In 1962, George Shultz, an ex-US Marine and Princeton- and MIT-educated economics high-flyer, was appointed dean of the University of Chicago Graduate School of Business, where he was a professor of industrial relations. Periodically, he’d hold a reception for the outstanding students who’d made the dean’s list. Every time, one of those outstanding students was a young Israeli named Joseph Levy.

Looking back over more than 50 years, Shultz — who would go on to serve in the Nixon administration as Labor and Treasury secretary, and most memorably as Ronald Reagan’s secretary of state — still remembers Joseph Levy. And still mourns him.

Speaking to The Times of Israel on a visit to Israel last week, Shultz, a gracious, wise and weathered 95, recalls that all the kids on those dean’s lists were smart. But “there was something special” about Joseph Levy. “If you’ve been in the education business, you’ve seen this in some students right away,” says Shultz. “I could see this man was going to be a great leader. He’d got all the special attributes.”

But Levy did not go on to that anticipated greatness. As Shultz tells it, “Before I even realized that the Six Day War was on, he was dead. He came back to Israel and was killed in action.”

Levy was one of the members of the Jerusalem Brigade who died battling the Jordanians around Government House in Armon Hanatziv, southern Jerusalem, on June 5, 1967. Says the secretary, “My introduction to Israel was through Joseph Levy.” Now Shultz breaks into staccato sentences, keeping his emotions checked. “High talent. Tremendous patriotism. Tough neighborhood.”

Memorial to members of the Jerusalem Brigade, including Joseph Levy, who died in battle in the 1967 war at Armon Hanatziv, southern Jerusalem (Dr. avishai teicher / Wikipedia)

Memorial to members of the Jerusalem Brigade, including Joseph Levy, who died in battle in the 1967 war at Armon Hanatziv, southern Jerusalem (Dr. Avishai Teicher / Wikipedia)

Shultz was making this current visit to Israel as honorary chair of the Israel Democracy Institute’s International Advisory Council for four days of meetings, plus a dinner addressed by Prime Minister Benjamin Netanyahu and devoted to grappling with the challenges faced by Israel’s democracy. But the IDI also reconnected him with Joseph Levy. The star Israeli graduate student had a wife and a son when he was killed, and the IDI tracked them down.

“We had a nice meeting. And then we went to the battlefield where he was killed. And there is on the hill above the battlefield a beautiful big monument … commemorating what he did.”

Again, the staccato sentences: “The monument has a great view. That’s where the field of battle was. That’s where he was killed. That was a long time ago. It initiated me to Israel.”

We all marvel, understandably, at Shimon Peres’s longevity, his indefatigability, his facility to keep moving with the times, to find the aphorism for every nuanced political shift, at 92 years of age. Shultz, three years Peres’s senior, comes across more as a rock of unshifting fundamentals — looking out on a dangerous world and lamenting, most of all, the absence of clearheaded, decisive leadership.

Former US secretary of state George Shultz interviewed by David Horovitz in Jerusalem, February 14, 2016 (Maayan Jaffe / IDI)

Former US secretary of state George Shultz interviewed by David Horovitz in Jerusalem, February 14, 2016 (Maayan Jaffe / IDI)

We talked in his room at the King David Hotel, at the tail end of his visit to a country he plainly much admires and cares for. He sat calmly, almost immobile, for our conversation, spoke in carefully formulated sentences, cherry-picking from more than two centuries of American diplomacy to make his points. But at the heart of the Shultz’s recipe for guiding the world, unsurprisingly, stood Ronald Reagan, whom he served as chief US diplomat for most of the 1980s.

Want to marginalize evil, and empower good? Take a page or three, says Shultz, from the Ronald Reagan playbook.

I began, trying not to sound disrespectful, by observing that “you’ve been around for a long time” and wondering whether, with the benefit of all that perspective, Shultz was upbeat about current realities. He responded by going back rather further. In fact, he led me on a historical tour of diplomatic fundamentals. I think it’s worth taking the journey verbatim.

Mr. Secretary, you’ve been around for a long time. Are you optimistic about where the world is heading?

George Shultz: Here’s the way I see it. At the end of World War II, some gifted people with names like Truman, Patterson, Marshall, looked back. What did they see? They saw two world wars. They saw the first one was settled on rather vindictive terms. They saw 61 million people killed in the Second World War. They saw the Holocaust. They saw the Great Depression. They saw the protectionism and currency manipulation. They said to themselves, What a crummy world. And we’re part of it whether we like it or not.

So they set out to build something better. They originated the Bretton Woods system. Incidentally, 44 countries. It wasn’t just the United States telling everybody what to do. But there was leadership.

