This interview is excerpted from Commanding Heights
, a companion Website to the PBS documentary of the same name. Hyperlinks have been added for access to further information.
Interviewer: What was the subject of the thesis you wrote in your university years, and what did you learn from it?
Watercolor of the Cleveland Tower on the Princeton University Graduate College campus
George Shultz: At Princeton, undergraduates have to write a thesis, and it's a wonderful requirement. Mine was on the agricultural program of the Tennessee Valley Authority, the TVA, which was all the rage [in those days].... And I spent a summer in the Tennessee Valley gathering material myself. I went to Washington and I went to Knoxville, I gathered all the statistical information.
And then I went and lived for two weeks with a hillbilly family -- so-called hillbillies -- and I learned some very interesting things from that visit. The hillbillies understood the government programs very well. They knew what the government wanted to have reported, and if they reported certain things they realized that would cause the government to give them fertilizer that they needed. So it took me a long while to gain their confidence, but I discovered that they reported what the government wanted to hear, whether it was actually the case or not, because they understood how to game the system.
So I said to myself, "Here I've been looking at these statistics. The statistics are just an agglomeration of all of these individual reports, and now I've learned that the reports themselves are the product of the system rather than the actual facts on the ground." So I learned a great deal about statistics. And I realized that if you go to primary sources, you're going to be better off.
That's one of the reasons why I feel very proud of the Hoover Institution where I reside because it has a specialty, it has wonderful archival material, and people come here because that material is the primary data that you get, not secondary data.
Interviewer: Did that sort of undermine your confidence in things like the New Deal policies at that time?
George Shultz: No, it didn't undermine my confidence. I had a lot of skepticism about the TVA, but nevertheless I picked out this little segment of it to study and I think that one would have to say that the dams did do what they were supposed to do. The dams controlled flooding, they gave a chance for agriculture to flourish, and it was a good thing, if costly.
Interviewer: Could it have been done better, some other way?
George Shultz: Probably, but I didn't dig into that.