Banana republics

Banana republic is a political science term that describes politically unstable countries in Latin America whose economies are dependent on exporting a limited-resource product, e.g. bananas, minerals, etc. Typically, the banana republic has a society of stratified social classes, usually a great and poor working class and a ruling-class , composed of the business, political, and military elites of that society. Such a ruling-class oligarchy control the primary sector of the economy by way of the exploitation of labour; thus, the term banana republic is a pejorative descriptor for a servile dictatorship that abets and supports, for kickbacks, the exploitation of large-scale plantation agriculture, especially banana cultivation.

In economics, a banana republic is a country with an economy of state capitalism, by which economic model the country is operated as a private commercial enterprise for the exclusive profit of the ruling class. Such exploitation is effected 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), thus rendering the country ineligible for international-development credit.

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, where he lived for six months until January 1897, hiding in a hotel in Trujillo, Colón, when he was wanted in the U.S. for embezzlement from a bank.

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