The Economics of Opium Trade, Consumption, and War

During the first centuries of the opium trade, the drug became popular not only in Asia but in the Western world as well. In Britain, especially, opium became an extremely important product, both within the country and for its economic attributes abroad. For much of this time, the British attitude toward opium was much like our modern view of coffee. The English, along with much of the rest of the Western world, viewed opium as a luxury and a pleasantry, albeit a mildly addictive one. Like coffee today, opium was realized to be mildly addictive, but it was not seen as a dangerous narcotic. 

Opium was, in fact, widely used in British society. It was sold in pharmacies and prescribed by doctors as a remedy for all sorts of ills. Opium was combined with liquor and sold in bars. A bottle of this popular mixture of opium and liquor, called laudanum, was commonplace in English households (see Sydenham s Laudanum box). While the English opinion of opium eventually changed, its initial acceptance as a rather harmless luxury item might have given merchants a clear conscious when pushing its sale on China. 

Invented in 1527, laudanum, a designation for a number of products containing opium, iiquor, and a variety of other ingredients, was the most popuiar form of opium consumption in the West. Of all the laudanum products available, the most popular was a brand called Sydenham s Laudanum, which contained one pound of sherry wine, two ounces of opium, one ounce of saffron, one ounce of powder of cinnamon, and one ounce of powder of cloves. Its popularity stemmed from the sweetness of the sherry undercutting the natural bitterness of opium. For more than 400 years, this method of opium drinking remained widespread among Western nations. 

With a seemingly unlimited addict population in China, the sale of opium became a major source of income for the British, constituting much of their tax revenue from India and completely paying for Chinese tea sent to Britain. For many years, the BEIC set the amount of opium sold to China at 4,000 chests (280 tons). During this time, the British did not desire or make a profit but simply sold enough opium to take care of their need for China s tea. However, the demand for opium in China far outstretched the artificially set British supply, causing competition from Turkey, west India, and America. 

The Emperor, now more determined than ever, sent a Commissioner Lin to Canton (the principal opium port) with the authority to stop the trade. Lin made the Emperor s wishes known, first by executing a Chinese opium smuggler. Lin then proceeded in blocking the port and forcing the traders to hand over their opium supplies, which were summarily destroyed. In blocking the port, Lin had also trapped around 300 British traders inside the city, and he threatened them with execution if they did not turn over their opium. Ultimately, tensions between the two nations rose to a fever pitch, and war was declared in November of 1839. 

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