The Britannia Cartel (updated)

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:

Indian opium helped the British rule the world

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.

78 thoughts on “The Britannia Cartel (updated)

  1. Ennis,

    You’re joking about that link to the rediff article about Dr. Singh’s acceptance speech at Oxford — I hope?

    I doubt he was. I am not even sure how that would work – joking about a link?

    That link is a poor reference in the first place. Here is the full text of the speech. You can see that Manmohan Singh talks about education, etc. in the context of a collapse of India’s share in world income.

    The conferral of Mr. Singh’s degree is as much a political event as an academic one, and the speech must also be viewed in such terms.

  2. Still, I love that one line of his out of the whole piece was nit-picked, as a belive the whole gist of his article was that the British were dirty drug peddling scum.
    Not! There was precious little Ennis wrote in the article in the first place,

    I see – so you believe that the post, and the quotes that I selected, grew up on their own and that I had nothing to do with them. In fact, that I quoted them for reasons entirely random, like a meteor striking the earth, and that they do not represent my opinions? The purpose of the post was to talk about the centrality of drugs, not just to the East India Company, but to the Raj as a whole. The quotes are about the empire.

    Agree or disagree as you wish. But it’s bizarre to look at a majority of the text that I put together and dismiss it as if it has nothing to do with me.

    You’re joking about that link to the rediff article about Dr. Singh’s acceptance speech at Oxford — I hope?

    Why? Manmohan Singh made an argument about some good things that the British did. I linked to it to justify the claim that the British did some good things. If I had known that this would be the focus of debate, I would have linked to a full copy of his speech instead.

    The British did good things and they did bad things. Yes, they were foreign. Yes, I think independence was a good thing.

    I have no idea what you all are smoking that makes you think that this post is in some way an apology for British rule.

  3. Here is the full text of the speech.

    Actually, it is an excerpt of the speech. Anyhow, the point is that the link to the rediff article is a terrible reference in the first place. What you quote might have something to do with what you know.

  4. Shyam – you must be horribly popular around the office. If somebody makes a decision that you don’t understand, do you call them ignorant? You don’t know me, nor do you know what I know or do not know. You’ve presented a horribly distorted reading of my piece that shows no comprehension or sympathy. And yet, you continue?

    I don’t have time to explain myself to you, in the middle of a busy work day. Nor do I think you would be inclined to listen. But for the rest of you – I actually looked at both links, and chose the shorter one originally b/c I thought that people would be more inclined to read something succinct. In retrospect, it was a mistake, and I’ve changed the link.

    Sheesh.

    And here I thought my main problem would be with people defending the British, who were offended by what I said.

  5. Ennis,

    I sympathize with what you are trying to say. However, I am not satisfied with what you are, in fact, saying. I have indicated, for instance, your choice of using the word ‘perplexed’. Now I admit that looks nitpicky, but what about the rest?

    The definition of a drug cartel is a group with a monopoly on the distribution of an illegal narcotic.

    A cartel is an oligopoly. It may not have a monopoly on distribution. For instance, it could control the production of the drug.

    The empire, in the form of the East India Company, fits the bill quite neatly. Without opium the British global empire is virtually unimaginable

    The empire was never in the form of the East India Company. The Empire was always independent of the East India Company. The East India Company was a commercial entity.

  6. I tend to agree with Kush Tandon’s point that the Raj was more complex than we think. Recently, scholars like Prof. Deepak Lal have noted that the Raj seemed to have two distinct characters. The early british empire created a liberal international economic order which had very positive benefits. According to Lal

    “The main attributes of the LIEO imposed by the British in the 19th century were free trade, free mobility of capital, sound money due to the gold standard, property rights guaranteed by law, piracy-free transportation thanks to the Royal Navy, political stability, low domestic taxation and spending, and “gentlemanly” capitalism run from the City of London.”

    However, the nature of the Raj morphed during the 19th century & this LIEO ethos broke down & was replaced by what is now known as 19th century imperialism. This imperialism was in part motivated by the civilizing mission embodied in the “white man’s burden.” It is this version of the Raj that we know today.

  7. The empire was never in the form of the East India Company. The Empire was always independent of the East India Company. The East India Company was a commercial entity.

    Shyam, your statement about the difference between the East India Company and the Raj was a blanket assertion that implies that I’m a dolt, and it’s not accurate to boot. The lines between the EIC and the Empire were blurred, as they were for most of the chartered companies and their home empires.

