Corvid-19 and Industrial Policy Reconsideration | Charles Duelfer

Corvid-19 and Industrial Policy Reconsideration

The weak national response to Corvid-19 in the US will produce a re-awakening of debate on national industrial policy.  Are there national interests that cannot be left simply to the free market and shareholders seeking to maximize profit?  Yes, of course some, certainly including defense industry.  But where are the limits and who decides?  Time to rethink these issues.  Global supply chains have suddenly been revealed to have surprising dependencies that were not considered from a national security/health perspective.

This is not new.  I was recently reading a classic book in its field, “Chemical Warfare” by Curt Wachtel written in 1941.  Wachtel had been a key scientist at the Kaiser Wilhelm Institute before and during World War 1.  He subsequently became a US citizen and worked on American defense programs.  Anticipating potential chemical weapons that the US might confront in entering World War 2, his work highlighted the linkages that were overlooked by many countries regarding chemical weapons offensive and defensive requirements.

Wachtel noted that when Germany in 1916 decided to use mustard agent as a defensive weapon it would have to deal with eye injuries to soldiers and civilians.  This required vaseline.  The only source was from the US and the British blockade cut that off.  They immediately searched German and Austrian inventories and found only a few hundred pounds and immediately confiscated it.

Wachtel goes on to make the broader point governments need to identify and control critical items.  “There must be a bureau, or expert, or committee for chemical and industrial planning, not only for providing government agencies as well as private institutions and business.”  Wachtel also notes that a balance must be achieved because, “interference of a bureaucracy may mean disaster.”[i] 

Such planning comes naturally to China.  It’s in the DNA of the Communist Party of China.  Making no secret of its goals, China, under Premier Li Keqiang issued a blueprint in 2015 for its industrial policies.  The goal was to move their industrial capacity and expertise further up the supply chain in production and to leading edge in key technologies.   Their plan, called “Made in China 2025”, identified ten focal areas including biotechnology and medicines.  Midterm grades on their progress by various outside industry observers rate their progress highly (

Analysts note that China’s emphasis in medicine is consistent with other nations with an aging population (Premier Li is said to be in charge of the Corvid-19 response).  However, China has always had a strong national security, economic and prestige component in its decisions.  Industrial policy comes naturally to the leaders of the Communist Party.  President Xie’s trademark Belt and Road initiative combines many of these goals in way that only a government with heavy central direction over the economy can achieve.  It must be a high priority for Beijing to achieve a vaccine first.

For the US, one fallout may be a broader view of federal roles in issues that can determine real risks to US security more broadly defined that just military or intelligence.  These issues come up regularly but there is not a sustained consideration of them in government.  Unlike many countries, we do not have the equivalent of a US 2025 program.  Politics and elections make sustained attention and sustained consensus on goals difficult if not impossible today.  Industrial policies in response to pandemics are one thing.  In rebuilding the economy with massive government infusions of resources we can expect strong advocates in the upcoming electoral season for such actions to address climate change.

The usual debates over industrial policy will re-ignite.

[i] Wachtel, Curt, “Chemical Warfare”, Chemical Publishing Co., Inc. Brooklyn New York 1941 pp. 84-85.

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