Dreamshit is a mind-altering substance taken by many residents of New Crobuzon. Several criminal gangs profit from selling the illegal drug; they can maintain a consistent income because most dreamshit users are addicted, so there's a constant demand for the drug.
The drug produces severe hallucinations within users; these visual and auditory images appear incredibly life-like and can actually represent the dream-states of other people. It's common for dreamshit to cause users to accidentally defecate over themselves, hence the word "shit". We witness the visceral impact of the drug through Isaac Grimnebulin's own trip; he experiences several people's dreams, ranging from flying across towns to speaking a different language. These significant hallucinogenic effects are likely what motivated the government to make dreamshit illegal; its usage can pose a danger to other people if used within the wrong circumstances. Isaac also feels exhausted after taking the drug, so the decrease in productivity could also cause the state to demonise dreamshit.
Perdido Street Station Edit
Isaac experiments with dreamshit by accident; Lucky Gazid leaves some in his ham sandwich and he accidentally takes a bite which causes him to experience a trip. He finds it incredibly confusing and disorientating, causing him to question why the substance is so popular. Dreamshit feeds the worm which is the subject of Isaac's research in his laboratory; it causes the insect to excessively grow and out-size his cage which allows Isaac to understand the relationship between the worms and the drug. It's essentially their food and main source of nourishment, though it produces hallucinogenic effects in humans when taken in small doses.
Dreamshit is exceptionally popular in New Crobuzon and numerous gangs make a profit from trading the drug. This remains something which the government hopes to prevent in the future, though the pacification of dreamshit may actually placate the populace and make the state's job easier. However, the lack of government intervention in decreasing dreamshit usage may be due to its mass appeal; thousands of people are said to be addicted and taking away their drug may cause resistance and violent opposition to the state. Dreamshit may be "the opium of the people."