Opium and the beginnings of Chinese capitalism in Southeast Asia.

This article deals with the relationship between opium revenue farming and the development of capitalist enterprises in Southeast Asia. It examines the role which opium played in the transformation of all Asian economies during the late eighteenth and nineteenth centuries. While few would deny that the unprecedented expansion of the opium trade by European traders had a major, usually destructive impact on Asian economic systems and political and social institutions, the long-term results of opium in the Asian, particularly Southeast Asian, economies are less well understood. Most specifically, the opium farming systems which existed in virtually every Southeast Asian state (as well as parts of China and India) were important adjuncts of capitalist development in the region. The practice of farming out portions of the state’s revenue was a common one in pre-modern Southeast Asia. In order to collect a tax from their population without spending scarce resources on bureaucracy and infrastructure, most colonial governments, together with indigenous political entities, preferred to ‘farm out’ revenue collection to private individuals. They would auction off the right to collect a specific tax or to hold the monopoly on the distribution and sale of some excisable item, such as liquor or opium. The monopolist, or farmer, as he was called, provided his own organisation to carry out the task and charged as much as he felt economically realistic to the consumer, paying his overhead and rent to the government and pocketing the remainder as his profit. There were many different types of farms in nineteenth-century Southeast Asia, including farms for liquor, pork, prostitution, gambling, markets, tolls, capitation taxes and others. Of all the various farms which we find in nineteenth-century Southeast Asia, opium was by far the most lucrative. Opium generated a high level of cash flow and thus created large pools of capital. There were, then, numerous links between capitalist development in Southeast Asia and the opium farms and farmers. More importantly, however, the farms also financed commodity production and helped to generate the 297