American industry is just getting warmed up

Two of the largest clinical services labs in the country are ramping up testing in response to the COVID-19 coronavirus pandemic. LabCorp and Quest Diagnostics soon plan to be able to process as many as 300,000 tests a week. American industry is rising to the challenge all on its own despite calls from some to begin forcing companies to produce goods at the direction of the federal government under the Defense Production Act.

A relic of the earliest days of the Cold War, the Defense Production Act of 1950 was enacted in response to the Korean War and a concern that United States was unready for the next war. And, as we find ourselves in a different kind of war, President Trump has been reluctant to compel businesses. He knows he doesn’t have to. It is with our capacity to build what people want that we also have the capacity, the knowledge and power to build what people need.

Ford, General Motors, and Tesla are switching over assembly lines to produce ventilators. GE is adding shifts to its existing ventilator production lines. Honeywell and 3M are ramping up manufacture of N95 industrial face masks. Even the nation’s brewers are getting in on the action, distilleries are making hand sanitizer. Cosmetic companies like Louis Vuitton have similarly started producing hydroalcoholic gel at their factories.

The market is responding to the COVID-19 pandemic. Not only because it’s the right thing to do, but it’s also simply how the free market works. Businesses must adapt to survive. Corporations can either wind down production, lay off workers and hope for better days or they can respond to market trends and manufacture products customers demand.

The market doesn’t require the benevolence of central planners to do good. That’s why it will always be a greater allocator of needs than a command and control economy. We don’t have to look beyond this pandemic to see proof of that. Let’s not forget that it was government that slowed our response to the virus once it hit our shores through burdensome regulations on COVID-19 test kits.

South Korea found that an extensive testing regime helped turn the tide on the virus there. As of March 16, South Korea had tested around one in every 200 people. The United States, by March 16, had performed just 74 tests per 1 million people largely due to a lack of tests and that some of the initial CDC testing kits were found to be faulty.

“FDA rules initially prevented state and commercial labs from developing their own coronavirus diagnostic tests, even if they could develop coronavirus PCR primers on their own,” writes Neel V. Patel in MIT Technology Review. “So when the only available test suddenly turned out to be bunk, no one could actually say what primer sets worked.”

The Trump administration has since ordered the federal government into a role of support as it embraces the idea of a “locally-executed, state-managed, and federally supported” response plan. That’s the right move because the situation in New York or California, is very different than states that have seen lesser impacts.

The FDA, for its part, is supporting the biopharmaceutical industry by getting out of the way through reductions in red tape and regulation. And, the biopharmaceutical companies are springing into action. Dozens of companies are racing coronavirus treatments, vaccines and diagnostic tests to market. We’ve already mentioned LabCorp and Quest, but Abbott alone hopes to produce 1 million tests a week.

I know it’s not too late to unleash the productive forces of the American economy on this virus. I know we’ll make it out of this because I know what America can do. American industry is just getting warmed up.

Lisa B. Nelson is the chief executive officer of the American Legislative Exchange Council, the country’s largest and oldest membership organization of state legislators, who are dedicated to individual liberty and free enterprise. Follow her on twitter @LisabNelson.