointed by President Ronald Reagan to serve as the sixtieth U.S. Secretary of State, replacing Alexander Haig, who had resigned. Shultz would serve for six and a half years – the longest tenure since Dean Rusk. The possibility of a conflict of interest in his position as Secretary of State due to being in the upper management of the Bechtel Group was raised by several senators during the confirmation hearings. Shultz briefly lost his temper in response to some intense questions on this subject but was nevertheless unanimously confirmed by the Senate.
Shultz relied primarily on the Foreign Service to formulate and implement Reagan’s foreign policy. By the summer of 1985, Shultz had personally selected most of the senior officials in the Department, emphasizing professional over political credentials in the process. The Foreign Service responded in kind by giving Shultz its "complete support," making him the most popular Secretary since Dean Acheson and, along with Acheson and George Marshall, one of the most admired Secretaries in the 20th century. Shultz's success came from not only the respect he earned from the bureaucracy but the strong relationship he forged with Reagan, who trusted him completely.
Shultz inherited negotiations with China over Taiwan from his predecessor. Under the terms of the Taiwan Relations Act, the United States was obligated to assist in Taiwan's defense, which included the sale of arms. The Administration debate on Taiwan, especially over the sale of military aircraft, resulted in a crisis in relations with China, which was alleviated only in August 1982, when, after months of arduous negotiations, the United States and China issued a joint communiqué on Taiwan in which the United States agreed to limit arms sales and China agreed to seek a "peaceful solution."
By the summer of 1982, relations were strained not only between Washington and Moscow but also between Washington and key capitals in Western Europe. In response to the imposition of martial law in Poland the previous December, the Reagan administration had imposed sanctions on a pipeline between West Germany and the Soviet Union. European leaders vigorously protested sanctions that damaged their interests but not U.S. interests in grain sales to the Soviet Union. Shultz resolved this "poisonous problem" in December 1982, when the United States agreed to abandon sanctions against the pipeline, and the Europeans agreed to adopt stricter controls on strategic trade with the Soviets.
A more controversial issue was the NATO Ministers’ 1979 "dual track" decision: if the Soviets refused to remove their SS-20 medium range ballistic missiles within four years, then the Allies would deploy a countervailing force of cruise and Pershing II missiles in Western Europe. When negotiations on these intermediate nuclear forces (INF) stalled, 1983 became a year of the protest. Shultz and other Western leaders worked hard to maintain allied unity amidst popular anti-nuclear demonstrations in Europe and United States. In spite of Western protests and Soviet propaganda, the allies began deployment of the missiles as scheduled in November 1983.
US-Soviet tensions were raised by the announcement in March 1983 of the Strategic Defense Initiative, and exacerbated by the Soviet shoot-down of Korean Air Lines Flight 007 near Moneron Island on September 1. Tensions reached a height with the Able Archer 83 exercises in November 1983, during which the Soviets feared a pre-emptive American attack.
Following the missile deployment and the exercises, both Shultz and Reagan resolved to seek further dialogue with the Soviets.
When President Mikhail Gorbachev of Russia came to power in 1985, Shultz advocated that Reagan pursue a personal dialogue with him. Reagan gradually changed his perception of Gorbachev's strategic intentions in 1987, when the two leaders signed the Intermediate Range Nuclear Forces Treaty. The treaty, which eliminated an entire class of missiles in Europe, was a milestone in the history of the Cold War. Although Gorbachev took the initiative, Reagan was well prepared by the State Department to adopt a policy of negotiations.
Two more events in 1988 persuaded Shultz that Soviet intentions were changing. First, the Soviet Union's initial withdrawal from Afghanistan indicated that the Brezhnev Doctrine was dead. "If the Soviets left Afghanistan, the Brezhnev Doctrine would be breached, and the principle of 'never letting go' would be violated," Shultz reasoned. The second event, according to Keren Yarhi-Milo of Princeton University, happened during the nineteenth Communist Party Conference, "at which Gorbachev proposed major domestic reforms such as the establishment of competitive elections with secret ballots; term limits for elected officials; separation of powers with an independent judiciary; and provisions for freedom of speech, assembly, conscience, and the press." The proposals indicated that Gorbachev was making revolutionary and irreversible changes.
In response to the escalating violence of the Lebanese civil war, Reagan sent a Marine contingent to protect the Palestinian refugee camps and support the Lebanese Government. The October 1983 bombing of the Marine barracks in Beirut killed 241 U.S. servicemen, after which the deployment came to an ignominious end. Shultz subsequently negotiated an agreement between Israel and Lebanon and convinced Israel to begin a partial withdrawal of its troops in January 1985 despite Lebanon's contravention of the settlement.