‘They said to themselves, what a crummy world. And we’re part of it whether we like it or not. So they set out to build something better’

There was the Marshall Plan. The Marshall Plan wasn’t the US telling people (what to do). The Marshall Plan said to, say, France, Your economy’s all broken up in the war. What do you think you should do? Come up with a plan. Let’s talk about it. And obviously you’re going to need some money. So here’s the Marshall Plan. It was that kind of leadership.

Then comes the Cold War. Containment. NATO. This worked, in the United States, practically on a non-partisan basis. With people from all over the world contributing. And I think you can say by the time President Reagan stepped out of office, the Cold War was basically over. And there had been built a security and economic commons in the world from which everybody benefited.

That has fallen apart. We now have a world awash in change everywhere. It’s stunning in the Middle East, but it isn’t just here. Latin America is a mess. China is struggling, Europe is distraught, and particularly now with all the refugees. And at the same time we have an information and communication age so people everywhere know what’s going on pretty easily, pretty quickly and they can communicate and they can organize. And they do.

From the standpoint of government, in every place there is diversity. And you’ve got to govern over it, you can’t ignore it. You can’t eliminate it. It’s there. That’s something that in most places hasn’t been faced up to.

‘We now have a world awash in change everywhere. It’s stunning in the Middle East, but it isn’t just here’

My first visit to Israel was about 50 years ago, and for some reason I was lucky enough to have Teddy Kollek take me around the city. We went to one party after another all over Jerusalem. Then he took me into his office and all of a sudden I realized, he’s teaching me something. He said, My job as mayor of Jerusalem is to make Jerusalem a beautiful picture. But it’s not a painting, where the colors merge. My beautiful picture is a mosaic. He said, You saw all these groups. They’re all different. It isn’t that they’re Jews and Arabs. There are all sorts of different Jewish groups, all sorts of different Arab groups. And my job is to see that they can each express themselves as they want, as long as they do it in such a way that it doesn’t interfere with somebody else’s ability to express themselves. And having them all glad to live under the golden dome of Jerusalem.

Teddy understood he was governing over diversity, and he went about it very skillfully. Sometimes people now… take this guy Maliki, in Iraq. He didn’t have a clue. He had Sunnis, he tried to ignore them; Kurds, he tried to ignore them. He didn’t have any idea (of the need) to govern over diversity.

I thought you were going to tell me the world was much worse in the past, that, you guys don’t know how good you have it. Evidently not.

I think we have to say there’s no leadership in the world.

Israel has never had lengthy periods without challenges, but today you have the threat of Iran and you have the rise of brutal Islamic extremism. It’s not just diversity, but you’ve now got a religious dimension that is pretty hard to govern.

For centuries, we somehow managed to separate war from religion, and now it’s back. War with a religious base is much more dangerous, because it has a capacity to spread, which it’s doing.

‘For centuries, we somehow managed to separate war from religion, and now it’s back’

At the Hoover Institution at Stanford where I spend most of my time, we had the top general from Pakistan who came and visited us and he gave his talk. I was shaking my head. I said, The man is more worried about ISIS than he is about India. It spreads its wings.

In the Reagan era, you were dealing with clashing ideologies, but ultimately relative pragmatism and rationalism on both sides. How do you grapple when there’s a religious motivation to extremism?

Jon Meacham: Thomas Jefferson. The Art of Power

Jon Meacham’s book ‘Thomas Jefferson: The Art of Power’

Have you read this new book about Jefferson? Very interesting book. Jefferson was our ambassador to Paris in 1784. And John Adams was our ambassador to London. And Adams according to the book sends Jefferson a message, asking him to come over to London because there’s a new ambassador from Tripoli, that he thinks he might do business with. This was a time when the Barbary pirates were taking ships and enslaving people and getting paid off and so on. So Jefferson goes over. And some of the quotes from the ambassador (from Tripoli) about their duty to kill people who are sinners, who are not believers, you would read the same thing today.

Jefferson concluded from that discussion that there was no point in trying to negotiate with the religion. By the time he became president he was fed up with the idea of trying to buy off things. So he took out a big navy — before, our navy was just to protect our shores — and went over there to the Mediterranean. He beat the hell out of them. That was the end of it for a while. But it’s still there.

So if we had better leadership, how would you tackle Iran and Islamic extremism?

Iran in some ways is sort of similar (to extremist Islamist groups) because it is a very religion-based government and its terrorism stems from that.

The Ronald Reagan playbook would go something like this. First you have to establish the fact that when you undertake to do something, you do it. That you can accomplish what you set out to accomplish.

