The Opium Business: A Conversation with Peter Thilly

Peter Thilly’s new book, The Opium Business: A History of Crime and Capitalism in Maritime China (Stanford University Press, 2022), focuses on the nitty-gritty of the opium trade in Fujian Province from the 1830s to 1938. Its main goal is to shift our attention from the still-prevalent overarching narratives of national humiliation and anti-imperialist moralism generally linked to the Opium War (1839–42). Thilly, instead, places the opium trade in China within its immediate business context, as local actors operating on Fujian’s maritime commercial networks—from petty smugglers to established powerful commercial lineages, representatives of imperialist powers, and government officials—pursued profits in response to market trends and business opportunities. Opium, in fact, was treated as any other commodity and often traded along with such common goods as tea, fried noodles (bami), and sugar. What made opium special was not just its unparalleled profitability but also its illegal status, which forced traffickers to work around, compromise, and—starting with the de facto legalisation of opium in 1858—collaborate with the ‘regulatory and moral’ (Thilly 2022a: 3) system created first by the imperial government and later by the unequal treaties, as poignantly illustrated especially in Chapters 3 and 4 of the book. This local bottom-up approach to the opium trade opens interesting new views that are explored in this conversation with the author.

 

Margherita Zanasi: Before we take up some of the main themes of your book, I would like to talk about sources. In the Introduction, you mention you had difficulties finding the documentation needed to support your arguments. Could you talk about what made sources hard to find and how you overcame this problem? What research strategy did you develop?

Peter Thilly: Finding sources for this book was challenging. Opium, after all, was a business that people wanted to keep secret. The danger, as I saw it, was writing another history of the state and the institutions of opium prohibition. From the beginning, I was determined to do my best to write about the people who bought and sold the drug, but other than the Jardine-Matheson Company, most opium traders did not leave behind business correspondence. The challenge was therefore to find state materials that are either voluminous enough or detailed enough to offer a window into the unknown world of the opium trader.

What I found were three major flashpoints—the 1830s, 1870s to 1880s, and the 1920s to 1930s—that each generated small explosions of detailed sources surrounding state crackdowns on opium traders. In each case, I scrambled to supplement and triangulate with other sources—so, for example, the first chapter (on the 1830s) revolves around a major opium case from the Qing archive that was witnessed and recorded by British opium traders working for Jardine-Matheson. Chapter 5, which I wrote about in the Asia-Pacific Journal this month (Thilly 2022b), uses sources from the League of Nations Archive, the British National Archives, the Fujian Provincial Archives, and Chinese newspapers from Singapore and Xiamen to try to piece together what remains a frustratingly incomplete story about a massive illegal export trade that was entirely uncovered in the historical scholarship. So, the other major factor that made sourcing this book complicated is that the study takes place over a long century of rapid technological and political transformation, and the archives as a consequence change quite dramatically across the chapters.

MZ: How does your book expand and complicate our understanding of the Chinese opium trade?

PT: This is a question I have been asking myself for almost 15 years. One goal I had from the very beginning was to organise the book around a legible and useable chronology of opium’s history in China, which I felt would be a baseline service to the field. The first four chapters of the book do this, explaining how the business changed over time through its initial rise as a contraband item, through 20 years of what I call ‘negotiated illegality’ after 1843 and the opening of the treaty ports, through another 50 or so years of de facto legality, between 1860 and 1906, and after that into a new period of uneven and often unsuccessful prohibition, characterised by increased state efforts to control the business from the top down.

When I set out on this project, I also felt I could help demystify opium, make it less ‘special’, to see some of what was surely a more complex reality behind the metanarratives we are all familiar with. I wanted to see what would happen if we studied opium as a commodity—a regular item of exchange and consumption in the late imperial and then modern world economy. But as the sources told me over and again, opium was ‘special’ in its moral and legal status. Understanding the contours and implications of this special status became an opportunity to say something new, by explaining the uniquely thorny relationship—antagonistic, and yet co-dependent—that developed between the opium business and the people and institutions of state power.

