After his Navy was destroyed at Trafalgar in 1805, Napoleon realized that if his empire was ever going to be secure, he would have to defeat Britain. With his navy gone, Napoleon knew a direct assault on island was for the time impossible, so he decided to wage economic war against the "nation of shopkeepers", as he called the British. His plan to bring Britain to its knees was called the Continental System. British goods were to be restricted from entering Europe. Napoleon demanded that his empire close its ports from British goods, and he got the Russians, Austrians, and Prussians to cooperate in the Continental System. Without having the European market to buy up its manufactures, Napoleon hoped Britain would undergo a severe depression, hurting the nation's economy and ability to maintain such a powerful navy. Meanwhile, Napoleon was building ships of his own. Napoleon wanted to hobble the British economy and give France a chance to build up its own manufacturing and industry.
The Continental System began in 1806 with Napoleon's Berlin Decree, which banned British ships from entering European ports. Britain, full of savvy traders, made a concerted effort to undermine the Continental System by contracting out its shipments to neutral vessels. Napoleon next issued the Milan Decree in December 1807. This harsh decree, aimed against smuggling, stated that neutral ships that stopped in Britain before landing in Europe were subject to confiscation.
Britain's retaliated through sea power, creating a blockade of all European ships. If Europe wouldn't allow British ships to dock at European ports, Britain wouldn't allow European ships to sail on what was then Britain's ocean.
The other nations of Europe were willing to side with Napoleon in the Continental system because for the most part they did dislike Britain. Britain was wealthy, rapidly industrialized, and isolationist. Cranking out textiles on their small island, the British rapidly became the wealthiest nation in Europe. Using its naval dominance, England built up colonies and trade networks for its manufactures that were the envy of all of Europe. So when Napoleon demanded that a Europe- wide boycott of British goods take place under his Continental System, there were many who were glad for a chance to cut Britain down to size.
The British blockade preventing European ships from sailing was not intended to "starve" Europe or make it suffer in any direct sense. Europe was capable of producing its own food and its own weapons without British help. Britain's real goal was to stop France and its allies from trading throughout Europe using shipping. In these days, there were no railways, so most transfer of goods from city to city and country-to-country was accomplished by boat. Unable to trade by sea routes, goods had to be moved about in Europe by wagons, a slower, more difficult means of transport use that were particularly poor for crossing mountainous areas. The British blockade thus severely handicapped internal European trading, which needed sea-shipping to operate at full capacity.
It is interesting to think of Napoleon's Continental System as an early kind of European Economic Community (EEC), where the nations of Europe banded together to strengthen their economy against underselling by an outside force (in Napoleon's period, Britain). The major goal of the Continental System, like the EEC, was to improve Europe's economy and give it more leverage in trading.
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