I’m in Marine Corps boot camp. The sergeant hands me my rifle. He says, ‘Take good care of this rifle, this is your best friend. But remember one thing: Never point this rifle at anybody unless you’re willing to pull the trigger. No empty threats’

Shortly after he took office, the air controllers went on strike. People came running into the Oval Office — Mr. President, Mr. President, it’s very complicated. He said, It’s not complicated, it’s simple. They took an oath of office. They violated it. They’re out. And all over the world people said, The man’s crazy; these are the air controllers. But he understood, from eight years as governor of California, that you have to be able to execute. His secretary of transportation, a man named Drew Lewis, had been chief executive of a major transportation company, and he understood the problem, and he knew how to get something to happen, and they kept the planes flying. And all over the world, people said, Hey, watch your step. The guy plays for keeps.

In my own life, at the start of World War II, I’m in Marine Corps boot camp. The sergeant hands me my rifle. He says, Take good care of this rifle, this is your best friend. But remember one thing: Never point this rifle at anybody unless you’re willing to pull the trigger. No empty threats. So that’s fundamental. If you’re going to point that rifle, a problem comes, you shoot. Otherwise don’t point the rifle.

That’s number one.

Number two, be realistic. No rose-colored glasses. Don’t be afraid to seize an opportunity when you see it, but be realistic. Don’t kid yourself. People went wild when President Reagan called the Soviet Union an evil empire. And my colleague Paul Nitze, one of our greatest public servants, was testifying before a senate committee. And they were all after him because the president had said this. Finally, the chairman said to him, Paul, how can you serve in an administration where the president would call the Soviet Union an evil empire? And Paul said, Senator, have you considered the possibility that the statement might be accurate?

So, Reagan was realistic.

And then, on the basis of that, you have to have strength. You’re not going to have military strength unless you have economic strength. You have to have that to build on. So Reagan set out to build our economy. He inherited a mess. He inherited high inflation, stagflation, an economy going nowhere. First he had to do something about the inflation. He knowingly took a beating supporting Paul Volcker. He put a political umbrella over Paul. And inflation came under control. And our economy took off. He created a strong economy and that was a base for dealing with the Soviets.

The Soviets blinked

Then we had a dramatic period of the deployment of our INF missiles in Britain and Italy and then ballistic missiles in Germany. That was a huge thing. The Soviets withdrew from negotiations and tried war talk, which we stood up to. The alliance showed its strength and cohesion. It was dramatic — a turning point in Cold War.

President Ronald Reagan turns back for a final word to journalists in Brussels during the March 2-3, 1988 NATO summit. With him are press spokesman Marlin Fitzwater, left, and Secretary of State George Shultz. (AP Photo/Charles Tasnadi)

President Ronald Reagan turns back for a final word to journalists in Brussels during the March 2-3, 1988 NATO summit. With him are press spokesman Marlin Fitzwater, left, and Secretary of State George Shultz. (AP Photo/Charles Tasnadi)

By the following August I was able to go to President Reagan and say, In four European capitals, a Soviet diplomat has come up to one of our diplomats and said virtually the same thing. Namely, if (foreign minister) Gromyko is invited to Washington when he comes to the General Assembly, he’ll accept. In other words, the Soviets blinked. I remember saying to him, Mr. President, you’ll probably want to think this over, because Jimmy Carter stopped those meetings [with the Soviets] when they went into Afghanistan, and they’re still there. And the president said, I don’t have to think it over. Let’s get him here.

The meeting with Gromyko in Washington was a giant event. There’s one little nice side story. Nancy Reagan and I were pals. I said to her, Nancy, what happens is Gromyko comes to the West Wing, comes into the Oval Office, we have a meeting and then we walk down the colonnade to the mansion, and we have some stand-around room time. And then there’s a working lunch. How about being there for the stand-around time? You can be the host. She said, Fine.

So, she’s there. And Gromyko immediately moves on to her, and after a while he says to her, Does your husband want peace? And Nancy can bristle. She said, Of course my husband wants peace. So he says to her, Then every night, before he goes to sleep, whisper in his ear: Peace.

He was a little taller than she was. She put her hands on his shoulder. She pulled him down. He had to bend his knee a little. She said, I’ll whisper it in your ear: Peace.

Nancy Reagan listens to Secretary of State George Shultz on Tuesday, Oct. 25, 1988 before she addresses a United National Committee. (AP Photo/Marty Lederhandler)

Nancy Reagan listens to Secretary of State George Shultz on Tuesday, Oct. 25, 1988 before she addresses a United National Committee. (AP Photo/Marty Lederhandler)

After the election, I met with Gromyko in Geneva. We started the arms control talks and we were off and running. This was all before Gorbachev came.

