Peace is a state of affairs where human beings need not worry about physical force being initiated against them. It can be said that the United States and the United Kingdom are at peace: nobody this side of a mental asylum expects the US Marines to storm London. Similarly, the French are not concerned about an attack from the British or the Germans. Indeed, the vast majority of the western world is at peace.
For much of the 20th century, and much of history, Europe was a notably peace-less continent. Its history is full of stories of kings, emperors and dictators clamouring at each others throats for spoils. In statist (that is, non-capitalist) countries, the initiation of force is the method by which one survives, or temporarily subsists. Regulation, persecution and an overbearing and undefinable threat of punishment make production all but impossible. Throughout history, all statist countries have struggled to feed themselves - let alone to prosper. This forces them to resort to taking the resources of their neighbours - and since men are not willing to defend themselves and their neighbours from looting, they are certainly not going to defend the rights and property of foreign nationals. Ayn Rand's "The roots of war", from Capitalism: The Unknown Ideal, explains this in detail. Observe that it was the decision of Germany and the USSR, the two most statist countries of Europe, to declare war on Poland. It cannot even be said that war is an example of disputes between statist and free countries, as Germany and the USSR soon began their own, far bloodier, conflict.
Yet today Europe is a continent of trading nations, who are mostly free to produce and trade with each other. European war, while being a terrifying threat to the last generation, is not even imaginable to the current. Capitalism, even in its crippled, regulated, mixed-economy state, has given the continent a record period of peace.
Similarly, Japan is no longer a hostile dictatorship - it is now a major western ally, a leading industrial producer and is widely considered at the forefront of much technological research.
Since peace is so clearly a critically important part of human life, it is important to understand what it was that transformed the statist aggressors into peaceful, free nations.
Hitler's Germany was crushed during the Second World War. Without compromise its institutions were destroyed, its leaders tried and punished and its people shown, through devastating attack, that theirs is not a tolerable way of life. Yet far from alienating the Germans, it has made them a prosperous, friendly and free nation. Germany today has much to thank its former enemies for.
Japan was dealt with in a similar manner, the atomic bombs at Hiroshima and Nagasaki demonstrated to a culture based on devotion to government ideals at all cost, that surrender is the only possible option. Japan was not alienated or angered, it did not rebuild itself before getting its revenge on the west. Japan again became a western ally, and one of the first countries in the history of all mankind to write a constitution making the concept of peace explicitly sacred.
The 20th century was proof, beyond all doubt, that statism is the root of war. The acts of war were all the proof required to show that statism is a cancer man can no longer afford to tolerate, if any more proof was needed.
Yet today, appeasement of statism is widely celebrated as the root of peace. The Nobel Peace Prize, the supposed highest recognition of efforts to bring about peace, has recently been awarded to US president Barack Obama - presumably for his continuation of the long standing policy of appeasing the Islamic dictatorships in the east.
"Peace in our time" is an achievable goal - yet only if we are willing to recognise and practice what makes it possible: a zero tolerance approach to statist nations, and a relentless moral fortitude to hold that the warlike, statist way of life is intolerable and incompatible with civilization.