Kevin > Books: history-europe-imperialism‎ (92)

Now, since Roman times, Europe had been exporting gold and silver to the East [esp. China/India]: the problem was that Europe had never produced much of anything that Asians wanted to buy, so it was forced to pay in specie [coin money] for silks, spices, steel, and other imports. The early years of European [colonial] expansion were largely attempts to gain access either to Eastern luxuries or to new sources of gold and silver with which to pay for them. […]

The conquest of Mexico and Peru led to the discovery of enormous new sources of precious metal, and these were exploited ruthlessly and systematically, even to the point of largely exterminating the surrounding populations to extract as much precious metal as quickly as possible. […]

By 1540, a silver glut caused a collapse in prices across Europe; the American mines would, at this point, simply have stopped functioning, and the entire project of American colonization foundered, had it not been for the demand from China. […] This Asian trade became the single most significant factor in the emerging global economy, and those who ultimately controlled the financial levers—particularly Italian, Dutch, and German merchant bankers—became fantastically rich.

‘Since the middle years of the last century, the demand for Chinese tea has grown at such a pace in Britain and America that it is now the principal source of profit for the East India Company. The taxes on it account for fully one-tenth of Britain’s revenues. If one adds to this such goods as silk, porcelain and lacquerware it becomes clear that the European demand for Chinese products is insatiable. In China, on the other hand, there is little interest in European exports - the Chinese are a people who believe that their own products, like their food and their own customs, are superior to all others. In years past this presented a great problem for the British, for the flow of trade was so unequal that there was an immense outpouring of silver from Britain. This indeed was why they started to export Indian opium to China.’

Glancing over his shoulder, the General raised an eyebrow: ‘Started? Commence? You mean this trade has not always existed?’

‘No, Majesty - the trade was a mere trickle until about sixty years ago, when the East India Company adopted it as a means of rectifying the outflow of bullion [i.e. silver]. They succeeded so well that now the supply can barely keep pace with the demand. The flow of silver is now completely reversed, and it pours away from China to Britain, America and Europe.’

We are used to thinking of such bureaucratic interventions [China’s long history of government policies in response to social protests: official commissions of inquiry, regional debt relief, cheap grain loans, famine relief, laws against the selling of children] —particularly the monopolies and regulations—as state restriction on “the market”—owing to the prevailing prejudice that sees markets as quasi-natural phenomena that emerge by themselves, and governments as having no role other than to squelch or siphon from them. I have repeatedly pointed out how mistaken this is, but China provides a particularly striking example. The Confucian state may have been the world’s greatest and most enduring bureaucracy, but it actively promoted markets, and as a result, commercial life in China soon became far more sophisticated, and markets more developed, than anywhere else in the world.

This despite the fact that Confucian orthodoxy was overtly hostile to merchants and even the profit motive itself. Commercial profit was seen as legitimate only as compensation for the labor that merchants expended in transporting goods from one place to another, but never as fruits of speculation. What this meant in practice was that they were pro-market but anti-capitalist.

Again, this seems bizarre, since we’re used to assuming that capitalism and markets are the same thing, but, as the great French historian Fernand Braudel pointed out, in many ways they could equally well be conceived as opposites. While markets are ways of exchanging goods through the medium of money—historically, ways for those with a surplus of grain to acquire candles and vice versa (in economic shorthand, C-M-C’, for commodity-money-other commodity)—capitalism for Braudel is first and foremost the art of using money to get more money (M-C-M’) [originally from Marx’s Capital: A Critique of Political Economy, Volume 1]. Normally, the easiest way to do this is by establishing some kind of formal or de facto monopoly. For this reason, capitalists, whether merchant princes, financiers, or industrialists, invariably try to ally themselves with political authorities to limit the freedom of the market, so as to make it easier for them to do so. From this perspective, China was for most of its history the ultimate anti-capitalist market state. Unlike later European princes, Chinese rulers systematically refused to team up with would-be Chinese capitalists (who always existed). Instead, like their officials, they saw them as destructive parasites—though, unlike the usurers, ones whose fundamentally selfish and antisocial motivations could still be put to use in certain ways. In Confucian terms, merchants were like soldiers. Those drawn to a career in the military were assumed to be driven largely by a love of violence. As individuals, they were not good people, but they were also necessary to defend the frontiers. Similarly, merchants were driven by greed and basically immoral; yet if kept under careful administrative supervision, they could be made to serve the public good. Whatever one might think of the principles, the results are hard to deny. For most of its history, China maintained the highest standard of living in the world—even England only really overtook it in perhaps the 1820s, well past the time of the Industrial Revolution. [British East India Company established rule in India in 1757, with the Opium Trade reversing trade relations with China by 1800s and a complete collapse of Asia’s state market system by 1839 First Opium War/subsequent Unequal Treaties]

Their district had been seized by the East India Company a long time ago, but in the beginning the annexation had made little difference and things had gone on much as usual. But with the passage of time the Company had begun to interfere in matters that previous rulers had never meddled with – like crops and harvests for example. In recent years the Company’s opium factory in Ghazipur had started to send out hundreds of agents – arkatis and sadar mattus – to press loans on farmers, so that they would plant poppies in the autumn. They said these loans were meant to cover the costs of the crop and they always promised that there would be handsome profits after the harvest. But when the time came the opium factory often changed its prices, depending on how good the crop had been that year. Since growers were not allowed to sell to anyone but the factory, they often ended up making a loss and getting deeper into debt. Ram Singh knew of several men who had been ruined in this way.

