banana republic

In political science, the term banana republic describes a politically unstable country with an economy dependent upon the export of natural resources. In 1904, the American author O. Henry coined the term to describe Honduras and neighboring countries under economic exploitation by U.S. corporations, such as the United Fruit Company (now Chiquita Brands International). Typically, a banana republic has a society of extremely stratified social classes, usually a large impoverished working class and a ruling class plutocracy, composed of the business, political, and military elites. The ruling class controls the primary sector of the economy by way of the exploitation of labor; thus, the term ''banana republic'' is a pejorative descriptor for a servile oligarchy that abets and supports, for kickbacks, the exploitation of large-scale plantation agriculture, especially banana cultivation.

A banana republic is a country with an economy of state capitalism, whereby the country is operated as a private commercial enterprise for the exclusive profit of the ruling class. Such exploitation is enabled by collusion between the state and favored economic monopolies, in which the profit, derived from the private exploitation of public lands, is private property, while the debts incurred thereby are the financial responsibility of the public treasury. Such an imbalanced economy remains limited by the uneven economic development of town and country and usually reduces the national currency into devalued banknotes (paper money), rendering the country ineligible for international development credit.
Countries

Etymology

In the 19th century, the American writer O. Henry (William Sydney Porter, 1862–1910) coined the term ''banana republic'' to describe the fictional Republic of Anchuria in the book '' Cabbages and Kings'' (1904), a collection of thematically related short stories inspired by his experiences in Honduras, whose economy was heavily dependent on the export of bananas. He lived there for six months until January 1897, hiding in a hotel while he was wanted in the U.S. for embezzlement from a bank.

In the early 20th century, the United Fruit Company, a multinational American corporation, was instrumental in the creation of the banana republic phenomenon. Together with other American corporations, such as the Cuyamel Fruit Company, and leveraging the power of the United States government, the corporations created the political, economic, and social circumstances, that led to a coup of the locally elected democratic government that established banana republics in Central American countries such as Honduras and Guatemala.

Origin

The history of the banana republic began with the introduction of the banana fruit to the U.S. in 1870, by Lorenzo Dow Baker, captain of the schooner ''Telegraph'', who bought bananas in Jamaica and sold them in Boston at a 1,000% profit. The banana proved popular with Americans, as a nutritious tropical fruit that was less expensive than locally grown fruit in the U.S., such as apples; in 1913, 25 cents () bought a dozen bananas, but only two apples. In 1873, to produce food for their railroad workers, the American railroad tycoons Henry Meiggs and his nephew, Minor C. Keith, established banana plantations along the railroads they built in Costa Rica; recognizing the profitability of exporting bananas, they began exporting the fruit to the Southeastern U.S.

In the mid-1870s, to manage the new industrial-agriculture business enterprise in the countries of Central America, Keith founded the Tropical Trading and Transport Company: one-half of what would later become the United Fruit Company (UFC), later Chiquita Brands International, created in 1899 by merger with the Boston Fruit Company, and owned by Andrew Preston. By the 1930s, the international political and economic tensions created by the United Fruit Company enabled the corporation to control 80–90% of the banana business in the U.S.Alison Acker (1988), p. 63.

By the late 19th century, three American multinational corporations (the United Fruit Company, the Standard Fruit Company, and the Cuyamel Fruit Company) dominated the cultivation, harvesting, and exportation of bananas, and controlled the road, rail, and port infrastructure of Honduras. In the northern coastal areas near the Caribbean Sea, the Honduran government ceded to the banana companies of a laid railroad, despite there being neither passenger nor freight railroad service to Tegucigalpa, the capital city. Among the Honduran people, the United Fruit Company was known as ''El Pulpo'' ("The Octopus" in English), because its influence pervaded Honduran society, controlled their country's transport infrastructure, and manipulated Honduran national politics with anti-labor violence.

In 1924, despite the UFC monopoly, the Vaccaro Brothers established the Standard Fruit Company (later the Dole Food Company) to export Honduran bananas to the U.S. port of New Orleans