The continental system - Why it failed.

Ben Gershaw 2.3.03

The Continental System – Why it failed

The Continental System can be seen as a failure right from the start. The French suffered from a lack of sea power, triggered by their horrific defeat at Trafalgar, when almost all the navy was destroyed. With the remaining ineffective navy, and a poorly constructed and corrupt customs service, smuggling by the British became very common. Goods that were banned were brought in by British smugglers who dodged the blockade with the help of French subjects who were against the blockade (in fact a few historians suggest this was the biggest form of civil disobedience in Napoleon’s era).

Many industries in France greatly suffered from the Continental System, especially those related to maritime industries (ship building, sail-making etc.) Industries in the North and West of France suffered the most. These were severely in decline and technologically backward, and they were badly hit with a loss of exports. With this decline in overseas trade and increased profits, older industries had little capital, and investors moved their money out of commercial enterprises. Several merchants and banks collapsed due to a lack of business confidence.

Many industries in France greatly suffered from the Continental System, especially those related to maritime industries (ship building, sail-making etc.) Industries in the North and West of France suffered the most. These were severely in decline and technologically backward, and they were badly hit with a loss of exports. With this decline in overseas trade and increased profits, older industries had little capital, and investors moved their money out of commercial enterprises. Several merchants and banks collapsed due to a lack of business confidence.

One serious and adverse effect of this blockade was from Napoleon’s bold attempt to try to enforce it on the whole of Europe i.e. his Empire. These attempts pushed the French into disastrous new expeditions and battles, the most important of which were in Spain/Portugal and Russia. Napoleon invaded Portugal and then occupied Spain in 1808. The Spanish rebelled and with financial and military support from Britain, they tied Napoleon's armies down in a long guerrilla war. Even Napoleon's personal intervention with 150,000 additional troops could not stabilize the French takeover. The French continued to win many battles but were gradually losing the war in Spain and Portugal. By 1813 Portuguese, and Spanish troops with British support had driven out the French.

The Continental System never had the disasterous effect upon Britain which Napoleon would thought would occur. The British economy was almost completely unharmed. Although there was a small depression in 1707-8, two years of boom followed. After 1812, British businessmen enjoyed great prosperity never seen before. The system failed because the French could not provide the same manufactured goods as Great Britain for even somewhat similar prices. Thus, despite official prohibitions, massive state intervention, and the expansion of the country to include prosperous areas in Belgium, Germany, and Italy, France could not compete with the rapidly industrializing British.

Another serious effect was that it led to the upper-classes (Bourgeoisie) withdrawal of their support for Napoleon. This was a result of economic collapse in France in 1810. The expense of the wars, over-smuggling of goods and hyperinflation were some of the causes of this. Wages were steady but raw material prices rose as companies borrowed large sums of money, but widespread backruptcies followed and unemployment soared.

Napoleon did try to take drastic action against smugglers. He seized and destroyed contraband items and instituted licences to stop trade with the ‘enemy’. In 1809, there were large increases in customs revenues and attempts to get rid of large surpluses of wine and grain stocks that had been a result of the blockades.

By 1813 Napoleon was in desperate need of money to finance new campaigns, so the Blockade was no longer of any significance as an economic weapon of war.