Of late the Company had even tried to interfere in the job market, taking steps to discourage men from joining any army but their own. For Ram Singh, as for many others, this was even more objectionable than meddling with their crops. That anyone should assert an exclusive claim to their service was an astonishing idea: few things were as important to them as their right to work for whoever offered the best terms. It was not uncommon for brothers and cousins to take jobs in different armies: if they happened to meet in battle, it was assumed that each man would do his duty and fight loyally for his leader, having ‘eaten his salt’.

[…]

To Zachary’s surprise there were no goods on display: he was at a loss to understand what exactly was being bought and sold – and it didn’t help much when Baboo Nob Kissin explained that this was not a bazar for opium as such; rather it was a place in which people traded in something unseen and unknown: the prices that opium would fetch in the future, near or distant [financial speculation!]. In this bazar there were only two commodities and both were pieces of paper – chitties or letters. One kind was called tazi-chitty or ‘fresh letter’; the other kind was mandi-chitty – ‘bazar letter’. Buyers who thought that the price of opium would go up at the next auction would buy tazi-chitties; those who thought it would go down would buy mandi-chitties. But similar chitties could be written to cover any period of time – a month, a year or five years. Every day, said Baboo Nob Kissin, lakhs, crores, millions of rupees passed through this bazar – there was more wealth here than in any market in Asia. [Recall the Graeber passages on (1) traditional markets being C-M-C commodity exchange vs. capitalism being M-C-M’ using money to make more money, and (2) China being an anti-capitalist (against merchant’s profit motive and especially speculation) market state.]

[…]

‘With the Company there is even more reason for pride, since the British are purifying Hindustan. For thousands of years everything in this land has declined and degenerated; people have become so mixed that you cannot tell them apart. Under the British everyone is kept separate, each with their own kind – the whites are with the whites and we are left to ourselves. They are the true defenders of caste, Ram Singhji, and if you have any thought of your son’s dharma you will send him to us. [Divide-and-rule is the foundation of colonial/imperialist rule]

‘But dharma is not just a matter of rules,’ Ram Singh objected. ‘We are Rajputs and for us our worth, our maryada, lies in how we show our courage. No man can be a true warrior in the gora paltan – valour and skill count for nothing with them. Why, during the Battle of Assaye some of our best fighters went forward and challenged the enemy to send their bahadurs, for single combat. Do you know, not one man stepped out from the Company’s ranks? There was not one man in their entire army who was brave enough to be a real bahadur! Even though most of their sepoys were Hindustanis, like us, they had lost both honour and courage, izzat and himmat, after joining the Company’s army. Even we were ashamed for them.’

A smile appeared on Bhyro Singh’s face. ‘But Ram Singhji,’ he said, in a silky voice: ‘Tell me, who won at Assaye?’

Unable to think of a retort, Ram Singh hung his head.

Bhyro Singh’s smirk widened: ‘The old ways of fighting may have been good for making heroes and bahadurs, Ram Singhji, but they didn’t always win wars. And that’s the thing with the English way of fighting – it does not depend on heroes. The Company’s army is not made up of a great number of bahadurs: the whole army fights like a single brave warrior. That is why people speak of the ‘Company Bahadur’. The entire army is like one man, one body, obeying a single head; every Company sepoy has to learn this by doing drills. Everyone has to obey the one above him, right to the very top. No one can ever refuse to follow orders or he will be shot. It is not like our Hindustani armies, which are made up of men whose main loyalty is to the sardar who pays them – and if that sardar takes a bribe they will all go off with him. Our Angrez officers understand this very well, and before every battle they send the baniyas to offer bribes to the sardars of the other armies. Almost always it happens that three or four of them accept, and then they either ride away or they stand aside during the fighting. Isn’t it true that this is what happened at Assaye?’

‘Yes,’ said Ram Singh. ‘It cannot be denied. But that wasn’t the only reason the Angrez army won. They had better cannon than us. Better bundooks too.’

‘Exactly!’ said Bhyro Singh. ‘Unlike our Hindustani rajas and nawabs, the Angrezes are always studying and making changes. Every year their cannon get better and better. They are always looking to make improvements in their weapons and they don’t allow anything to get in the way of that.’

[An Indian opium trafficker meets the exiled General Napoleon Bonaparte. Napoleon says:] ‘But since it is the English who send embassies there, it must mean that they need the Chinese more than they are themselves needed?’

