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The phrase referred to his policy of uniting Germany by force, under the leadership of Prussia. Bismarck (1815-1898) was prime minister of Prussia and was a major force behind the unification of Germany in 1871.

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Not just force. "Blood" in this context isn't blood shed in war, it's common German nationality, give or take Austria. His approach involved a lot of politics too. But the final decision came down to war (the clash of "iron").

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