The Continental System
Napoleon's Continental System, proclaimed in the Berlin Decree of November 1806 and extended through subsequent decrees, was an attempt to destroy Britain economically by denying it access to European markets. It was the first comprehensive economic warfare strategy in modern history — a recognition that financial and commercial power could be targeted as directly as armies.
The Strategic Logic
By 1806, Napoleon had defeated Austria, Prussia, and Russia in rapid succession. Britain remained at war, protected by geography and the Royal Navy. A direct invasion was impossible after Trafalgar (1805). Napoleon's response was to attack Britain's commercial foundation: "Let us conquer the sea through the land."
Britain's economy was the most commercially developed in the world, with substantial export trade to Europe. Napoleon reasoned that if European ports were closed to British goods, British manufacturers would be unable to sell, British merchants would fail, and the financial system underwriting Britain's war effort would collapse. Without credit, Britain could not subsidise its continental allies.
The system required European compliance: no French ally or client state could trade with Britain. The scope was extraordinary — it ultimately covered France, Spain, Portugal, Italy, the German states, and was intended to encompass the entire European coastline.
Why It Failed
The Continental System failed for several reasons:
Smuggling: Denying 180 million Europeans access to British manufactured goods — which were often cheaper and higher quality than Continental equivalents — created enormous incentive for evasion. Smuggling networks from Sweden to Sicily operated continuously. Napoleon's own marshals reportedly wore British-made uniforms.
Continental hardship: The system hurt Continental economies that depended on trade more than it hurt Britain. Sugar, coffee, and colonial goods that arrived through British trade networks disappeared from Continental markets. Popular opposition to the system eroded compliance.
Portugal and Russia: Napoleon invaded Portugal in 1807 when it refused to comply, triggering the Peninsular War — a ruinous drain on French resources. Russia withdrew from the system in 1810 when it damaged Russian trade; Napoleon's subsequent invasion of Russia in 1812 was in large part a response to this financial defection.
Britain adapted: Britain developed new markets in Latin America (following Spain's weakening) and maintained trade through neutral countries. The system inconvenienced Britain; it did not break it.