Is innovation faster when countries feel threatened?
In 1993, Joel Mokyr wrote for Reason:
Especially after 1870, when the major European powers became steadily less friendly toward one another, the sense of one national identity competing against another was a powerful stimulus to many of the great inventors of the time [...] Governments increasingly encouraged and subsidized research and development for national-security purposes.
The Cold War has had similar effects, and one might call this competitive creativity "the Sputnik effect": The shocking fear that the United States might fall behind in the "competition for technology" with the Soviet Union stimulated research and development in the United States after 1957 like nothing else. Indeed, some economists have been tempted to view competition between nation-states as comparable to the healthy and cleansing competition between firms in the free market. This is a simplification, because competing firms do not start wars against each other. But it has a kernel of truth.
A stronger version of this theory relies on what I have called "Cardwell's Law," after the British historian Donald Cardwell. This law states essentially that every society, when left on its own, will be technologically creative for only short periods. Sooner or later the forces of conservatism, the "if-it-ain't-broke-don't-fix-it," the "if-God-had-wanted-us-to-fly-he-would-have-given-us-wings," and the "not-invented-here-so-it-can't-possibly-work" people take over and manage through a variety of legal and institutional channels to slow down and if possible stop technological creativity altogether. Technological leaders like 17th-century Holland or early 19th-century Britain lost their edge and eventually became followers.
Many feel that the United States in 1993 is on the verge of succumbing to Cardwell's Law. After having led the world technologically for most of this century, the United States is gradually conceding many industries, from automotive to consumer electronics, to other nations. In many ways, reading Business Week today reminds one of the British press around 1900. An urgent sense of "we are not what we used to be" permeates the writing. It is as if technological creativity is like youthful vitality: As time passes, the creative juices gradually dry up, and sclerosis sets in. Societies become increasingly risk-averse and conservative, and creative innovators are regarded as deviants and rebels.
The sentiment that "we are not what we used to be" was here in 1990s, in the decade that followed, and a variation of it is the motto of the Republican front-runner today.