What percentage of the British Empire's economy was profits from the opium trade?
Upvote:11
There is no doubt that opium and tea formed a "commercial nexus" that became an essential element of the British imperial economy. Although the British government wasn't directly involved in the opium trade, import duties on tea provided 10% of British tax income. Sales of opium generated about one seventh of the revenues of the British East India Company in India [Robins, 2012, p156], and those revenues were used to pay for the tea that was sent back to Britain.
The table below shows the opium exports from India to China (in chests):
[Ibid, p157]
As you can see, the opium exports over the period that you are interested in, while nowhere near their peak, were nevertheless substantial.
In terms of profits, according to this site the approximately 24,000 chests of opium exported by the company in 1839,
"accounted for 40% of the total value of Indian exports [of the Honourable East India Company]"
The figure for 1825 was approximately half that exported in 1939, so it seems unlikely that it would have amounted to 50% of the Honourable East India Company's profits (never mind the profits of the British Empire as a whole!).
However, the Wikipedia page on the HEIC states that by 1825:
most of the money needed to buy tea in China was raised by the illegal opium trade.
This will help us estimate the contribution of the opium trade to the GDP of the British empire.
If you are interested in exact figures for the trade between India and China at that time, the UK government published a series of papers titled "Papers Relating to the Trade with India and China: Including Information Respecting the Consumption, Prices, &c. in Foreign Countries" in 1829 which should include the detail you're after.
For the British Empire as a whole at this period, the 1833 book Taxation, Revenue, Expenditure, Power, Statistics, and Debt of the Whole British Empire; Their Origin, Progress, and Present State by Antonio Pebrer provides valuable details. Happily, this particular volume has been scanned and made available from Archive.org.
From the above sources, we can attempt an answer to your question. (Please note that this answers the question as originally asked, rather than the later edits)
Estimates for the GDP of the British Empire vary widely. If you are interested in a discussion of the various methodologies that have been tried, there is an excellent discussion in What Was the UK GDP Then? A Data Study. Two examples quoted there are Deane and Cole (1967), who gave the following estimates:
- 1821 £291 million
- 1831 £340 million
and Veverka (1963) who, using a different methodology, obtained the following:
- 1820 £403 million
- 1830 £438 million
(quoted in What Was the UK GDP Then? A Data Study p34)
The East India Company Act 1813 opened up trade with India, but reserved commerce with China to the Honourable East India Company. The quantity of tea exported from the port of Canton by the East India Company in 1825/26 was 27,821,121 lbs. That was valued at £1,729,949 [Papers Relating to the Trade with India and China, p 47].
Since we already know that most of the money needed to buy tea in China in 1825 was raised by the illegal opium trade (see above), this also gives us a rough figure for the East India Company's revenue from the opium trade.
If we assume a roughly linear growth in GDP, then, based on the estimates above, the GDP of the British Empire in 1825 would have been something between £316 million and £420 million.
Assuming the mean value of £360 million, then the value of the opium trade was just under 0.5% of the GDP of the British empire in 1825.
To provide some further context for these figures, the value of exported cotton in 1825 was £30,155,901, which generated a tax revenue of £2,040,718 [Pebrer, 1833, p341].
Trade with British West Indian colonies in 1831 was valued at just over £18.5 million [ibid, p396]. African commerce was valued at just over £1 million [ibid, p419], and trade with "all places eastward of Cape Hope (except CHINA)" was some £10.9 million [ibid, p457].
The estimated total capital of the British empire in 1833 was estimated to be £3,679,500,000 [Pablo, 1833].
At that time, the East India Company was valued at £41,484,354.
If anyone feels inclined, most of the the figures required to generate a table - as requested in the later edit to the question - should be available in the sources listed below.
sources
- Papers Relating to the Trade with India and China: Including Information Respecting the Consumption, Prices, &c. in Foreign Countries, 1829
- Deane, Phyllis, & Cole, William A: British Economic Growth, 1688-1759: Trends and Structure, 2nd ed, Cambridge University Press, 1967
- Officer, Lawrence H: What Was the UK GDP Then? A Data Study, University of Illinois at Chicago, n.d
- Pebrer, Antonio Pablo: Taxation, Revenue, Expenditure, Power, Statistics, and Debt of the Whole British Empire; Their Origin, Progress, and Present State, Baldwin and Cradock, 1833
- Robins, Nick: The Corporation that Changed the World, 2nd Ed, Palgrave Macmillan, 2012
- Veverka, Jindrich: “The Growth of Government Expenditure in the United Kingdom since 1790.”, in Scottish Journal of Political Economy, 10 (February, 1963), pp 111-127.
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