The movie is supposed to be from 1933 or 1934, i.e shortly after Hitler came to power. Saying, however, that people at that time could not foresee what nazism would become is NOT a valid excuse. While I acknowledge no one at the time could have predicted the scale for example of the Holocaust, it is also true that Nazi ideology and methods were well-known by the time Hitler rose to power (Mein Kampf was written in the 1920s and stormtroopers and intimidatiion were standard Nazi practices before the party was in government).
Besides, fascism itself was an authoritarian and undemocratic form of state organization. Mussolini had been a dictator for over 10 years in Italy by 1933 and, after the Enabling Act in Germany, Hitler had banned all other political parties and turned parliament into a symbolic rubber-stamper. There is NO WAY an educated person with genuine liberal convictions ( in the Anglo-Saxon tradition) would mistake fascism just as a movement for " order and discipline" .
Yes, communism was probably the biggest fear of the Western elites in the 1930s, but what sets Britain, the US, Scandinavia or tbe Benelux countries apart from Germany, Italy, Spain or others is precisely that, instead of turning to fascism as a response to the Depression and the threat of communism, they stuck to their own liberal democratic values. Much has been said about Fascist movements in Britain in the 30s, but the historic fact is that fascism, às a political movement, never enjoyed great electoral success in the UK. Personally, I'm glad though that Edward VIII was not the King in the course of WWii. Although he probably could not have prevented Britain from going into war in 1939, he could have been a factor in pushing for an armistice in 1940.
That's an interesting view you present.
I'm afraid I have a less positive of how deeply rooted the democracies really were around WWII. In fact most of the democracies back then were only about two or three generations old. And if we consider women's right to vote as well as the poor, the democracies were on average only true democracies for less than a generation.
In fact I can easily imagine Britain becoming more totalitarian after a peace in 1940 or even 1941 - or just as bad becoming Communist.
It was the chaos and the political mess, reinforced by the fear of Communism that allowed the Nazis to come into power in Germany as well as Italy before that, and later Spain. Poland was on the verge of becoming outright fascist.
It is interesting to speculate whether Adolf Hitler and his party would have survived politically for long had Hindenburg lived just a few years longer. Hindenburg had almost saintly status and in a way he was a substitute Kaizer. From all accounts he loathed Hitler. Wonder if Hindenburg could have blocked Hitler, had he lived just a little longer?
As for the Scandinavian countries. Well, they had become Social Democrat and that suited the tribal mentality there well. In fact we are basically still social democrat societies regardless of what political constellation is in power. But Scandinavia would nevertheless IMO have had very good reason to fear a Communist takeover.
As for USA, well, there are IMO at least two, perhaps three occasions where USA could have become more or less totalitarian.
After the Revolution, where it was considered to appoint a kind of king and where the situation, politically and economically was unstable.
After the end of the US Civil War, where general Lee spoke against the south fighting on in a kind of guerrilla war, that would have required brutal means to suppress. (Remember that the Union was perfectly capable and willing to be very brutal. See Sherman's march to Atlanta).
And perhaps during the late 1950's if McCarty had been more bright and had a wider public appeal, perhaps reinforced by the troubles during the 1960's. The atmosphere was certainly ripe for a "strong hand" to take charge.
So the risk of extremists taking over is very real! Everywhere. - Right now it happens in the Muslim countries.