How does a Buddhist survive in a harsh world?

In Sri Lankan history there were instances where the monks disrobed an participated in the wars to protect Buddhism.

In this kind of question there is no right answer. In face of invaders trying to destroy Buddhism, if you did not fight back then there would have been no Buddhism by now.

Buddha knew that both States did have strong armies and that they are needed for the protection of their people. Buddha did not advice minister Vassakara that the concept on 'Army' is against Buddhism and that he should advice the king not to declare war against Vajjis but to desolve the army. Buddha at this instance also brought up important lessons in 'state craft.'

Buddhism & The Soldier by Major General Ananda Weerasekera

Continue being gentle and compassionate with loving kindness, and get eaten.

There are instances where this also has succeeded. E.g. Mahatma Gandhi's fight for Indian freedom was done on total non violence and also won.

In Sri Lanka there is a saying which says if someone is continuously attacking you when you are compassionate you are a fool. If you keep attacking someone who always compassionate you are a fool. In this light some middle road perhaps might be chosen, and depends on the situation, the opponent, etc.

Also might be of interest: The Buddha and the Four-Limbed Army: The Military in the Pali Canon - Matthew Kosuta Ph.D.

In MN8 it says:

"But herein, Cunda, effacement should be practiced by you:

(1) Others will be harmful; we shall not be harmful here — thus effacement can be done.

(2) Others will kill living beings; we shall abstain from killing living beings here — thus effacement can be done.

(3) Others will take what is not given; we shall abstain from taking what is not given here — thus effacement can be done.

...

(44) Others will misapprehend according to their individual views, hold on to them tenaciously and not easily discard them;[18] we shall not misapprehend according to individual views nor hold on to them tenaciously, but shall discard them with ease — thus effacement can be done.

"So this raises a dilemma. Continue being gentle and compassionate with loving kindness, and get eaten. Or react harshly when necessary and risk darkening ourselves. Or, is there a proper middle path?"

Buddha was actually very clear on that subject. As in The Simile of the saw:

"Monks, even if bandits were to carve you up savagely, limb by limb, with a two-handled saw, he among you who let his heart get angered even at that would not be doing my bidding. Even then you should train yourselves: 'Our minds will be unaffected and we will say no evil words. We will remain sympathetic, with a mind of good will, and with no inner hate. We will keep pervading these people with an awareness imbued with good will and, beginning with them, we will keep pervading the all-encompassing world with an awareness imbued with good will — abundant, expansive, immeasurable, free from hostility, free from ill will.' That's how you should train yourselves.

But I don't think that these two qutoes say that you should behave passive and let others abuse you all the time. If you have compassion for others, you don't want them to make unskillful actions which you can prevent.

The historical assumptions in the examples are questionable, both WW2 & Buddhism.

As for Buddhism:

(1) It became extinct in India, the land of its birth.

(2) It became extinct in Persia & Afghanistan, the first regions of its expansions.

(3)It became a ritualistic feudal dictatorship in Tibet.

(4) It often encountered great conflict & opposition in China.

(5) It was a minor religion in Japan.

(6) It became virtually extinct in Indonesia, with some principles surviving in Hindu Bali.

(7) It was in such decay in Ceylon, at the time of colonialism, the order of monks had to be restored by the Burmese.

(8) It flourished in Burmese, after wars over Buddhism by the Burmese

(9) It flourished in Thailand, even though the monks, probably learning from their mistakes in India, did not act to change the other indigenous religions.

(10) In the USA & the West, Buddhism is often dominated by left-wing ideologies.

(11) Overall, to expand, Buddhism has generally always sold-out (betrayed) its core principles to gain supporters.

In brief, unlike the doctrine of Machiavellianism (which is based on competing over the world), Buddhism survived when it did not compete for & interfere with the world.

If you think current world is harsh, what essentially you need to understand is, the world only gets worse. Tomorrow is never going to be better than today. Real buddhists should never conflict with the harsh world. They need to understand the transient, evanescent and inconstant nature of the world and attain nibbana as soon as possible while Buddhism exists.

Law of Cause and Effect and Dependent Origination (hethu pala Dhamma and the Paticca Samuppada)

You get what you deserve. No one has got anything that they don't deserve and also no one hasn't got anything that they don't deserve.

If something bad happens to you, that's because you have done something like that in the past for someone.

If something good happens to you, that's because you have done something good like that in the past. That's the truth Buddhists needs to understand first. If you can look at things in that way, then you are in the way to attain nibbana.

So this raises a dilemma. Continue being gentle and compassionate with loving kindness, and get eaten. Or react harshly when necessary and risk darkening ourselves. Or, is there a proper middle path?

I hope this is a false dilemma.

Some of the Buddhist principles that might help you to prosper (rather than "to be eaten") include:

• Right livelihood (work for a living, don't cheat people, have fair business dealings)
• Have good friends, but avoid bad friends
• Be cautious, prudent, avoid being irrational or ignorant, when making decisions about business and family etc.
• Save part of your earnings (which will help you to survive thieves and taxes and so on)
• Equanimity (be kind but don't be swayed too much, don't be swayed more than is proper, e.g. to help other people with their misfortunes -- remember that each inherits their own karma)
• Generosity (if you do benefit someone, don't feel that you suffer that as a loss)

The best example would be the Axis Powers during World War 2

I'm not sure that's a good example. Buddhism includes doctrine like,

3. "He abused me, he struck me, he overpowered me, he robbed me." Those who harbor such thoughts do not still their hatred.

4. "He abused me, he struck me, he overpowered me, he robbed me." Those who do not harbor such thoughts still their hatred.

5. Hatred is never appeased by hatred in this world. By non-hatred alone is hatred appeased. This is a law eternal.

I'm not a historian but, for example, perhaps if the "allies" had been more generous at the Treaty of Versailles in 1919 at the end of WW1, if the French hadn't wanted to further weaken defeated Germany as much as possible, then the conditions wouldn't have arisen for Germany to want to go to war again 20 years later. Maybe ditto if the USSR hadn't made a secret non-aggression pact with Germany in 1939 (which it did maybe because of its own fear of Germany but also because of its own greed to invade Eastern Europe). Maybe they're all, you know, a bit guilty: could have done better.

If you react harshly, where does that ever stop? And what behaviour do other people learn from you?

Yet, Buddhism has survived 2500 years and even flourished at a time where war and cruelty were rampant. So there must be something there, and it bugs the heck out of me.

Well, social cooperation (rather than social aggression) is maybe a winning strategy. For example people respect (and try to help) Buddhist monks, partly because they are intentionally harmless.