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Bismarck was one of the wisest politicians of the XIX century. After he used the military force to forge the new German state, he had spent the rest of his political career carefully maintaining peace. Too bad that giant was replaced by the shortsighted, bloodthirsty dwarfs.
Bismarck also helped set the stage for the European alliance system, though.
Was the alliance system naturally a bad thing? European alliances had been around for several hundred years by the late 19th century. England's policy was to align itself with the 2nd strongest continental power. Had done it for 200 years before. Alliances were a natural mechanism to attain a balance of power. Existence was preserved at the price of peace.
If Wilhelm II had not been born with a bum arm things might not have gone the way they did. He was rejected by his mother and turned to a welcoming military for acceptance (short version). https://www.youtube.com/watch?v=geB2Uvkionc (long version). This could have been a bigger factor than alliances.
Bismarck, von Roon, etc. had helped turn Europe into an armed camp. They had to to achieve the goal of German unity under Prussian leadership. If it were possible, and I don't know if it were, to scale back the military after 1871 things could have turned out differently. Germany had a secure border with France. Russia and Austria were monarchies while France and England were republics: a natural divide and potentially a stable one if tensions and then rivalries could be managed.
But maybe Bismarck's foresaw the inevitable: “One day the great European War will come out of some damned foolish thing in the Balkans." The cavity created by Ottoman decay was crying to be filled.
Alliances played their part and then some in responding to the spark when it came.
When exactly does the amount of annexed territory become "too much," though?
Uniting the German states was seen as reasonable since they had a common cultural and ethnic identity. Annexing Bohemia would have been interpreted as somewhat aggressive. It may have given off the suggestion that Prussia was not content with just ruling over ethnic Germans, which obviously would have alarmed its neighbors.
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