The book is one that re-explains China’s transition from huge multi-ethnic empire to a fragmented republic, but this time as a story of how drug dealers grew and maintained their power. It is the sum total of an effort to try to understand the agency of opium traders—businesspeople, ‘gangsters’, and capitalists—in the construction of the modern Chinese political economy. Opium traders shaped the Qing state’s approach to legalising and taxing the drug. When the drug was fully brought out into the open in the late 1850s, the people at the heights of the opium business worked with officials to determine tax rates and quotas. The most successful won bids to collect those taxes and to regulate the transport and distribution of the drug. Opium traders made themselves indispensable as sources of state revenue and, through this process, created vast fortunes and helped shape the world as we know it.

MZ: Your book helps the reader understand the many layers of Western imperialism in China, clearly differentiating between the big powers’ moralist discourse and their official dealings with the Imperial and Republican governments on the one side, and the inventive and unorthodox strategies deployed at the local level as Western representatives faced practical problems on the other. This theme emerges clearly in your discussion of the many ambiguities in enforcing the unequal treaties.

PT: In trying to think as an opium trader might, I developed a vision of Western imperialism in China as a context for doing business: shifting over time, but at each moment a playing field that could be manipulated by people with the right resources and savvy. The book is intended to contribute to our collective understanding of opium in China, which is to say that I do not diverge from the accepted (and true) narrative that the British Empire profited immensely from opium, that it forced the Qing state at gunpoint to legalise the drug, and hamstrung their efforts to tax and, later, prohibit the drug. This has all been said before. As a social historian of crime and business, I have avoided belabouring longstanding questions of national culpability and humiliation, and instead tried to understand how it all worked. Your comment hits the nail on the head as far as what captured my interest in the sources: multilateral relations in the treaty ports between British officials, Qing officials, Chinese merchants, and foreign merchants were complicated and unpredictable. I am really looking forward to reading Stacie Kent’s forthcoming book on this. In my treatment, local Qing and foreign authorities in the treaty ports were involved in constant negotiation and compromise, and the ways that people found to enhance their individual power and profit can offer us a roadmap into these local negotiations of sovereignty and revenue.

MZ: Administrative corruption is another important theme in your discussion of China’s opium business. You describe corruption as taking various forms, from the simple greediness of local officials to institutionalised practices aimed at solving economic problems, as exemplified by shady practices linked to tax farming. How do these stories contribute to our understanding of the role played by corruption in Imperial and Republican China?

PT: This is a great question because there is such a rich historiographical background here on corruption in China from the distant past all the way to the present day. I am not the first to point out that the line between taxation and bribery can be really, really difficult to draw. One of the issues I encountered was not having the sources to fully understand what happened with the money collected by state actors. And that matters if we are determined to draw hard lines in the sand about legitimate governance and corruption. What percentage of opium taxes at any given moment was used as ‘legitimate’ state revenue, and what was held back as personal profit?

In the story that opens the book, there is a rural coalition of opium smugglers whose leaders charged a fee, which they called a lijin [釐金], which is a term usually understood as a long-distance transport tax. Their lijin was a fee on all opium sold by subsidiary investors in the organisation. Was this a protection fee—racketeering—or was it a systematised bribe going to a member of the local state? What if, as in the port cities and on the coast, this was an opium fee that was channelled in part to the pockets of Qing officials, and in part diverted to public goods, like orphanages, or resettlement and compensation for the victims of lineage feuds? From beginning to end, opium and its capital circulated in ways that defy our attempts to draw firm distinctions between public and private, and this itself should be a lesson about how impactful the margins and grey areas of legality can become.

MZ: Capitalism is often used as a vague umbrella category or simplistically identified with a general response to market trends. Could you explain the capitalist features of the Chinese opium business? What does it add to our understanding of capitalism? Why ‘business’ instead of ‘trade’?

PT: This is a question that keeps me awake at night. As you note, ‘capitalism’ as a concept has the potential to distract rather than clarify. This is due to both definitional imprecision and legitimate differences in the world views of people who believe in ahistorical models and people who do not. I am of the latter persuasion, and I tend to talk about capitalism in terms of a periodisation of how businesses have interacted with the state historically. I view the concept of a ‘free market’ as fundamentally mythological; think about how central lobbying has been to the success of big business in the United States. These are people who clearly have not seen themselves as actors in a free market. So, for me—someone interested in the history of money and power—I think of the nineteenth and early twentieth centuries as a historical moment when the technological foundation emerged for private individuals to accumulate and mobilise vast fortunes, which they used in part to try to influence the state in ways they deemed financially advantageous.