    When the company acquired control of Bengal in 1757, Indian policy was until 1773 influenced by shareholders’ meetings, where votes could be bought by the purchase of shares. This led to government intervention. The Regulating Act (1773) and Pitt’s India Act (1784) established government control of political policy through a regulatory board responsible to Parliament. Thereafter, the company gradually lost both commercial and political control. Its commercial monopoly was broken in 1813, and from 1834 it was merely a managing agency for the British government of India. It was deprived of this after the Indian Mutiny (1857), and it ceased to exist as a legal entity in 1873. [Link] What opinion in Britain came to recognise as a new British empire in India remained under the authority of the East India Company, even if the importance of the national concerns now involved meant that the Company had to submit to increasingly close supervision by the British state and to periodical inquiries by parliament. [Link] The British East India Company was probably the most successful chapter in the British Empire’s history [Link]
    East India Company. Act, 1773 By this Act, the Parliament of Great Britain imposed a series of administrative and economic reforms and by doing so clearly established its sovereignty and ultimate control over the Company. The Act recognized the Company’s political functions and clearly established that the “acquisition of sovereignty by the subjects of the Crown is on behalf of the Crown and not in their own right.” [Link]

    The chartered companies were granted imperial charter as a cheap way to pursue national interests without the explicit costs of empire. While there are incidents where they worked at cross purposes from the crown, at many other times they worked closely. Over time they came under greater supervision until they were entirely annexed. As the second and third quotes point out, India under the East India Company was seen as part of the Empire by British at the time as well as historians afterwards. As the fourth quote points out, the EIC was seen as working for the crown as early as 1773.

    You’re right, I elided some things that have subtle but important distinctions between them. That’s the problem with writing a short post on a complex topic. Still, I stand by the overall thrust of my post. I wasn’t trying to have an erudite discussion of Pitt’s India act, I was trying to make a broader point about opium and the empire. This comment here is almost as long as the original post!

    Instead of wasting my time by challenging me to defend myself, why don’t you simply check the basic sources on the topic yourself? Even Wikipedia would have sufficed. Instead of nitpicking, why don’t you try constructive commentary? If you thought that I mixed up the Raj and the EIC, you could always have documented the ways in which they were similar and different, which might have educated us. Instead, you nitpicked, made blanket assertions, and really didn’t add to the dialogue. You seem quite intelligent, but you’ve got appalling manners at times.

  8. -sigh- Good job, Ennis. I thought it was a good post. However, I also learned a lot from the comments, thanks to some commenters’ determination to refute people like Guarav and Shyam. It’s odd how stupidity can sometimes bring about intelligent discussion – and maybe even progress.

  9. I’ve been lurking on the mutiny since it began but I feel some sort of obligation to post here. I am a grad student studying the early EIC and recently helped teach a course at an american university on the very question of drugs and empire. I have to agree with AMON that despite some of the more heated posts here it’s been a pretty good exploration of some of the basics of the issue – and the discussion seems to mirror the fact that scores of polemics on the pros and cons of the British in India have been published over the years. While I do think that Wikipedia is one of the best things to happen to the internet it is of course not always the definitive source and does make some omissions. Just as a pedantic historical mention – the case of Malwa opium is fascinating as it was never entirely controlled by the British and is an example of a flourishing non-British opium trade through the Portuguese enclaves of Goa and Macao.

    The use of opium within India is also a bit odd as it never really took off as it did in China. The British convened a panel at one point to investigate use within India and found widespread abuse uncommon (see John F. Richards, “The Royal Commission on Opium of 1895” in Modern Asian Studies, (2002) v. 36 pp. 375-420 for a more substantial examination). On the issue of the EIC vs. the crown I would have to cower in the corner and plead that it’s really difficult to disambiguate the two in the nineteenth century especially into the 1830′s and beyond. I think it does raise some issues though about what we mean when we say crown or the British state. Almost throughout the time of British involvment in India there was skepticism in London that folks in India weren’t running their own show. It’s good to see these kinds of historical discussions at the Mutiny although I think the best historical questions are rarely those that ask “who was worse – X or Y?” as this can lead to some really large present day abuses of history.

  10. a more original name

    Is there any reason for personal attacks or that is what you have learned from your elder ?

    Regards

  11. Gaurav,

    I personally attack those who merit personal attacks. And as a writer, your grammar deeply offends me.

  12. a more original name

    “I personally attack those who merit personal attacks”

    Are we talking about your family?

    Regards

  13. Kush Tandon,

    In one of your comments, you said that China was a colony. I found that interesting because in high school, we were always taught that China was divided into spheres of influence, but wasn’t an official colony. (except for Hong Kong and Manchuria) Could you give me more info on this? It’s piqued my interest.

  14. AMON,

    Sure, in China, it was more having zones of influence – the opium wars and Boxer rebellion. However, when I wrote the comment, I also meant the Japanese involvement in China in a more direct way 1930s onwards. Some historial excertps:

    In July 1937, the second Sino-Japanese War broke out. A small incident was soon made into a full scale war by the Kwantung army which acted rather independently from a more moderate government. The Japanese forces succeeded in occupying almost the whole coast of China and committed severe war atrocities on the Chinese population, especially during the fall of the capital Nanking. However, the Chinese government never surrendered completely, and the war continued on a lower scale until 1945.

