The Private Sector’s COVID-Era Triumph

POLITICS & POLICY
Healthcare workers prepare Pfizer coronavirus vaccinations in Los Angeles, Calif., January 7, 2021. (Lucy Nicholson/Reuters)

While government struggled mightily to steer us through the coronavirus pandemic, the free market got to work.

Popular culture most often portrays businessmen and the corporations they head as greedy and ruthless. A lightly regulated free market and the profit motive, we’re told, inevitably leads to the exploitation of workers and consumers. Through Hollywood’s lens, government is far more virtuous and effective than the private sector, and regulations are a force for good.

Were all of this true, we’d expect the COVID-19 pandemic to have borne it out. Exploitation would have skyrocketed as businesses harmed employees and consumers alike. Government at every level would have been our savior, new and existing regulations would have protected us, and our politicians would have competently led us to salvation.

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Of course, none of those things has happened.

At the pandemic’s outset, regulations prohibited labs outside the federal government from developing a test for COVID-19. Only a Centers for Disease Control (CDC) lab was authorized to do so, and it bungled the attempt. Even though officials knew the CDC’s diagnostic kit was flawed — it had a 33 percent failure rate — it was approved for general use on February 6, 2020. On February 29, the CDC and FDA removed the restrictions on commercial and academic labs, freeing them to produce better tests. In under two weeks, the Cleveland Clinic unveiled an accurate test that took a mere eight hours to produce results, compared to the CDC test’s seven days. Over the following 15 days, Cepheid announced a 45-minute test, Mesa Biotech a 30-minute test, and Abbott Labs a 5-minute test. The free market delivered where government had failed.

When the pandemic took hold in late February, it wasn’t government that responded swiftly, but businesses. Amazon restricted employee travel on February 28. On March 3, major tech companies in Puget Sound, Wash. told employees to work remotely. It took another ten days before Washington governor Jay Inslee closed schools and restricted the size of gatherings, during which time the number of cases in the state increased more than ten-fold. When Seattle-area tech employees were sent home, New York mayor Bill de Blasio was encouraging his city’s residents to “get out on the town despite Coronavirus” and recommending movies to go see. “There’s no indication that being in a car, being in the subways with someone who’s potentially sick is a risk factor,” the city’s top public-health official declared. The list of politicians who defied their own orders and guidelines grew long and storied in subsequent months, while Congressional gridlock complicated COVID-relief efforts and states struggled to roll out testing.

Meanwhile, as the pandemic has worn on, although under no legal obligation to do so, businesses have also taken steps to protect or support workers and non-workers alike. Meat-packing company JBS USA Holdings Inc. has removed around 8 percent of its employees — those who are considered the highest COVID risk — from the workplace while continuing to provide them their full pay and benefits. Tech companies that shuttered their campuses have continued paying janitors, food-service workers, and other hourly staff who can no longer work as a result. Tableau, a Seattle-based software company, organized a virtual holiday party to support both its employees and the area’s struggling restaurant industry. Ethan Stowell, who runs more than a dozen high-end restaurants in the area, was asked to produce the 3,500 meals the occasion called for. He suggested that Tableau split the contract with his competitors and formed a coalition of 40 restaurants to deliver the meals.

There’s perhaps no starker illustration of the private sector’s success in battling COVID-19 than the development of vaccines, which are now available not because of big government but because of Big Pharma. The story of the Pfizer-BioNTech vaccine involves a Turkish-German couple — both pharmacists and serial entrepreneurs — and their partnership with a multinational corporation. Three million doses of the Pfizer-BioNTech vaccine began shipping out on December 13 to 636 sites as part of Operation Warp Speed, a public-private partnership to develop, manufacture, and distribute COVID vaccines. FedEx and UPS rapidly shipped other vaccines as they gained government approval. By year’s end, over 14 million shots had been shipped out and 2 million had been administered.

While those numbers fell short of Operation Warp Speed’s goals, it’s worth considering how our government might have fared had it tried to develop and distribute vaccines on its own. Through the end of December, the U.S. had vaccinated about four times as many people per capita as Canada, which has a government-run program. Other countries where private-sector involvement is limited or non-existent have faced similar problems. Germany, where the Pfizer-BioNTech vaccine was developed, only received 400,000 initial doses, which it began administering on December 27. It will receive a further 12 million or so doses in March, by which time the U.S. aims to have 100 million Americans fully vaccinated.

In short, the private sector has been far more effective at steering us through the COVID crisis than the government has — and that should surprise no one, because large corporations must be accountable to the public to succeed while politicians can often survive just by being the better of two bad options on the ballot. Perhaps those Hollywood writers who primed us to believe the opposite should find some other bogeyman to drive their plots.

Nicholas Kerr is an adjunct scholar at the Lone Star Policy Institute. He works in marketing in the tech industry, and writes a blog, the Kerrant, on policy and being a dad.

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