The book is called The Opium Business because, ultimately, the word ‘business’ captures the subject of inquiry better than any other. A book about the ‘opium trade’ would by nature be more global in scope, covering production in India and transport to China. My favourite books that fit that description are the novels of Amitav Ghosh. Here, I wanted to learn how the people in one small but particularly active region built and maintained their businesses over time—how they navigated illegality in the 1830s, the legalisation of the drug after 1860, and the reintroduction of prohibition after 1906. This is a book that explains how a major industry expanded and survived the transitions of the modern era. When I think about what was ‘capitalist’ about the opium business what comes to mind most immediately are the ‘opium kings’ of the early twentieth century: people who achieved incredible levels of vertical integration, overseeing and profiting from cultivation, manufacture, and distribution on both local and global levels. These are people who reinvested their profits, diversified their portfolios, maintained violently extractive relationships with labour, and made every effort to shape their relations with the state in an advantageous way.

So, if ‘success’ in capitalism is determined by a person’s ability to continuously maximise their acquisition of profit, the story of opium illustrates how ‘success’ was in no way contingent on fair play. Manipulation, evasion, or outright flaunting of rules coincided with and advanced together with the creation of laws, regulations, and moral systems at least nominally intended to protect people and institutions against the depredations of profit-seekers. I suspect this is a core feature of modern capitalism, and not an aberration.

MZ: Do you think that different forms of capitalism inspired different approaches to the opium trade? For example, how did attitudes to opium differ between Fujian’s mostly commercial economy (can we call it capitalism?) and the budding industrial capitalism of treaty ports such as Shanghai? Could we say, for example, that in Fujian, opium was the business, while in Shanghai, the business was industrial production and opium was a convenient source of capital? And is your story antithetical to the image of the treaty ports’ industrialists as determined to ‘save China through business’?

PT: Fascinating question. Opium was not ‘the business’ in Fujian, at least most of the time. The tea trade, especially in the northern half of the province, was more important, and in southern Fujian the maritime traders who dealt in opium were highly diversified. But there were of course geographic reasons the trade surged in Fujian at particular moments, in the 1830s and 1920s especially, stemming from the province’s close connections with Southeast Asia. You are right about Shanghai—though the question of how important opium capital was in Shanghai’s development is one worth exploring, especially for people interested in the Shanghai capitalists. Hankou is another place that was for a few decades dominated by the opium business, when Chiang Kai-shek began his attempts to create a national centralised monopoly supplied from that city. That to me would be the most interesting comparison with southern Fujian, because of how both places assumed crucial roles in the opium supply chain following changes in state regulations. That Hankou’s supply was domestic and Xiamen’s (mostly) foreign might generate some new insights. Tianjin is another place of interest here, and Miriam Kingsberg (2013) has written a lot about attitudes towards opium during that port’s period of Japanese rule.

The question of attitudes is one that I generally avoided in the book, for better or worse. The main reason is something akin to what we might call ‘political correctness’; people in the Chinese press never said anything interesting about opium, because they all said the same thing. Newspapers proved to be a terrible place to learn about the opium business, because they simply did not acknowledge it in the same way as other businesses. The press in Xiamen and Hankou, I would hypothesise, were equally strident about the scourge of opium and silent about the local notables who profited from it. Interestingly, the Chinese-language press in Singapore was much less delicate in their treatment, and a lot of what I wrote about the opium business in Xiamen in the 1920s and 1930s I learned from Singapore newspapers.

Regarding the final question: I do not think opium’s history changes much about how I understand the project of treaty port industrialists to save China through business. What if opium regulation had been just a little less corrupt and a little more centralised? I have evidence of tens of millions of dollars pocketed from what could have been state revenue—and what I have seen is just the tip of the iceberg. I do not have the answer for how states should regulate opium, but I am open to the idea that this enormous source of revenue could have been mobilised in a more productive way—one that dovetailed with the industrial projects designed to improve people’s lives.

MZ: In placing the Chinese/Fujianese opium business in a global context, you stress the transnational maritime networks along which it developed. You also compare it with today’s narco-capitalism. Could you elaborate on this comparison? In China, narco-capitalism appears to have been state-centred, departing from the private business model of today. In China, in fact, the opium trade became an important, although hidden, feature of the state’s modernisation drive, while today’s narco-capitalism seems to form an obstacle to economic development. China also seems to have differed from today’s narco-capitalism in terms of criminal status and its relationship with the state. In other words, did the involvement of the state change the criminal status of the opium business and, consequently, its relationship with the authorities?