    Please remember, this started slightly before the onset of WW II

  15. I also meant 1931 invasion of Manchuria, Marco Polo Incident, Nanjing massacre in China

    I think we need to keep in mind after Meiji Restoration in late 1800s, Japanese made a very concerted effort to modernize and become an economic and military force within the global framework. Maybe, it also answers some of the Gaurav questions.

    Wikipedia is a good starting point.

  16. Kush,

    Meiji restoration was remarkable ofcourse, but the end result of this was a Japanese Polity which was a mirror image of Western Imperialism or may be worse because traditionally Japanese elites believed in Japanese superiority , this attitude in a major part contributed to WWII and Japanese atrocities in China, Korea and Indo- China.

    I would like to see not only a strong India, but also a just India.

    As far as I remember China was not colonized in the sense India was but divided into zones of influence. From my history lessons in hindi it was termed “Division of Chinese Watermelon”, I couldn’t find it by googling though

    Regards

  17. And my statement about Hindus being soft wasn’t meant to be serious.

    I was just brooding. Unfortunately no eggs were hatched.

    Regards

  18. Kush Tandon:

    Please remember, this started slightly before the onset of WW II

    A period of 8 years can hardly be classified as ‘colonisation’ in the Indian, African & American sense. A more accurate label would be ‘occupation’.

  19. I was trying to make a broader point about opium and the empire.

    Interestingly, I believe the use of opium was already quite widespread in some quarters of India by the time the British came along, especially during Mughal times. (And didn’t the Emperor Humayun accidentally kill himself because he was high on opium once and, upon hearing the ‘azaan’, apparently tried to do ‘namaaz’ while walking down some stairs ?).

    Also, Afghanistan is currently one of the world’s biggest suppliers of opium.

    Another piece of historical info : Some Rajput soldiers would drink a draft of opium if they were about to go into an “unwinnable” battle, as the drug would increase their ferocity. I presume that it would also act as a painkiller to some extent — you’d really “go out on a high”.

  20. MF wrote:

    The use of opium within India is also a bit odd as it never really took off as it did in China.

    I’ve been intrigued by this for a long time since it is key to understanding how this whole opium trade was sustainable for over a century. Ennis’ comment shows the global scale of this trade:

    Imperial trade in opium was central to the success of the British empire

    If millions of Chinese were so deeply addicted to opium over several generations, how could they do any productive work? given that a drug addict is unable to do any useful work, how were the chinese able to pay for the opium?

    Something doesn’t quite add up or perhaps I’m missing something.

  21. Interestingly, I believe the use of opium was already quite widespread in some quarters of India by the time the British came along, especially during Mughal times.

    Right you are Jai – then again, it’s only expected that you would be up on your Mughal history :)

  22. The real estate acquired by the East India Company in India was acquired by the British government after what used to called the Sepoy Mutiny. There was a transfer of political ownership to a different entity, one that was more humane.

    As the update should make clear, the opium trade actually increased when the crown formally took over from the EIC. So Shyam’s explanation, while a reasonable guess, is factually incorrect. This argument stands even if one were to incorrectly assume that the EIC and the Crown had been totally separate before the Great Mutiny.

  23. how were the chinese able to pay for the opium?

    Silver. China had lots of it.

    The British needed silver to pay Indian traders who wouldn’t accept anything besides precious metals.

  24. Ennis,

    I think this last assessment is perhaps too harsh:

    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.

    To be fair, it was not just the EIC & the Raj, almost half the globe was engaged in the opium trade. What eventually killed the golden goose was that China legalized its cultivation & use – effectively becoming their own drugs suppliers.

  25. During Mughal and British rule it was illegitimate class who associated them by giving them their females.

    http://persian.packhum.org/persian/ Some of the Hindoos assert, that the tribes of Brahmin and Kshetry existed from time imme­morial, but that the Rajpoots are a modern tribe, only known since the beginning of the Kulyoog. The same is related of many other different tribes. The Rajpoots attained power since the death of Raja Vikramajeet, from whom is derived the present Hindoo era, being something more than 1600 years. The origin of the Rajpoots is thus related. The rajas, not satisfied with their married wives, had frequently children by their female slaves, who, although not legitimate successors to the throne, were styled Rajpoots, or the children of the rajas, and the children of Raja Sooruj, whose history we shall now relate, were the first to whom the name of rajpoot was given. The population of India, like that of other parts of the globe, arose from the descendants of Noah. After the flood, Noah’s three sons, Shem, Ham, and Japhet, began to cultivate the fields for their own subsistence and that of their children.