banana republic

The phrase banana republic was coined in 1904 by American writer O. Henry. In political science, the term banana republic describes a politically and economically unstable country with an economy dependent upon the export of natural resources.

A banana republic is a country with an economy of state capitalism, where the country is operated as a private commercial enterprise for the exclusive profit of the ruling class. 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 exploiting labor. 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. At the same time, the debts incurred thereby are the financial responsibility of the public treasury. Therefore, 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.