During the First Intifada (see Arab–Israeli conflict), Shultz "proposed ... an international convention in April 1988 ... on an interim autonomy agreement for the West Bank and Gaza Strip, to be implemented as of October for a three-year period". By December 1988, following six months of shuttle diplomacy, Shultz had established a diplomatic dialogue with the Palestine Liberation Organization, which was picked up by the next Administration.
Shultz was well known for outspoken opposition to the "arms for hostages" scandal that would eventually become the Iran Contra situation. In a 1983 testimony before the U.S. Congress, he said that the Sandinista government in Nicaragua was "a cancer in our own land mass", that must be "cut out". He was also opposed to any negotiation with the government of Daniel Ortega: "Negotiations are a euphemism for capitulation if the shadow of power is not cast across the bargaining table."
George Shultz left office on January 20, 1989.
After leaving public office, Shultz became the first prominent Republican to call for the legalization of recreational drugs. He went on to add his signature to an advertisement, published in The New York Times on June 8, 1998, entitled "We believe the global war on drugs is now causing more harm than drug abuse itself." In 2011, he was part of the Global Commission on Drug Policy, which called for a public health and harm reduction approach towards drug use, alongside other luminaries such as Kofi Annan, Paul Volcker, and George Papandreou.
Shultz was an early advocate for the presidential candidacy of George W. Bush, whose father, George H. W. Bush, had served as Reagan's vice president. In April 1998, Shultz hosted a meeting at which George W. Bush discussed his views with policy experts including Michael Boskin, John Taylor and Condoleezza Rice, who were evaluating possible Republican candidates to run for President in 2000. At the end of the meeting, the group felt they could support a Bush candidacy, and Shultz encouraged him to enter the race.
He then served as an advisor for Bush's presidential campaign during the 2000 election, and senior member of the "Vulcans", a group of policy mentors for Bush, which also included Dick Cheney, Paul Wolfowitz, and Rice. One of his most senior advisors and confidants was former Ambassador Charles Hill. Shultz has been called the father of the "Bush Doctrine", because of his advocacy of preventive war. He generally defended the Bush administration's foreign policy. He also occasionally advised Bush and his administration during his presidency, such as in a January 2006 meeting at the White House of former Secretaries of Defense and State, to discuss United States foreign policy with Bush administration officials.
In 2005, Shultz spoke out against the Cuban embargo, calling the policy towards Cuba "insane". He argued that free trade would help bring down Fidel Castro's regime and that the embargo led only to continued repression.
In 2003, Shultz served as co-chair (along with Warren Buffett) of California's Economic Recovery Council, an advisory group to the campaign of California gubernatorial candidate Arnold Schwarzenegger.
On 15 January 2008, Shultz co-authored (with William Perry, Henry Kissinger and Sam Nunn) an opinion paper in The Wall Street Journal, that called on governments to embrace the vision of a world free of nuclear weapons. The four have created the Nuclear Security Project to advance this agenda. Nunn reinforced that agenda during a speech at the Harvard Kennedy School on October 21, 2008, saying, "I’m much more concerned about a terrorist without a return address that cannot be deterred than I am about deliberate war between nuclear powers. You can’t deter a group who is willing to commit suicide. We are in a different era. You have to understand the world has changed." In 2010, the four were featured in the documentary film Nuclear Tipping Point, which discussed their agenda.
On 11 January 2011 Shultz wrote a letter to President Barack Obama urging him to pardon Jonathan Pollard. He stated, "I am impressed that the people who are best informed about the classified material Pollard passed to Israel, former CIA Director James Woolsey and former Chairman of the Senate Intelligence Committee Dennis DeConcini, favor his release".
Shultz favors a revenue-neutral carbon tax as the most economically efficient means of addressing global warming. In April 2013, he co-wrote, with economist Gary Becker, an opinion article in the Wall Street Journal which concluded that "a revenue-neutral carbon tax would benefit all Americans by eliminating the need for costly energy subsidies while promoting a level playing field for energy producers." He repeated this call in a September 2014 talk at MIT. In March 2015 Shultz wrote in The Washington Post that he recommended "level[ing] the playing field for competing sources of energy so that costs imposed on the community are borne by the sources of energy that create them, most particularly carbon dioxide," and doing so through a carbon tax which is "revenue-neutral, returning all net funds generated to the taxpayers so that no fiscal drag results and the revenue would not be available for politicians to spend on pet projects."
In April 2016, he was one of eight former Treasury secretaries who called on the United Kingdom to remain a member of the European Union ahead of the "Brexit" referendum in June.
Shultz is a leader of the Climate Leadership Council, along with Henry Paulson and James Baker.
