Tea and Opium

For All the Tea in China: How England Stole the World’s Favorite Drink and Changed History by Sarah Rose

 

To summarize it in a few words, this books is the story of how Robert Fortune stole the secrets of tea for the British East India Company to bring them from China to India in the middle of the 19th century.

Yes, this is right: tea was right in the middle of a James Bond novel, perhaps not the modern James Bond but at least a Victorian one.

But this is not what is really interesting in this book (or at least not for this blog). What I found truly fascinating are the reasons behind him stealing the secrets of tea.

Let’s sum up thFlag of the British East India Companyings: the introduction of tea in India and in the Darjeeling Estates is the result of an immune system, the immune system of one of the first megacorporation known to the world: the East India Company or British East India Company.

But in order to understand this, two little steps back in time are needed:

First, how was the trade balance between European powers and China? To be honest, it was not good: demand for Chinese products (tea, silk and porcelain among others) was high while China had no need for European products and wanted silver. For the mercantilist economists that ruled in Europe during that era, this resulted in a impoverishment (as the prosperity of a State depended on the amount of precious metal it owned) and this was not a viable solution on the long run. For the United Kingdom, it was even worst as it no longer used silver standard but gold one and it had to buy silver from other European countries, losing a bit of money each time.

This is why the East India Company, which held a monopoly over trade with the Far East (via a royal charter) decided to sell a high value commodity: opium (produced in the Bengal area, that more or less belonged to the British East India Company since Clive’s victory at the battle of Plassey in 1757).

Ship of the British East India Company

The high prices and increasing demand (from an estimate of 15 tons in 1730 to 900 tons in the 1820s) made sure that the trade balance was improving (Great Britain even fought two wars against China to keep this business running).

 

Then why did the East India Company needed to steal the secrets of tea? There are several answers to this question: first of all, they were slowly losing their trade monopoly (first with India and then with China) and were unable to cope with the new competitors (including other countries); they also needed more money to deal with wars and expansion on the Indian borders (which the Company paid for); last but not least, they were afraid that China might legalise the cultivation of opium and/or steal it from India (the Bengali opium was of higher quality than the Chinese one).

In order to solve all these problems, the British East India Company decided to produce their own tea in Darjeeling, a place that seemed well suited for these products. The first intents used tea found in Assam and tea smuggled of Canton but it was not a success and quality was low.

Now, you get the overall picture. The British East India Company had to deal with a big problem as they needed more money but had to give a lot of it to their suppliers.

This is the reason behind their first move: replacing money by another product, one that they could produce rather easily and that was highly addictive (making it even more profitable): opium.

The next evolution came from the increased competition (with the end of the trade monopoly) and the fears that China might become a competitor for the Indian opium. The only solution the British East India Company found was to keep on producing opium for the Chinese while at the same time, they tried to launch their own production of tea to take away that market from China.

The end result was an increase of the profits as once the quality had increased and the industrial processes were known, the Indian production could be sold on the London market while being promoted as safer as the Chinese one (as the Chinese used some dangerous chemical products to make their green leaves greener as Westerners always wanted the greenest ones).

 

In modern times, we would use words such as trade war, industrial espionage, marketing,…

Without judging its ethics or its success, it seems that the British East India Company was rather modern when it comes to business survival and evolution and that it was indeed the first megacorporation (in a true cyberpunk way) in history.

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Xavier

My name is Xavier.

I live on the other side of the pond but you had probably found this out thanks to my “strange” English.

I am a tea addict and I studied several (and I do mean several) years ago marketing, hence this blog, which will try to combine both worlds.
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