The United States has had a long and tangled debate about the term “industrial policy,” which is a codeword for asking, what is the proper relationship between the federal government and private industry?
The Biden Administration has just exercised industrial policy in a most forceful manner. Officials reached out to the pharmacetical company Merck, which had lost in the race to develop a coronavirus vaccine. Johnson & Johnson had beaten them, along with Pfizer/BioNTech and Moderna.
But J&J was faltering in making enough of the vaccine fast enough. So the U.S. government cut a deal with Merck. It paid $269 million to adapt Merck’s existing facilities to make the J&J vaccine. It brokered a deal between the two companies.
White House Press Secretry Jen Psaki told reporters that the government also provided a team of experts to monitor manufacturing and logical support–and the experts came from the Department of Defense. Oh, the horror! Imagine the Pentagon helping make vaccines.
To top it off, Biden will invoke the Defense Production Act from the Korean War era to give J&J access to supplies necessary to make and package vaccines.
Where are the cries of outrage? Hasn’t the government violated the sanctity of the private sector?
There are no cries of outrage–because we all agree that stopping the virus is a national priority.
This is an example of the kind of thinking and action that will be necessary to address China’s technological and national security challenges as well as other issues of national priority, such as infrastructure. The American system can be remarkably effective at putting men on the moon and landing ships on Mars when we agree that our private and public sector institutions should cooperate toward a common goal. It’s time to finally overcome our hangups about “industrial policy” and realize that sensible policies can be remarkably effective.