Shultz is the Chairman of JPMorgan Chase's International Advisory Council, and an Honorary Director of the Institute for International Economics. He is a member of the Hoover Institution at Stanford University, the Washington Institute for Near East Policy (WINEP) Board of Advisors, the New Atlantic Initiative, the prestigious Mandalay Camp at the Bohemian Grove, the Committee for the Liberation of Iraq, and the Committee on the Present Danger. He serves as an Advisory Board member for the Partnership for a Secure America and Citizens' Climate Lobby.  He is honorary chairman of the Israel Democracy Institute.
Shultz formerly served on the Board of Directors for the Bechtel Corporation, Charles Schwab Corporation, and was a member of the Board of Directors of Gilead Sciences from January 1996 to December 2005. He is currently a co-chairman of the North American Forum and serves on the board for Accretive Health. He was a member of the board of directors of Theranos, a Silicon Valley biotech company, from 2011 to 2015. After media reports exposed controversial practices at the startup in 2015, following the whistleblowing efforts of Shultz' own grandson, Tyler, he moved to Theranos' Board of Counselors, where he continues to serve as of November 2016.
While serving with the Marines in Hawaii, he met military nurse lieutenant Helena Maria O'Brien (1915–1995). They married on February 16, 1946, and had five children (Margaret Ann Tilsworth, Kathleen Pratt Shultz Jorgensen, Peter Milton, Barbara Lennox Shultz White, Alexander George). Helena died in 1995 of pancreatic cancer.
In 1997, Shultz married Charlotte Mailliard Swig, a prominent San Francisco philanthropist and socialite.
His grandson, Tyler Shultz, was a whistleblower who exposed falsified lab tests at Theranos while working there, and while his grandfather George Shultz was a board member at the company.2001 – Eisenhower Medal for Leadership.
2000 – Woodrow Wilson Award for Public Service.
1996 – Koret Prize.
1992 – Seoul Peace Prize (Korea).
1992 – United States Military Academy, Sylvanus Thayer Award.
1989 – Presidential Medal of Freedom.
1989 – Order of the Rising Sun with Paulownia Flowers, Grand Cordon (Japan).
1986 – Freedoms Foundation, George Washington Medal.
1986 – U.S. Senator John Heinz Award (Jefferson Awards) For Public Service.
1970 – Fellow of the American Academy of Arts and Sciences.
Honorary degrees have been conferred from the universities of Columbia, Notre Dame, Loyola, Pennsylvania, Rochester, Princeton, Carnegie Mellon, City University of New York, Yeshiva, Northwestern, Technion, Tel Aviv, Weizmann Institute of Science, Baruch College of New York, Williams College, Hebrew University of Jerusalem, Tbilisi State University in the Republic of Georgia, and Keio University in Tokyo.Shultz, George P. and Goodby, James E. The War that Must Never be Fought, Hoover Press, ISBN 978-0-8179-1845-3, 2015.
Shultz, George P. and Shoven, John B. Putting Our House in Order: A Guide to Social Security and Health Care Reform. New York: W. W. Norton, 2008
Economics in Action: Ideas, Institutions, Policies, Hoover Institution on War, Revolution and Peace, Stanford University, 1995.
Shultz, George P. Turmoil and Triumph: My Years as Secretary of State, New York: Scribner's 1993.
U.S. Policy and the Dynamism of the Pacific; Sharing the Challenges of Success, East-West Center (Honolulu), Pacific Forum, and the Pacific and Asian Affairs Council, 1988.
The U.S. and Central America: Implementing the National Bipartisan Commission Report: Report to the President from the Secretary of State, U.S. Department of State (Washington, DC), 1986.
Risk, Uncertainty, and Foreign Economic Policy, D. Davies Memorial Institute of International Studies, 1981.
(With Kenneth W. Dam) Economic Policy beyond the Headlines, Stanford Alumni Association, 1977.
Leaders and Followers in an Age of Ambiguity, New York University Press (New York, NY), 1975.
(With Albert Rees) Workers and Wages in an Urban Labor Market, University of Chicago Press, 1970.
(With Arnold R. Weber) Strategies for the Displaced Worker: Confronting Economic Change, Harper (New York, NY), 1966.
(Editor and author of introduction, with Robert Z. Aliber) Guidelines, Informal Controls, and the Market Place: Policy Choices in a Full Employment Economy, University of Chicago Press (Chicago), 1966.
(Editor, with Thomas Whisler) Management Organization and the Computer, Free Press (New York, NY), 1960.
(Editor, with John R. Coleman) Labor Problems: Cases and Readings, McGraw (New York, NY), 1953.
Pressures on Wage Decisions: A Case Study in the Shoe Industry, Wiley (New York, NY), 1951.
(With Charles Andrew Myers) The Dynamics of a Labor Market: A Study of the Impact of Employment Changes on Labor Mobility, Job Satisfaction, and Company and Union Policies, Prentice-Hall (Englewood Cliffs, NJ), 1951.