Opium is one of the oldest drugs known to man. Archaeological evidence suggests that the pharmacological properties of opium were recognized as early as 8,000 B.C. Egyptian physicians used opium as an anesthetic for surgery and, in milder doses, as an anti-depressant. By the 1st century A.D. the use of opium for medicinal purposes had spread throughout the Middle East. From there, following in the wake of the Islamic conquests, it penetrated India, Pakistan and, in the 7th century, China.

The use of opium as a recreational drug occurred much later and, oddly enough, was in part due to an economic theory: mercantilism. Between the early 16th and late 18th centuries, European nations judged the performance of their economies by mercantilist standards. Actually there was only one standard and it was simple: the greater a nation’s supply of precious metals (principally gold and silver), the greater its wealth. The implications for foreign trade were obvious. Nations with a trade surplus expanded their money supply and, hence, their wealth. The key to a trade surplus was to manufacture or acquire commodities in high demand in the international market. With the opening of trade routes to the Orient, tea, silk and spices quickly acquired the status of high-demand items. The trick was to acquire them by trading goods instead of paying in specie.

China was the target market, but the Chinese proved to be singularly unimpressed with European goods and insisted on being paid in silver. The Portuguese shipped tobacco from their Brazilian colonies in the hope that it would find a market in China and become an acceptable substitute for silver. Much to the delight of Portuguese merchants, tobacco and tobacco smoking were an immediate success.

In the early 1600s, Dutch merchants observed Indonesians smoking a mixture of tobacco and opium, noted the euphoric effect, and quickly realized the commercial possibilities. Soon they were shipping their own tobacco/opium blend to Taiwan. It didn’t take long for the new tobacco/opium mixture to become popular on the mainland and for enterprising minds to discover how to cure raw opium so that it could be smoked directly. Demand for smoking opium steadily increased.

England found itself in the enviable position of having colonized the leading opium producer in the world, India. The English quickly established an opium monopoly, increased opium production and expanded their trade with China, which with a brisk opium trade factored in reversed the flow of silver from England to China.

By 1838, annual exports of Indian opium to China had reached 3,200 tons. The following year, the Manchu emperor, Hsuan Tsung, dispatched a high-ranking official, Lin Tse-hsu, to Canton with orders to clear the dock warehouses of Indian opium. Over 1,600 tons of opium was dumped into the harbor—the Chinese equivalent of a Boston Tea Party. British gunships shelled Chinese coastal ports and settlements intermittently for three years until the Chinese agreed to pay $21 million in damages and to permit a free market in narcotics.

Chinese opium addiction continued to rise, as did the constant drain on silver that naturally increased the value of the metal and the general level of inflation for an already unstable Chinese economy. To gain control of both problems the Chinese set out on a bold course. First they legalized the domestic production of opium, with predictable results: by 1885 the Chinese were producing twice the amount of opium they imported. And, since Chinese opium sold at half the price of the Indian variety, the flow of silver out of China slowed to a trickle. By 1908, the British finally woke up to the fact that, not only had the opium trade with China become unprofitable, China was on the verge of rivaling India as an opium exporter. The British suddenly warmed to the idea of trade restrictions.

Having at last gained some bargaining power with the British, the Chinese initiated the second half of their strategy to cleanse China of opium: restrictions on Chinese opium production were to be matched by reductions in British opium imports. A complete ban on domestic production, followed by a bar on all opium imports, was to go into effect in 1918. Actually, criticism of British opium policy grew so strong in the House of Commons that the British government ceased exporting opium to China by 1917, though a consignment of approximately 120 tons remained in storage in Chinese warehouses until it was burned by the Chinese over an eight day period, and with considerable ceremony, in January of 1919. Britain’s leadership in international narcotics, uncontested since the 1870s, lasted but a few more years. Unfortunately, the international market for opiates, which the British had created, continued to flourish.