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Here’s what Professor Hunt Tooley, who covers World War II for us, has to say:
1. I was just teaching Omnipotent Government in my Mises “Totalitarians” class, and I was really surprised (after not really reading it through for twenty years) to see that Mises was in a sense promoting the Allied cause to smash Hitler (just a little bit). I explained this passage from Mises in this way: in the exigency of the moment, in the immediate short term, with Western Civilization falling down around his head, of course Mises wanted to see the Nazis beaten. From the vantage point of that moment, I would have too!
2. But of course in the longer term, Hitler was the product of the WWI intervention. To elaborate just a bit, this worked, of course, in several ways. For one thing, the entry of the United States in April 1917 came at a time when the Entente Powers were on the verge of falling apart. If we think of the spring of 1917, with the enormous French Mutiny and even more extensive mutinies in the Russian frontline forces, as well as the disastrous Kerensky Offensive in the summer of 1917 and the spectacular German-Austrian breakthrough against Italy at the Battle of Caporetto in the fall! Well, even with the beginnings of increased American money, material, and troops, the Entente was losing. As late as April 1918, British Field Marshal Haig prepared a general order for the case of defeat and evacuation of the BEF from Europe. Hence, the spectacular impact of Pershing’s armies and the defeat of the Germans within a few months of the Americans’ arrival converted the Depressed Entente to a Manic Entente. “Right back up on top,” to take line from “O Brother Where Art Thou?” In this manic mood, but still mindful of a close call, the Allies just poured it on. Hence the Treaty and the whole mood of the Treaty.
3. And the Allies continued the Blockade. Yes the currency was ruined by one means or another. But also, real, honest-to-goodness starvation stalked Germany up until 1920 and in some regions later. Literal starvation. The populace read all about the reparations and guilt issues, and they also knew that folks in Germany were starving.
4. And further, in by the late twenties, there was the American “colonial” arrangement of ties to the international banking regime of unstable currencies, colonial-type loans–the Dawes and Young Plan regimes–and then of course the Depression). All of this was owing to the same individuals and institutions who had created the Fed in the previous decade.
5. Finally, and in an even longer term, Hitler was the product of statism arising from Marx, Comte, the New Imperialists, the various sects of aggressive social Darwinism, etc. So the long term matters a lot here. Without the state, without the war-steroids which WWI acted as, then no Hitler (or Mussolini or even Lenin).
So any answer to this really good question has to start with the kind of long-term view of the previous interventionism.
6. What then could have been done in World War II? Well, counterfactual historical analysis is dangerous but sometimes useful. If the US had remained neutral, Churchill would have had to negotiate, I would assume. At least in 1940 or 1941. If the US had been standing aside, the Soviet Union would have run out of tanks and planes etc. If the US had not intervened, then the world would had, at least indirectly, the advantage of cheaper goods (certainly the goods in the US which were NOT produced because production was diverted to the war).
Further, if Stalin had not felt sure of US backing, we might ask how that might have shaped the Nazi-Soviet relationship?
And certainly, we might ask–since the mass killings and ethnic cleansings of Jews, Gypsies, Poles, Czechs, Russians, and many others took place under the cover of war and with the “exigency” argument of war therefore always at hand for Hitler, Himmler, and Goebbels—would the horrible brutalities that were unleashed by both Hitler and Stalin under the cover of this war have been carried on in with the same ferocity had the US not been perpetuating the conflict first with resources and then with participation?
And you see the drift here. I find myself thinking of the Broken Window Fallacy. We see what DID happen and say, “Well, in that overwhelming situation we had to intervene, because all these bad things were going on.” But we can’t be completely sure that US intervention didn’t prolong the war anyway. Without adding up some numbers, but having been looking at the figures recently, I would estimate that in December 1941, the total number of Jews killed by the Germans in eastern Europe was under 400,000. As horrible as this number is, it is about a tenth of the eventual total.
7. No mistake, the Totalitarians who emerged from WWI were all brutal. And Stalin clearly needed no war to kill his own people. But Hitler seems to have needed one for the most enormous of his crimes (this is the direction of most of the recent research).
8. Finally, in terms of calling WWII a “failure of noninterventionism,” I would argue that the United States was intervening in most issues pertaining to what would eventually become World War II throughout the twenties and thirties. Just because the US didn’t sign the Treaty and join the League, this did not mean “isolation” in any sense. And especially in areas related to finance and trade, the United States was intervening in myriad ways throughout the thirties especially. (I have already mentioned the massive diplomatic/political/financial measures of the Dawes and Young Plan loans). If we think of the series of subventions of Britain, freezing of assets, US support for British goods, diplomatic efforts to detach the Soviet Union from Hitler, etc., one could hardly say that the United States was not “intervening.” The only thing we didn’t intervene in from 1939 to December 1941 was sending troops. But of course throughout most of that period, until June 22, 1941, Hitler and Stalin were allies. Once the Soviet Union was on the Allied side, we intervened militarily within just over five months.