The Great Depression was the most economically devastating event in world history, but it was not distributed equally. Hitler’s Nazi Germany emerged from it quickly and seamlessly, based on a quick abandonment of the gold standard, government-fueled employment, and tight controls on trade. Hitler saw his chance to break the shackles of Versailles and took it masterfully. His core army of 100,000 was trained and educated extensively on modern war, giving them a tactical superiority they would never surrender.
He also acquired a taste for international law and how to use prior agreements to make exquisite arguments. Hitler relied on the Peace of Westphalia from 1648 to establish a basic principle of international law that internal affairs were nobody else’s business. Combined with Wilson’s Fourteen Points, you had a series of contradictions. The Fourteen Points included universal disarmament, protection from external threats, and allowing people of similar ethnicity and linguistic background to form their own countries. So Hitler based his bloodless conquests of Czechoslovakia and the Rhine in lawful arguments that were difficult to deny, saying that he was merely organizing Germanic peoples and protecting his country from communists, and that it was not France or Britain’s right to say no. Pointing out that Germany was a pariah only led to arguments that it was unfair and unlawful for Germany to be treated differently by the League of Nations. Hitler was also persuasive in describing himself as a strong buffer between western Europe and communism. Knocking off Hitler and installing a puppet government would not only inflame German nationalism but could bring the communists to the Allies’ doorstep.
So the world appeased Hitler. His seizing of the Rhine was deemed lawful – no other European country had demilitarized zones, so it was unfair that Germany had them. When he annexed Austria, he seized a country populated by ethnic Germans. He took over Czechoslovakia to guard his weak flank from an enemy government, something nobody else in Europe faced either. By this time, Britain and France were wary of Hitler, but military advisers correctly pointed out that air warfare would bring the horrors of the trenches to civilians far from the front. Neville Chamberlain blackened his reputation for all time by trying to spin it as “peace in our time”.
Britain and France doubled down at this point, guaranteeing the independence of Poland while knowing that Hitler’s ultimate intention was to enslave the Slavic populations of Eastern Europe. Hitler knew they were bluffing, but Chamberlain also thought Hitler was bluffing. He was, after all, a veteran of World War I, and nobody who knew that war wanted to repeat it, right? Chamberlain had no real plan if deterrence failed and Hitler invaded.
In the meantime, Stalin was trying to understand Hitler and vice versa. The Nazi-Soviet Alliance is one of the most perplexing agreements of all time. The best guess is that Stalin was hoping for a repeat of World War I on the western front, that Germany and France would destroy each other so that the USSR could foment a Bolshevik Revolution in western Europe exactly as it had occurred in Russia. Hitler is easier to understand – he wanted to avoid a two-front war and Soviet neutrality was critical to have any chance of putting down France and Britain.
It’s easy to laugh at 1930s Europe for appeasement, but keep in mind that only two countries declared war on Hitler: France and Britain. Every other country waited for Hitler to declare war first, or more often, to simply attack them.
More surprises: France was conquered in six weeks, on the back of air and manuever warfare through the Ardennes and not Belgium. Britain decided to fight and dare Hitler to cross the English Channel rather than negotiate a peace as the only Allied nation still standing. And Stalin ordered his troops to stand down and avoid provoking the approaching Germans, the only time in his life where he would advocate peace above violence. His moment of virtue was rewarded with the Luftwaffe destroying the Soviet Air Force on the first day of the war and the SS taking 4 million Russian prisoners where they stood and eventually killed them all.
Over in Asia, World War I served as a powerful stimulus for Japanese industrialization. They honored their agreements with Britain and declared war on Germany, but their actions were restricted to seizing German colonies in the Pacific. However, Japanese industrialization took a strange form because of their militaristic culture. The typical factory worker in 1920s Japan was young unmarried women, a problem for businesses requiring a cadre of long-term and experienced managers (women would permanently leave the workforce when they became pregnant). What developed was their lifetime employment program, where businesses attracted males by promising a lifetime of employment, health insurance, and pension. It is possible but not conclusive that lifetime employment shielded Japanese workers from the Depression. In the end, the Depression shocked but did not cripple the Japanese economy; instead, it provided another stimulus that the West was in crisis and Japan could seize the moment to replace European imperialism in Asia with its own.
In 1931, Japan turned expansionist, invading and conquering Manchuria just as Hitler had taken the Sudetenland. But to continue operations and take on China, it needed a constant flow of oil either from the United States or the Dutch East Indies (Indonesia). It invaded China in 1937 and became a wartime economy. Eager to extend what little influence he had with an isolationist Congress, FDR embargoed oil to Japan in 1941. Faced with either stopping or seizing Indonesia, Japan elected to strike first, bombing Pearl Harbor and crippling America’s B-17 force in the Philippines.