The Indian Economy Blog

“It is the opium of the people.”

Marx was referring to religion and why it was necessary. Opium is a powerful narcotic and painkiller. According to him – and I agree with his analysis – religion to the vast majority of the people is a comforting illusion made a necessity by their real miseries. He wrote:

The abolition of religion as the illusory happiness of the people is the demand for their real happiness. To call on them to give up their illusions about their condition is to call on them to give up a condition that requires illusions. The criticism of religion is, therefore, in embryo, the criticism of that vale of tears of which religion is the halo.

The more miserable the material conditions of the people, the more intensely religion gets a stranglehold on them. And in a vicious cycle of dependency, religion pulls them down further into the abyss. Monotheistic religions have done so in the past and will continue to do so into the foreseeable future—intensify the misery that gave birth to them.

Spirituality, on the other hand, arises within people only when they are freed from a miserable existence and have the luxury to search for truth and meaning in attempt to fully comprehend their own selves.

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I clearly recall the shock that I experienced when I first learnt of the Opium Wars. Over the years, as I have learnt more about the ways of the world, the Opium Wars have become a powerful symbol—a metaphor—which I employ to explain to myself some of the features of the world.

I like metaphors. Take the sinking of the steamship Titanic, for instance. Enormous hubris, simple common place human errors, an unfortunate set of natural circumstances, and engineering design flaws combined to produce what has become an enduring symbol of failure. Of course, failures can give rise to high drama and very successful motion pictures.

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The Opium Wars is the perfect metaphor for many situations we face today. It combines greed for wealth, lust for power, racial prejudice and ruthless efficiency. It is a mirror that reflects via the present the past into the future. A cross-sectional snapshot of forces that played on that stage in the early nineteenth century, it is still an accurate picture of the world stage today with a few surprising changes in the roles of the actors.

The 19th century story is simple. Chinese goods were in demand in the Western world but the Chinese could not find much that they would want in exchange from the West. So they were being paid in silver. This drain of European currency was not desirable and so the British decided that selling drugs to the Chinese was a great idea. Procure the opium in India and sell it to the Chinese—illegally if they could get away with it, and if not, fight a couple of wars.

Here is James L Hevia quoted in Critical Montages:

By the early part of the nineteenth century, British Indian opium had stanched the flow of New World silver into China, replacing silver as the commodity that could be exchanged for Chinese tea and other goods. By the 1830s, silver was flowing out of China to India and beyond. As opium imports in China steadily increased, the political and economic results in India, Britain, and the greater empire were profound. . . . [T]ea and sugar duties helped to pay for the Royal Navy’s upkeep and development. Opium revenues in India not only kept the colonial administration afloat, but sent vast quantities of silver bullion back to Britain. The upshot was the global dominance of the British pound sterling until World War I.

In this respect, the figures compiled by John Richards in his study of opium revenue in India ["The Opium Industry in British India," The Indian Economic and Social History Review 39.2-3, 2002, pp.149–180] are instructive. Managed through the East India Company monopoly, opium, by 1839, accounted for around 11 percent of the total revenue of the British establishment in India, a figure that held for the next decade. After 1850, the opium produced 16–17 percent of revenues, peaking at 100 plus million rupees (10 million pounds sterling) annually by the early 1880s. Over this period of time, opium revenues equaled around 42 percent of the land tax, the other main source of monies of the British Raj. Although there was a drop-off after 1890, opium still generated around 8 percent of total revenue for the next two decades at an average of about 75 million rupees annually. The direct revenue generated by opium in India was supplemented by the inflow of silver from sales of the drug in China. In 1839, the figure was 22.6 million rupees, and it steadily increased to around 41 million rupees per year on average in the decade from 1865 to 1875. There was a reduction afterwards, but around 22 million rupees per year still entered India through the mid-1890s. In addition to these monies, there was also a movement of silver bullion from the British trading firms in China, such as Jardine and Matheson, to London banks.

As Carl Trocki has argued, and Richards’ data supports, without opium the British global empire is virtually unimaginable. [Emphasis mine.-Atanu]

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Like religion is the opium of the masses, wars are the opium of the states.

At some time, the people have to be distracted from their real miseries and the state pacifies (if that is the right word) the people by engaging in war with an enemy, real or imagined. People cannot engage in war, only states can. The more powerful the state becomes relative to the power of the people, the more wars the state engages in. Military dictatorships are obvious candidates of this general principle but so-called democracies are not exempt. When the state is relatively weaker than the people, wars are less likely because the state is not sufficiently powerful to overrule the desire of the people to lead a peaceful existence.

The military dictatorship in Pakistan is typical in this regard. The people of Pakistan are powerless, poor, and their suffering is real. The state is powerful and distracts its people by waging a perpetual war against India. To maintain power—and indeed to increase its power relative to the power of the people—the military has to increasingly spend the national resources in buying more weapons.

There is a great deal of difference between the US and Pakistan, of course. However, when it comes to the use of war to distract people, the basic outline remains the same.

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It is probably the ignorance of history that saves a lot of people from the charge of hypocrisy in their so-called “war on drugs”. But I cannot attribute to ignorance of history the hypocritical condemnation of the “weapons of mass destruction” by those who invented them in the first place, and continue to build more of them.

I have often marveled at the horrors that sanctimonious religiosity devoid of spirituality has inflicted on humanity. Fundamentally it is the quest for raw power that motivates both the leaders of organized religions and the leaders of governments to increase their hold on the population. In the case of monotheistic religions, increasing the membership and having increasing control over the members’ life is the way to power; in the case of governments, increasing the size of the government and intruding in the private and public lives of its citizens is the way to power for the leaders.

The real disaster of course occurs when both the institutions—the religious and the governmental—are run by the same set of people. A relevant example is the Islamic countries. An Islamic state is by definition a government run by the religious institution. Therefore Islamic states behave internally as expected: heavily intrusive in the private and public life of its citizens; and externally as expected: waging wars with its neighbors. The founders of the United States of America understood the dangers unchecked governmental power, as much as they understood the power and corruption of churches. They therefore wisely put a barrier in place between the two. But slowly that barrier is eroding and a government which intrudes into the private lives of its citizens is beginning to emerge, and a government that undertakes needless wars overseas is evident.

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In the case of India, the majority of Indians are do not subscribe to intolerant monotheistic creeds. Due to this, an all-powerful religious institution cannot grow up. In a sense, it is as if in the religious sphere, India has a competitive market and is not dominated by a monopolist. As long as the monotheists don’t take over India (and I am not sure one day India may not become majority monotheistic), India is safe from that threat. But India is more and more vulnerable from the other evil: powerful government.

An increasingly bigger and powerful government is the real and present danger that India faces. It was a large intrusive controlling government that has forged the chains that have held the Indian economy captive since independence. The British created that government for its own extractive and exploitative ends and once the British left, those who took over the reins were more than willing to enjoy the benefits of power over the economy. However, a government that becomes powerful does so only at the expense of the power of the people. And since the power of the people determine the prosperity of the nation, the more powerful the government relative to the people, the more impoverished the nation is.

If you want a prosperous nation, you must have a powerful people and a weak government. For India to develop, the power has to shift from the government to the people. That is the law.