Banana republic

Banana republic or banana state is a political science term used originally for politically unstable countries in Latin America whose economies are largely dependent on exporting a limited-resource product, e.g. bananas. It typically has stratified social classes, including a large, impoverished working class and a ruling of business, political, and military elites. This politico-economic oligarchy controls the primary-sector productions to exploit the country's economy.

The history of the first banana republic begins with the introduction of the banana to the US in 1870, by Lorenzo Dow Baker, captain of the schooner Telegraph. He initially bought bananas in Jamaica and sold them in Boston at a 1,000 percent profit. The banana proved popular with Americans, as a nutritious tropical fruit that was less expensive than fruit grown locally in the U.S., such as apples. In 1913, for example, twenty-five cents (equivalent to $6.06 in 2016) bought a dozen bananas, but only two apples. Its popularity among Americans was also spurred by the American railroad tycoons Henry Meiggs and his nephew, Minor C. Keith, who in 1873 began establishing banana plantations along the railroads they built in Costa Rica to produce food for their railroad workers. This experience led them to recognize the potential profitability of exporting bananas for sale, and they began exporting the fruit to the Southeastern United States.

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 (Chiquita Brands International, created in 1899 by corporate merger with the Boston Fruit Company and owned by Andrew Preston). By the 1930s, the international political and economic tensions of the United Fruit Company had enabled it to gain control of 80 to 90 per cent of the U.S. banana trade. Nonetheless, despite the UFC monopoly, in 1924, the Vaccaro Brothers established the Standard Fruit Company (Dole Food Company) to export Honduran bananas to the port of New Orleans in the Gulf of Mexico coast of the U.S. The fruit exporters were able to keep U.S. prices so low because the banana companies, through their manipulation of the producing countries' national land use laws, were able to cheaply buy large tracts of prime agricultural land for banana plantations in the countries of the Caribbean Basin, the Central American isthmus, and the tropical South American countries—and, having rendered the native peoples landless through a policy of legalistic dispossession, were therefore able to employ them as low-wage workers.

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