Dave’s post about the British Raj reminded me about the seamy underside of the British East India Company, namely its business in drugs. Imperial trade in opium was central to the success of the British empire:
By the early part of the nineteenth century, British Indian opium had stanched the flow of New World silver into China, replacing silver as the commodity that could be exchanged for Chinese tea and other goods…Opium revenues in India not only kept the colonial administration afloat, but sent vast quantities of silver bullion back to Britain. The upshot was the global dominance of the British pound sterling until World War I… [the] data supports, without opium the British global empire is virtually unimaginable. [Link]
The British energetically encouraged poppy growing, on occasion coercing Indian peasant farmers into going over the crop. By the end of the 1830s the opium trade was already, and was to remain, “the world’s most valuable single commodity trade of the nineteenth century.”(4)… [Link]
The definition of a drug cartel is a group with a monopoly on the distribution of an illegal narcotic. The empire, in the form of the East India Company, fits the bill quite neatlyWithout opium the British global empire is virtually unimaginable:
In 1773, the Governor-General of Bengal was granted a monopoly on the sale of opium, and abolished the old opium syndicate at Patna. For the next 50 years, opium would be key to the British East India Company’s hold on India. Since importation of opium into China was illegal … the British East India Company would … sell opium at auction in Calcutta on the condition it was smuggled to China. In 1797, the company ended the role of local Bengal purchasing agents and instituted the direct sale of opium to the company by farmers.
In 1799, the Chinese Empire reaffirmed its ban on opium imports, and in 1810 the following decree was issued:
“Opium has a very violent effect… Opium is a poison… Its use is prohibited by law.” [Link]
Certainly, the British ended up doing many good things in India. Still, we should acknowledge that the roots of the British Raj lie in something as dirty and illicit as the Medellin cartel. That a bunch of dirty narcoterrorists could give birth to the world’s largest, and (relatively speaking) one of its more humane empires, is perplexing indeed.
Update. Here are the figures on the revenues generated by opium. As you can see, the revenues actually increased after the British government took over completely from the EIC:
Managed through the East India Company monopoly, opium, by 1839, accounted for around 11 percent of the total revenue of the British establishment in India, a figure that held for the next decade. After 1850, the opium produced 16-17 percent of revenues, peaking at 100 plus million rupees (10 million pounds sterling) annually by the early 1880s. Over this period of time, opium revenues equaled around 42 percent of the land tax, the other main source of monies of the British Raj. Although there was a drop-off after 1890, opium still generated around 8 percent of total revenue for the next two decades… [Link]
This is consistent with the analysis of both the EIC and the Raj as gangsters, since their top two revenue producing activities were protection and drugs.