“This is war.”
That was President Trump’s remark on Friday, as he appointed Dr. Peter Navarro, head of the White House Manufacturing and Trade Policy, as the man to lead our health care production effort against the coronavirus. That appointment is the clearest indication yet that America is using the model of our mobilization during World War Two, to create a new Arsenal of Democracy to crush this new scourge.
Getting the World War Two model right is crucial. Done the wrong way, i.e. with government trying to command and control our health industrial base, it’s doomed to failure. But done the right way, as explained in my 2012 book Freedom’s Forge: How American Business Produced Victory in World War II, we can defeat the COVID-19 threat and future pandemic threats around the world.
Fortunately, Dr. Navarro knows we need to do this “patriotically, voluntarily, organically, and innovatively,” as he put it. Those are exactly the principles that were so successful in World War II: maximizing the instinct for innovation and productivity of the private sector while minimizing Washington’s instinct for generating red tape and “picking winners and losers” for political effect, rather than for getting the best results.
In fact, today we face the same choice FDR did for mobilizing America for war in the summer of 1940. One option was to listen to his New Deal advisers who pushed for nationalization of industries and a command-and-control economy. “Democracy must wage total war against totalitarian war,” was how FDR adviser Harry Hopkins put it, including total control of the wartime economy.
The other option came from GM CEO Bill Knudsen. This was to look to the private sector and the productive power of capitalism to arm America, by encouraging and incentivizing the best and most productive companies to arm the country for war, while leaving Washington with the job of coordinating and overseeing the overall effort, and making sure resources went where private industry would need them. “The government can’t do it by itself,” Knudsen told the president, “The more people we get into this program, the more brains we can get into it, and the better chance it will have to succeed.”
Happily for the free world, FDR chose the second approach. Less than a year after mobilization began, companies like GM, Ford, Chrysler, General Electric, and AT&T were voluntarily snapping up contracts to produce the arms and equipment that made the United States the “arsenal of democracy” (Knudsen’s phrase). By the time bombs dropped on Pearl Harbor, American factories and shipyards were already in full wartime production mode—and out-producing the Axis powers at such a pace that we were also able to arm Britain, China, and Russia. In fact, two-thirds of all war material used by the Allies in World War Two came from America, thanks to FDR and Knudsen’s formula for victory.
Nowhere is this World War Two breakthrough going to be more crucial than in the production of ventilators for coronavirus victims. According to the New York Times, thirteen years ago a federal top-down, government agency-led effort tried to produce new ventilators to fill the national stockpile, and failed.
This time we’re doing it right, by drawing in a range of private companies to increase production of existing models of ventilators while also streamlining the FDA regulations that would ordinarily slow the approval process.
This is what GM is doing in partnership with Ventec Life Systems, even as Ford is undertaking to produce a version of General Electric Healthcare’s ventilator—while GE’s Getinge AB, ResMed, Vyaire, and Hamilton Medical, Inc. are all gearing up their production lines to meet demand which is projected to reach into the millions in a few months.
America’s aerospace companies are also stepping up to offer their production lines to the ventilator effort, with the Aerospace Industries Association taking the lead to reach out to the ventilator makers.
Of course circumstances are different this time. Instead of a year and a half, the timeline has to be measured in weeks. Instead of tanks and planes, it’s ventilators, respirators, N95 masks, and hospital beds.
But the principles this time will be the same as in World War II: gear up the private sector and the productive power of capitalism to arm the world against the coronavirus threat, with Washington doing the job of coordinating and overseeing the overall effort—and with Dr. Navarro being able to use the authority of the Defense Production Act in the last, rather than first, resort.
We’ve taken the crucial first steps to getting our health manufacturing base to take off, just as our defense industrial base did during World War Two. What we need to do next, will be the subject of my next column.
