Opium and Entrepreneurship in the Nineteenth Century

This case examines the role of Jardine Matheson, a trading company founded by two Scottish merchants, in the opium trade between India and China during the nineteenth century. The two Opium Wars fought between Western powers and China, which sought to stop opium imports, resulted in China losing much of its autonomy. The case explains how it was British demand for tea which led to companies like Jardine Matheson developing the opium business. China had at the time the world’s largest handicraft sector and there was no demand for goods manufactured in the West, so opium was sold in exchange for tea. Jardine Matheson proved particularly successful in this business. It invested heavily in shipping, developed relationships with both Indian producers and the Chinese merchants who distributed the product, and had a closely-knit corporate culture which recruited almost exclusively within its community of origin in Dumfriesshires, a small county in Scotland. The case is widely positioned in the geo-politics of the era and can be used to demonstrate the dark origins of global capitalism. China was globalized by force in this era, and forced to consume opium which its government had made illegal.