Gromyko says to Nancy Reagan, ‘Does your husband want peace?’ And Nancy can bristle…

Then you have to figure out, what is your agenda. And on the basis of that, negotiate.

With the ISIS people, I think we need to be realistic. We need to have strength. We have to rally people. They will follow if you will lead with a certain trumpet. And we have to have some combination of air and ground (forces). As everybody says, You want some Arab boots on the ground. But it isn’t only Arab. Use Pakistan. You’ve got to rally people and develop an understanding.

We also need to get our communication resources up and running. During the Cold War, we had Radio Free Europe and Radio Liberty, and they were very effective. All of the archival records of those radios came to the Hoover Institution, so a few years ago we had a conference. We had people who’d studied those records and we had people who ran BBC and Voice of America, and some people from behind the Iron Curtain who’d held various positions. And we asked two questions. Did anything work, and if so, why? And everybody agreed that it really worked.

Some of the officials behind the Iron Curtain said, If we really wanted to know what was going on, we’d go listen to the Voice of America, Radio Free Liberty. Which was because they learned that (those stations) would be scrupulous in always telling the truth. Sometimes the truth was not very nice, but we’d still tell it. So it was trusted. We need to get that up and going. It’s applicable to the world of Islam.

And on Iran? The world got them to the talks.

‘With Iran, you don’t just negotiate on the nuclear weapons. You negotiate the whole thing’

If you apply the Reagan formula to Iran, you’d say, Okay, we’re going to negotiate with Iran, let’s be realistic. What are they? They’re the biggest state sponsor of terrorism. Number two: They want to get ballistic missiles. Why do they want ballistic missiles? Number three: They have a (repressive) method of internal government. Number four: They want nuclear weapons. So you don’t just negotiate on the nuclear weapons. You negotiate the whole thing. People would say, they wouldn’t do it. Well, then we won’t negotiate.

Then they’ll close in on the bomb.

Well, maybe. Or maybe we do something about it.

Do you see any encouraging signs globally?

I think it’s a very difficult period. Probably the hardest. There are lots of things we can do and I guess we’re doing some of them. There are sanctions on Russia. That’s beginning to close in. It’s gradually dawning on people that we need to help the Baltic states so they’re not a prisoner of Russian oil and gas. It’s not easy to persuade Ukraine to get rid of their corruption, but it’s happening. So we try to rescue them. And then we get somewhere with the Russians.

One of the things we have to careful with, with Russia, is that if it starts to fall apart, we don’t want that to happen. So we’ve got to be near, to help that not happen.

It seems to me that some of the steps taken by America in this part of the world in recent years were not out of the Reagan playbook. Looking at the candidates in the coming presidential election, including from an Israeli perspective, what do you think we should wish for?

‘Everybody’s down on Israel, but Israel itself is actually doing pretty well. Somehow or other, it’s working’

There are some potential good presidents. I was sorry to see Christie drop out. He was pretty good. I think very well of Bush. Kasich is good. I have my fingers crossed about Rubio. He’s a young man who’s never run anything. The experience of actually running something, of deciding something, and following thorough, it’s important. People think of Reagan as a movie actor. Remember he was governor of California for eight years. Also Mike Bloomberg might enter. Who knows. He’d be an interesting character.

We have this sense of grievance in Israel that we are misunderstood. Our challenges are underestimated. Why is so much of the international community so under-empathetic?

Well, Israel has done pretty well for itself. Its economy right now — all things considered with the world economy we have — it’s doing good. Everybody’s down on Israel, but Israel itself is actually doing pretty well. Somehow or other, it’s working.

George Shultz and Benjamin Netanyahu at an Israel Democracy Institute dinner in Jerusalem, February 14, 2016 (Oded Anteman / IDI)

George Shultz and Benjamin Netanyahu at an Israel Democracy Institute dinner in Jerusalem, February 14, 2016 (Oded Anteman / IDI)

Okay, we’re doing well economically and we’re cultivating new partnerships in some places. But when the Palestinians seek an upgrade in the UN to non-member state, without the discomfort of having to negotiate with Israel, almost every country either votes for them or abstains. We deserve a little more empathy and support than we get, no?

I don’t know how to explain this. There’s movement in Europe and a little bit on the college campuses in the United States. Not much at Stanford. I don’t know. I think it’s a lot of anti-Semitism. Not about Israel so much.

How did you come to be filling this role at the Israel Democracy Institute?

