Long-term effects of the Napoleonic wars on International Business

Long-term effects of the Napoleonic wars

The Napoleonic wars had a broad range of consequences on Europe and its economy. Even if accused of slowing down the growth of the economy at the beginning of the 19th century, the end of the wars had tremendous effects on Europe and international trade, creating a new world order. Whereas the British Empire was thriving with its colonies, almost ruling the seven seas, continental Europe refocused to a more local market, divided between the declining French Empire and Eastern Europe. The great technological advances of the early 1800’s would lead the old continent into its industrial age driven by steam, coal and steel.

In Britain, this great revival was first witnessed in the early 1820’s. With the fall of raw material prices and the increased use and efficiency of heavy machinery, factory workers’ efficiency increased in some manufacturing areas from ten to a hundred times. This resulted in cheaper manufacturing goods and a rise in per capita GDP, allowing the country to regain its momentum. Although a second depression at then end of the twenties occurred, mostly due to overconfidence and colossal foreign investment by the government of the exhausted country, the path was set for a glorious century led by the power of steam. The flourishing state of all manufacturing branches was mostly induced by increased exportations, especially to the new markets of South and North America.

The uncertainty immediately following the war also led to the creation of several new businesses. The large government borrowings during the war had created a new class of Fund holders and the uncertainty of the land and housing market ushered the creation of real estate state businesses with expert agents. Optimism and increasing wealth created a boom in joint-stock enterprises; anyone could venture their savings and become a shareholder. The result for Britain was a shift from medieval trading to a new era of even broader specialization and diversification.

In Continental Europe, the same transformation occurred in a different manner and set by Napoleon’s revolutionary way of doing business that still remains in use nowadays. After the abolition of the guilds, businesses needed a new way to settle disputes between employees and employers. This led to the creation of the “Conseil de prud’hommes” in 1806, a committee of manufacturers and workers that would provide conciliation or judgment in case of dispute between two parties of the same business. This council was the first of its kind, using the expertise of both manufacturers and workers from the same industry to reach a fair settlement. This system proved its worth over the ages as it remains in use today, in France and in the seven other countries that adopted it over the next century after its creation. The creation of the “Code Napoléon”, referred nowadays as the Civil Code also had a great effect on France’s legal system and still remains in use nowadays in Continental Europe and other parts of the world (such as Québec).

These new laws and the progressive increase in urban taxation drove the industries outside of the cities creating a ruralization period of the industry. With new technological advances, the need for new materials was expressed by a tremendous development of the Ruhr area in between France, Germany and the Benelux. The presence coal and iron ore generated an immense rush towards the area where mines where flourishing at a period where steam was king. With the technological advances in inland transportation, canals, railways and roads, trade was no longer concentrated on the seas, reducing the need for imports and exports during this period, focusing on intra-continental trading. The once successful Atlantic trade was now replaced by industrialization in the large regions located between the Seine in France and the Elbe in Germany, focused towards the Rhine.

This distinction between British and Continental trade persisted throughout the ages and is still visible today. Whereas the Empire of the seas is mostly focused on worldwide interests, the rest of the Old Continent’s manufacturing remains mostly aimed at national and neighboring markets, hence the creation and expansion of the European Economic Union, in which the United Kingdom still tries to remain independent.