PT: This is a great conversation to have and I will do my best not to annoy people who know much more than me about these other parts of the world and narco-capitalism today. But the heart of my answer is that state involvement varies across times and locations. Tajikistan in the 1990s, for example, has been described as a ‘narco-state’ because of the role of state officials in turning the country into a transit zone for heroin from Afghanistan (Paoli et al. 2007). The government in North Korea is another interesting place to look here.

Returning to China in the early twentieth century, the story of opium should not be understood in a top-down way, as the result of deliberate choices by people in positions of state power. If we look at negotiations between Xiamen’s naval authorities and the chamber of commerce about the introduction of ‘opium prohibition bureaus’, for example, we see the buyers and sellers of opium holding the upper hand and forcing the state to accept their terms. So, I agree that narco-capitalism in China was state-centred, but all illegal drug trading is state-centred in the sense that it is only profitable because of state regulations. The extent to which state actors get involved in the business varies and, in some cases, states actively create policy to harness and develop an illegal drug industry. Appreciating the fluidity and following the trajectory of the state–business relationship is the most interesting reason to think across time and space and compare such places as Mexico in the 1980s and Fujian in the 1920s.

MZ: Returning to the issue of imperialism, could you elaborate on how your discussion of Japan’s takeover of the opium business in East Asia contributes to our understanding of the changing nature of imperialism in the early twentieth century?

PT: This is another huge and fascinating conversation to me. I am eagerly awaiting James Gerien-Chen’s forthcoming book on Japanese imperialism in Taiwan and south China, and that will really help expand our understanding of what happened in this region over the first half of the twentieth century. Did Japan ‘take over’ the opium business, though? I describe in Chapter 6 of the book how Japanese-protected businessmen took over the city’s opium trade, but these were local people—some of them had never even been to Taiwan—and their profits were personal. My understanding is that the Japanese Government extended protection to people in the opium business because they were interested in converting any people of means in south China to Japanese citizenship, with long-term goals for dominating trade (in all goods) between Southeast Asia and China. So, opium here was just one part of the pie, and its destabilising effects on local society were, I suppose, an ancillary benefit to those in Japan who wanted to increase Japanese influence by any means.

I really like the idea that you suggest here, however, that this was an important transitional moment in the history of global imperialism; this all coincides with Japan’s slow disillusionment with the international order and the ‘Great Powers’ after World War I. British and American consuls in previous decades had been very concerned about the bad reputation that might reflect on them due to the lawbreaking behaviour of protected Chinese citizens from Singapore or the Philippines. The Japanese consuls in Xiamen after World War I did not seem to fret about how they were perceived by other consuls within the treaty port community.

MZ: Finally, what are the most important things you would like the reader to take away from you book?

PT: We have covered all the important threads of the book, so I will just say this: I got into this line of work because I like reading good stories, and I chose this project for the same reason. This book is full of real, sometimes quite weird, individuals and I hope that their stories can remind readers of the humanity at the heart of opium’s history, which includes a great deal of violence and destruction.

 

References

Kingsberg, Miriam. 2013. Moral Nation: Modern Japan and Narcotics in Global History. Berkeley, CA: University of California Press.
Paoli, Letizia, Irina Rabkov, Victoria A. Greenfield, and Peter Reuter. 2007. ‘Tajikistan: The Rise of a Narco-State.’ Journal of Drug Issues 37(4): 951–79.
Thilly, Peter. 2022a. The Opium Business: A History of Crime and Capitalism in Maritime China. Redwood, CA: Stanford University Press.
Thilly, Peter. 2022b. ‘Opium’s Reverse Course: A Story of Shifting Winds.’ The Asia-Pacific Journal: Japan Focus 20(18). apjjf.org/2022/18/Thilly.html.

Margherita Zanasi

Margherita Zanasi is Professor of Chinese History at Louisiana State University. She is the author of Economic Thought in Modern China: Market and Consumption 1500s to 1937 (Cambridge University Press, 2020) and Saving the Nation: Economic Modernity in Republican China (The University of Chicago Press, 2006).


Peter Thilly

Peter Thilly is an Assistant Professor of Modern East Asian History at the University of Mississippi and the author of The Opium Business: A History of Crime and Capitalism in Maritime China (Stanford University Press, 2022).

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