When you're in history class and you learn about these things it seems so obvious that they were bound to end badly. In hindsight it seems obvious that the powder keg in WWI was going to explode and that Hitler in WWII wasn't going to just stop invading countries, and the temptation is to think "how did people not see that coming," but obviously that's very different when you're living through it. So did they see it coming? Obviously not every single person thought the same thing but was there a general sense that something really bad was about to happen or did they just think it was business as usual?
The reason I am asking this question is in relation to people saying now that we're on the brink of WWIII. I'm not asking anybody to discuss, support, or deny this, but when I responded to a friend of mine that I don't actually think that's going to happen, he responded "that's what they said in 1913." So I was wondering if that was really the case. These are the two most recent cases of mass destruction so did people see the tensions and events as separate one-offs that would eventually resolve themselves or did they realize that the world was on the brink of disaster?
Mussolini and the majority of the general staff in the Italian Army saw the war coming, and were doing everything possible to postpone their involvement in it as the Italian military wasn't ready to reap the spoils of a war yet. While not exactly 1938, the Pact of Steel signed between Germany and Italy in May of 1939 was under the assumption that war was coming and that the two countries needed to write 'blank checks' (to use a phrase from the first world war) of support to the other, and to officially codify that the two countries nations would streamline their political and military movements together.
The reasoning behind this pact from the Italian side was that they wished to postpone war, so as to ready the military for a European campaign. It was thought that by signing this pact that the Germans would see the state of their allies and forestall war for a time. Germany, of course, would invade Poland less than four months later. Hitler, of course, had no intention of stalling his march to war - and Italian Foreign Minister Galeazzo Ciano has noted in his diaries that he didn't quite believe the German assurances that this would bring "a long period of peace of at least three years." The Nazi Regime, in fact, didn't trust the Italians with war plans at all - Goebbels once commenting that "Italians chatter like Gypsies."
The first part of the pact was open for the entire world to see, and the language included spelled out that this was an alliance for war:
Article III: If it should happen, against the wishes and hopes of the Contracting Parties, that one of them becomes involved in military complications with another power or other Powers, the other Contracting Party will immediately step to its side as an ally and will support it with all its military might on land, at sea and in the air.
Article IV: In order to ensure, in any given case, the rapid implementation of the alliance obligations of Article III, the Governments of the two Contracting Parties will further intensify their cooperation in the military sphere and the sphere of war economy. Similarly the two Governments will keep each other regularly informed of other measures necessary for the practical implementation of this pact...
In a part that was signed in secret, language spells out that Italy and Germany will commence to acting in concert with the other:
...The two Foreign Ministers will as quickly as possible come to an agreement on the organization, the seat, and the methods of work on the pact of the commissions on military questions and questions of war economy as stipulated in Article IV of the pact....
Along with other previous events such as Germany's renouncing the German–Polish Non-Aggression Pact, the Pact of Steel was a tentpole moment that signified the belief that war was inevitable among those at the diplomatic level.
I don't know as much about WW1, but I'd say people certainly believed a war, while not inevitable, was likely to happen, in 1938. The League of Nations, the equivalent organisation to the UN today, had already collapsed at this point after it failed to stop Japan invading Manchuria, and crucially, did little to stop Italy invading Ethiopia in 1935-1936.
On top of that, Hitler was acting very belligerently. He had done many things against the Treaty of Versailles, such as remilitarising the Rhineland, and depending on when in the year we're talking, had already pressured Austria into anchluss. While this wasn't quite war, it certainly showed Hitler disregarded the world community and its rules.
However, in 1938, people still thought Hitler could be reasoned with. The next year, in 1939, Germany demanded the Sudetenland (majority German territory of Czechoslovakia). Britain and France, at the time the world powers and functioning as a 'world police', were willing to do a deal with Hitler, because they thought he just wanted to reverse Versailles (which many, especially in the UK, thought was unfair). And anyway, the Sudetenland is mainly Germans, who says Hitler shouldn't get them? The problem was, Hitler didn't stop there, nobody realised he wanted to go on a genocidal rampage and build a giant empire, but that's another story.
Basically, at least in 1938, there was certainly a sense of panic, that war might be on the horizon, but people weren't despairing. Politicians still believed war could be avoided, but tensions had certainly been rising for the last few years (in comparison, the late 20s were actually pretty peaceful with disputes being successfully solved by the League of Nations).
So as an answer, I'd say, no, people in 1938 didn't just think it was business as usual, and then war suddenly came shocking everyone. People were certainly worried about the possibility of war looming ahead.
Yes, some people saw both wars coming. Here are just two examples:
WW1. One of the most prominent predictions of a great European war came from Otto von Bimarck. Bismarck is usually credited with the unification of Germany in 1871 by using diplomacy and wars with France to unite smaller German states with Prussia. He then created a complex system of alliances between the Great Powers (such as Britain, Russia and Austria-Hungary) to isolate France and preserve the status. However, he recognized the fragility of this system and predicted that it would eventually lead to a great war:
Europe today is a powder keg and the leaders are like men smoking in an arsenal … A single spark will set off an explosion that will consume us all … I cannot tell you when that explosion will occur, but I can tell you where … Some damned foolish thing in the Balkans will set it off.
A few decades afterwards, WWI started in the Balkans.
This is not a peace. It is an armistice for 20 years.
20 years later Germany invaded Poland.
While these predictions might seem impressive, it's important to note that there are uncountable false predictions as well. In hindsight, it's easy to isolate the predictions that turned out to be true.
For example, people began predicting World War III literally before World War II even ended. Concerned by the USSR, Churchill and the British Army to begin developing plans for another war in 1945. Code-named "Operation Unthinkable" this would have involved sending 2.5 million British and American troops to attack Soviet occupied Europe.
This newspaper article from 1948 mentions the possibility of another major war. There's always been a fear of WWIII, and there's always been people predicting that it's right around the corner. Talk of WWIII has been so common for the past 70 years, both in pop culture and government.