A note to readers: Swamp Notes is taking a break for the holidays. We will be back in the new year.
Here are two words that could rapidly empty a Washington dinner party: industrial policy. Here are two that could get the guests back to the table: Pfizer and Moderna — the toast of the town. Now consider that their vaccines are the product of Operation Warp Speed, which by a mile was the best thing Donald Trump has ever done.
In a nutshell, the federal government supplied about $14bn worth of subsidies to pharmaceutical companies to produce a vaccine as quickly as possible. By guaranteeing massive pre-orders up front and covering other costs (to retrofit manufacturing plants, for example), Washington eliminated most private sector risk. This enabled corporations to throw everything at finding a rapid solution. The National Institutes of Health also supplied companies with much of the sequencing work and access to its vast databases. As a result, we went from sequencing the virus in January to phase 3 trials by October. Nothing like this has been achieved in the history of medicine. “This is a historic, unprecedented achievement,” Dr Anthony Fauci told a think-tank webinar this week.
We are thus ending one of the darkest years in memory on a very upbeat note. It is also completely unexpected. As a journalist, I have taken my cue from scientists. Most of them, including Fauci, were warning for most of 2020 that it takes at least a decade to produce a vaccine. Taking into account the global urgency of the race, we were settling in for 2023 at best. Scientists were as taken aback by the speed of these breakthroughs as non-scientists.
The rapid development of Covid vaccines must count as one of the biggest positive shocks since the birth of the internet. What should we learn from this? The most obvious is that science works when it is made a priority and given sufficient funding. I hardly need add the positive implications for other challenges, such as global warming.
There is another lesson that could get lost in all the stock market jubilation. This has been a victory for a public-private partnership. Whether he meant to or not, Trump has broken the taboo on industrial policy that has existed at least since the Reagan administration. As Stephen Buranyi writes in this insightful NYT piece, we should not allow Pfizer, Moderna, Johnson & Johnson, AstraZeneca and others to run away as the heroes of this story. It was the taxpayer who carried the risk and it was public health and science institutes, such as the NIH and Oxford university, that supplied much of the research. I should also emphasise the FT’s people of the year, Ugur Sahin and Ozlem Tureci. It was their company, BioNTech, that produced the Pfizer vaccine.
The timing of these successes, which may well also include vaccines produced in China and Russia, could not be better from Joe Biden’s point of view. He wants to revive the kind of industrial policy on which Eisenhower embarked after the Soviets launched the Sputnik satellite in the late 1950s (the Russian Covid vaccine is helpfully called Sputnik 5). This would include $300bn in R&D funding for quantum computing, artificial intelligence, green tech and 5G.
Republicans don’t much like spending that has been proposed by a Democratic White House. But the success of the Covid vaccine drive offers Biden an opportunity to brandish what can be achieved. If he packages it with national security language — the new cold war with China — it stands a better chance of success. What worked for Ike could work for Joe. Rana, how would you sell a new industrial policy for the 21st century? And what would it look like in practice? I’d also like to wish you and Swampians a happy new year. Swamp Notes will be back in a couple of weeks.
Ed, I’m not at all surprised that Operation Warp Speed was such a success. Indeed, as I wrote here, the publicly funded backing of big ideas (railroads, the internet) etc, that are then commercialised by the private sector, is pretty much the only thing that ever creates sustainable, shared growth at scale. Rather than reiterate myself here, I’ll just point Swampians to my 2020 wish column — a productive state and private sector joint venture just like what we’ve seen. Sometimes wishes come true!
My wish for 2021 — that we could now apply it to the clean tech sector. In terms of selling the idea, at a practical level, I’d make sure to guarantee the jobs of coal miners and others in carbon heavy industries until the transition is a success. In terms of branding, Biden might start by reminding people that industrial policy is what has always Made America Great, see here. We just forgot about it for a half century. It’s time to remember, and take the idea back from China (as per my column, they took it from America!). That should please progressives and red states alike.
And now a word from our Swampians . . .
In response to ‘Regulators move fast and break things’:
“The problem with Facebook is not monopoly, privacy, harmful content, or misrepresentation; it is the business model described by Shoshana Zuboff in her award-winning book, The Age of Surveillance Capitalism. A business model that relies on addiction, surveillance and manipulation to deprive people of their autonomy is antithetical to democratic practice, democratic society, and democratic theory.” — Preston M Torbert