When I was in office as secretary of state (1982-89), I had a lot of dealings with Israel. And I was called on early on by prime ministers and foreign ministers to talk about security issues. I said to them, Are you watching your economy? And nobody even wanted to talk about it. But having been secretary of the treasury, I was paying attention and I thought they were heading for trouble. So sometime in the mid-1980s: hyperinflation. Big trouble. They came to me, and they said, Well, you said we should pay attention. What should we do now?

I told them what I thought they should do. My great friend Milton Friedman was my unpaid consultant. We developed ideas for what you do. Then we made a deal — the Israeli government, the American Jewish community and the American Congress. They all agreed. I would be the heavy, I would be the guy who said all the tough things. The other side of the deal was they would do what I said. I recruited Herb Stein and Stan Fischer to be the point men to go to Israel. We brought about the softest landing from hyperinflation anywhere.

Secretary of State George Shultz, left, greets Defense Minister Yitzhak Rabin at the State Department in Washington on Monday, January 28, 1985 (AP Photo/Ira Schwarz)

Secretary of State George Shultz, left, greets Defense Minister Yitzhak Rabin at the State Department in Washington on Monday, January 28, 1985 (AP Photo/Ira Schwarz)

Then I started various interactions. I tried to peddle my papers when I was here in the region. I was trying to get somewhere, without much success. There was a cartoon in the Jerusalem Post, and it shows me fending off blows. There’s an Israeli with a club beating on me. There’s a Palestinian with a club beating on me. There’s a Jordanian with a club meeting on me. And the captions says: Well, at least they agree on something.

Anyway you keep at it.

George Shultz at the Knesset in Jerusalem, February 2016 (Yosi Zeliger, IDI)

George Shultz at the Knesset in Jerusalem, February 2016 (Yosi Zeliger, IDI)

Then as I left office, Arik Carmon and Henry Rosovsky from Harvard and a couple of other people came to see me with the idea of starting something called the Israeli Democratic Institute. And the idea of it was: How do you maintain democratic practices in a little country surrounded by hostility? I’d had all this background. I said, Yes, that’s a very important and difficult thing to do. So I joined the IDI process. That was 25 years ago. I’ve been watching what’s happening. It’s been a very effective process.

How do you think Israel’s doing, as a democracy?

Israel’s doing great. It’s got big problems because it’s got such diversity, and governing over that diversity is hard. To some extent, that’s one reason why people drum up opposition outside the country. To a considerable extent, out of anti-Semitism.

We have Knesset members who completely disagree with the foundational principles of this country. We have one who sailed on the flotilla to Gaza, who said the killing of three Israeli teens in the West Bank two years ago wasn’t terrorism. We have three Knesset members who met recently with the families of terrorists. Fellow MKs want to ban them. The courts say no. Where do you draw the line? I don’t know if you’re familiar with the specifics.

I remember when Israel took out the reactor in Iraq. There was a lot of yakking. But later on everyone said, ‘Hey, glad they did’

I’m not intimately familiar with it. But you work at these things. One time I was in the construction business. If you ask me to build a bridge across the Potomac River, I sink my piers, I put up my steel, pretty soon I’ve got a bridge built and you can drive a truck over it. Problem solved. If you say, Build the bridge in such a way that there are no lost time accidents while the bridge is being built, and I put some guard rails up and think I’ve solved the problem, I’ve lost. Because apparently it’s not a soluble problem. It’s the kind of problem you work at. And if you work at it, creatively and consistently every day, you just might get the bridge built. But that’s because you realize it’s a problem you have to work at rather than solve.

To a certain extent, I think these problems are like that. You’re not going to have a clean solution: Let’s do this; that’s the end of it. It’s a problem, it’s there and it has to be worked at. Basically, I think that’s what Israel has done. There are problems here, they take various sizes and shapes over the years. Basically, Israel has worked at them, sometimes has had to act very decisively. But still worked at them. And it’s here, thriving.

I remember when Israel took out the reactor in Iraq. There was a lot of yakking. But later on everyone said, Hey, glad they did. I’m glad they took out the one in Syria too. So, that was decisive.

We didn’t take out the ones in Iran.

Well, it gets harder. I’m not happy about the Iran deal. Probably has postponed their acquisition of nuclear weapons. Postponed is the word. They have a lot more money now. They’re sitting there with the Russians.

I’m puzzled by how the Russians are going to pull this off. They’ve aligned themselves with the Shiite-Iranian network to dominate the Middle East. Their own restive Islamic population is Sunni.

Any rate, it’s a tough deal.

We’ll keep working at it.

Yes, keep working at it.