Fekete: Silver and Opium

Mauve Poppies In Field by Simon Howden / FreeDigitalPhotos.net *

“From the mid-17th century more than 9 billion Troy ounces or 290 thousand metric tons of silver was absorbed by China from European countries in exchange for Chinese goods. The British introduced opium along with tobacco as an export item to China in order to reduce their trade deficit. Under the disguise of free trade, the British, the Spanish and the French with the tacit approval of the Americans continued sending their contraband to China …”

“China was forced to pay silver for her addiction to opium smoking that was artificially induced by the pusher: the British.”

“The present trade dispute between the U.S. and China is reminiscent of the background to the two Opium Wars. Once more, the issue is the humiliation and plunder of China as a “thank you” for China’s favor of having provided consumer goods for which the West was unable to pay in terms of Western goods suitable for Chinese consumption. The only difference is the absence of opium in the dispute.

Oops, I take it back. The role of opium in the current dispute is played by paper. Paper dollars, to be precise.”
Antal E. Fekete

Silver and Opium

by Antal E. FeketeProfessor Fekete.com
24hgold.com

Originally published February 20th, 2011

The opium wars do not belong to the glorious episodes of Western history. Rather, they were instances of shameful behavior the West still has not lived down. Mercantilist governments resented the perpetual drain of silver from West to East in payment for Oriental goods (tea, silk, porcelain) that were in high demand in the Occident, facing low demand in the Orient for Occidental goods. From the mid-17th century more than 9 billion Troy ounces or 290 thousand metric tons of silver was absorbed by China from European countries in exchange for Chinese goods.

The British introduced opium along with tobacco as an export item to China in order to reduce their trade deficit. Under the disguise of free trade, the British, the Spanish and the French with the tacit approval of the Americans continued sending their contraband to China through legitimate as well as illegitimate trade channels even after the Chinese dynasty put an embargo on opium imports. Because of its strong appeal to the Chinese masses, and because of its highly addictive nature, opium appeared to be the ideal solution to the West’s trade problem. And, indeed, the flow of silver was first stopped, and then reversed. China was forced to pay silver for her addiction to opium smoking that was artificially induced by the pusher: the British.

Thus silver was replaced by opium as the mainstay of Western exports. In 1729 China, recognizing the growing problem of addiction and the debilitating and mind-corrupting nature of the drug, prohibited the sale and smoking of opium; allowing only a small quota of imports for medicinal purposes. The British defied the embargo and ban on opium trade, and encouraged smuggling. As a result, British exports of opium to China grew from an estimated 15 tons to 75 by 1773. This increased further to 900 tons by 1820; and to 1400 tons annually by 1838 — an almost 100-fold increase in 100 years.

Something had to be done. The Chinese government introduced death penalty for drug trafficking, and put British processing and distributing facilities on Chinese soil under siege. Chinese troops boarded British ships in international waters carrying opium to Chinese ports and destroyed their cargo, in addition to the destruction of opium found on Chinese territory. The British accused the Chinese of destroying British property, and sent a large British-Indian army to China in order to exact punishment.

Continue reading complete article HERE
copyright ©2010 24hGold

CNL Editor’s Note:
Who is Antal E. Fekete?

From Wikipedia, the free encyclopedia

Antal E. Fekete, founder of the New Austrian School of Economics

  • Born: January 1, 1932 in Budapest
  • Nationality: Hungarian Canadian
  • Field: Economics, Mathematics
  • Opposed to Keynes, Krugman, Friedman
  • Influences: Carl Menger, Ludwig von Mises, Adam Smith
  • Influenced: Austrian School of Economics
  • Contributions: Hexagonal Model of Capital and Interest Formation

Antal E. Fekete, Professor of Mathematics and Statistics, Memorial University of Newfoundland, Canada, is a proponent of the gold standard and critic of the current monetary system.


His theories fall into the school of economic thought led by Carl Menger. His support of the gold standard has similarities to Austrian Economics; however, Fekete’s treatment of fractional-reserve banking is different from that of Murray Rothbard.

GO to complete Wiki page: http://en.wikipedia.org/wiki/Antal_E._Fekete

Related site: http://en.wikipedia.org/wiki/Antal_E._Fekete

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