‘That is correct, Your Majesty. Since the middle years of the last century, the demand for Chinese tea has grown at such a pace in Britain and America that it is now the principal source of profit for the East India Company. The taxes on it account for fully one-tenth of Britain’s revenues. If one adds to this such goods as silk, porcelain and lacquerware it becomes clear that the European demand for Chinese products is insatiable. In China, on the other hand, there is little interest in European exports - the Chinese are a people who believe that their own products, like their food and their own customs, are superior to all others. In years past this presented a great problem for the British, for the flow of trade was so unequal that there was an immense outpouring of silver from Britain. This indeed was why they started to export Indian opium to China.’

Glancing over his shoulder, the General raised an eyebrow: ‘Started? Commence? You mean this trade has not always existed?’

‘No, Majesty - the trade was a mere trickle until about sixty years ago, when the East India Company adopted it as a means of rectifying the outflow of bullion. They succeeded so well that now the supply can barely keep pace with the demand. The flow of silver is now completely reversed, and it pours away from China to Britain, America and Europe.’ […]

‘So tell me, messieurs, do the Chinese perceive no harm in opium?’

‘Oh they certainly do, Your Majesty: its importation was banned in the last century and the prohibition has been reiterated several times. It is in principle a clandestine trade - but it is difficult to put an end to it for many officials, petty and grand, benefit from it. As for dealers and traders, when there are great profits to be made, they are not slow to find ways around the laws.’

Napoleon lowered his gaze to the dusty pathway. ‘Yes,’ he said softly, as though he were speaking to himself: ‘This was a problem we too faced, in Europe, with our Continental System. Merchants and smugglers are ingenious in evading laws.’

‘Exactly so, Your Majesty.’

Now, a twinkle appeared in the General’s eye: ‘But how long do you think the Chinese will suffer this trade to continue?’

‘It remains to be seen, Your Majesty. Things have come to a pass where a cessation in the trade would be a disaster for the East India Company. Indeed it is no exaggeration to say that without it the British would not be able to hold on to their Eastern colonies; they cannot afford to forgo those profits.’

‘Quelle ironie!’ said Napoleon suddenly, flashing his visitors his arresting smile. ‘What an irony it would be if it were opium that stirred China from her sleep. And if it did, would you consider it a good thing?’

‘Why no, Your Majesty,’ responded Zadig immediately. ‘I have always been taught that nothing good can be born of evil.’

Napoleon laughed. ‘But then the whole world would be nothing but evil. Why else par example do you trade in opium?’ […]

This question caught Bahram [Indian ship-owner and opium trafficker] unawares and he was temporarily at a loss for words. Then, gathering his wits, he said: ‘Opium is like the wind or the tides: it is outside my power to affect its course. A man is neither good nor evil because he sails his ship upon the wind. It is his conduct towards those around him - his friends, his family, his servants - by which he must be judged. This is the creed I live by.’

[…]

‘It seems, Sethji, that the Chinese officials have been making a study of how the Europeans deal with opium. They have found that in their own countries, the Europeans are very strict about limiting its circulation. They sell the drug freely only when they travel east, and to those people whose lands and wealth they covet. He cites, as an example, the island of Java; he says that the Europeans gave opium to the Javanese and seduced them into the use of it, so that they could be easily overpowered, and that is exactly what happened. It is because they know of its potency that the Europeans are very careful to keep opium under control in their own countries, not flinching from the sternest measures and harshest punishments. This, he says, is what China must do too. He proposes that all opium smokers be given one year to reform. And if after that they are found still to be using, or dealing, in the drug, then it should be treated as a capital crime. […] ‘a transgressor should be punished by the exclusion of his children and grandchildren from the public examinations, in addition to the penalty of death …’ […]’

[…]

Slade’s heavy jowls quivered thunderously as he turned to face his interlocutor. ‘No, Mr King,’ he said. ‘I have not mentioned opium, nor indeed have I spoken of any of your other hobby horses. And nor will I until your Celestial friends candidly admit that it is they who are the prime movers in this trade. In supplying them with such goods as they demand we are merely obeying the laws of Free Trade …’

‘And the laws of conscience, Mr Slade?’ said Charles King. ‘What of them?’

‘Do you imagine, Mr King, that freedom of conscience could exist in the absence of the freedom of trade?’

[…]

Many pairs of eyes turned towards the President of the Chamber who now rose to address the Hongists.

‘I would be grateful, Mr Fearon, if you would inform our esteemed friends and colleagues of the Co-Hong that the Chamber is powerless in this matter. As it happens Mr Innes [British opium trafficker arrested in Canton] is not even a member of this body: he is here today at my express invitation, but it must be noted that the Chamber has no jurisdiction over him. Mr Innes protests his innocence of the charges levelled against him. As a British subject he enjoys certain freedoms and we cannot make him leave the city against his will.’

Bahram smiled to himself as he listened: the arguments were marvellously simple yet irrefutable. Really, there was no language like English for turning lies into legalisms.