Trump Is Winning the Race to the Bottom

China, meanwhile, has demonstrated intellectual and innovative vitality.

- David Brooks

Confidence. Some people have more of it and some people have less. Confident people have what psychologists call a strong internal locus of control.

When it comes to confidence, some nations have it and some don't. Some nations once had it but then lost it. Last week on his blog, "Marginal Revolution," George Mason University economist Alex Tabarrok asked us to compare America's behavior during Cold War I (against the Soviet Union) with America's behavior during Cold War II (against China). I look at that difference and I see a stark contrast—between a nation back in the 1950s that possessed an assumed self-confidence versus a nation today that is even more powerful but has had its easy self-confidence stripped away.

In the 1950s, American intelligence suggested that the Soviet Union was leapfrogging US capabilities across a range of military technologies. Then on October 4, 1957, the Soviet Union launched the first satellite, Sputnik, into space.

Americans were shocked but responded with confidence. Within a year the United States had created NASA and ARPA (later DARPA), the research agency that, among other things, helped create the internet. In 1958, President Dwight D. Eisenhower signed the National Defense Education Act, one of the most important education reforms of the 20th century, which improved training, especially in maths, science, and foreign languages. Within a few years, total research and development spending across many agencies zoomed up to nearly 12 percent of the entire federal budget (it's about 3 percent today).

America's leaders understood that a superpower rivalry is as much an intellectual contest as a military and economic one. It's who can out-innovate whom. So they fought the Soviet threat with education, with the goal of maximizing talent on our side.