The Continental System

NOV 21 1806 · 12:00

Napoleon's Continental System at its 1812 maximum: French Empire, vassal kingdoms and allied states enforcing the blockade against British trade. Place: Berlin (the Berlin Decree) Figures: Napoleon, having just defeated Prussia at Jena · Charles Maurice de Talleyrand, Foreign Minister · Tsar Alexander I (acceding at Tilsit in 1807) · the smugglers and licensed traders who make a fortune evading it Sovereignty as Embargo Napoleon has crushed the Prussian army at Jena-Auerstedt on 14 October 1806 and entered Berlin in triumph. From the Prussian capital, on 21 November, he decrees that the British Isles are in a state of blockade, that all commerce and correspondence with Britain is forbidden, that all British goods or goods produced in British colonies found in any territory occupied by French or allied troops shall be confiscated, and that any vessel that has called at a British port is barred from continental harbors. Britain responds in 1807 with Orders in Council requiring neutral ships bound for any port closed to British trade to first call at a British port and pay duties. Napoleon counters with the Milan Decree, declaring that any ship complying with the British orders is itself British property and subject to seizure. Neutral shipping is now squeezed from both sides. American merchant marine losses are heavy; the American embargo of 1807 and ultimately the War of 1812 trace partly to this pincer. Continental Scale, Continental Failure The economic theory is mercantilist: deprive Britain of European markets and the British economy will collapse, forcing peace. The empirical result is mixed. British exports do contract sharply in 1808 and again in 1811. Smuggling on a heroic scale develops along the North Sea coast, in Heligoland, and through Portugal. The French manufacturing sector benefits in the short run but is starved of colonial raw materials in the medium run. Russian noble landowners, dependent on Baltic grain exports to Britain, suffer severely; by 1810 Tsar Alexander is permitting neutral shipping to evade the system, and by 1812 his noncompliance becomes Napoleon's pretext for invasion (see [[invasion-of-russia-1812]]). The Continental System is sovereignty deployed at continental scale as an economic weapon. It is a recognizable ancestor of every subsequent sanctions regime: the 1935 League sanctions on Italy, the Cold War's CoCom, the post-2022 freeze of Russian central bank reserves. The instrument and its limits are first tested at this scale in Berlin in November 1806. Video: Kings and Generals walks the Berlin Decree, the smuggling economy, and why economic war broke Napoleon.