The one-way movement of wealth in the banana trade contributed to the political and economic conditions that challenged its hegemony after World War II.
Are bananas a cruel imperial imposition? Not exactly—but peeling back the history of one of the world’s most-consumed fruits reveals a grim past of global inequality, economic asymmetry, and neocolonialism.
The Musa acuminata plant, endemic to Asia and Oceania, was originally introduced to the Americas via the Canary Islands during the Columbian Exchange. Spanish and Portuguese colonial settlers and missionaries recognized the potential for fruit crops in the fertile soil and humid climates of Central and South America. As the global appetite for bananas grew in the nineteenth and twentieth centuries, so too did a growing list of incentives for cheap capital—leading to unchecked violations of human rights, labor laws, and climate safeguards.
The cultivation of bananas paved the way for what would become a grand exploit between US markets and agricultural regions to its south—defined by their pejorative exonym, “banana republics.” Banana republics are, as defined by Marcelo Bucheli, a scholar of the political economy of multinational corporations, the “quintessential representation of American imperialism in Latin America,” structured by American fruit companies that profited by “holding the local governments in [their] pockets, controlling the local economy of the host countries, and harshly exploiting the plantation workers.”
One of the earliest steps taken toward the banana republic model of wealth extraction was the first importation of bananas to the US by Lorenzo D. Baker in 1870.
Many scholars, including Bucheli, look at the global banana trade as an axle of export-driven wealth inequality, a historical source of ongoing economic instability in Latin America.
One of the earliest steps taken toward the banana republic model of wealth extraction was the first importation of bananas to the US by Lorenzo D. Baker in 1870. In 1899, Baker’s business interests merged with those of Minor C. Keith and Andrew W. Preston, creating a trading company that controlled the entire banana supply chain. As Bucheli explains,
Keith already owned banana plantations in Colombia and the Caribbean, controlled a railway network in Central America, and dominated the banana market in the southeastern United States. Preston and Baker owned a steamship fleet, possessed lands in the Caribbean, and controlled the banana market in the US Northeast.
Out of this merger came United Fruit Company (UFCO), an alliance that solidified an “impressive production and distribution network” that included
plantations, hospitals, roads, railways, telegraph lines, housing facilities, and ports in the producing countries, a steamship fleet (the Great White Fleet, which eventually became the largest privately owned fleet in the world), and a distribution network in the United States.
Perhaps not surprisingly, along with this sprawling operation came a one-way export model of asymmetrical growth—one whose political entanglements still infuse instability into global economies today.
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From a commercial angle, the merger was a lucrative business idea: the men’s entrepreneurial interests aligned, they had existing offshore investments on which they could capitalize, and they were able to eliminate their competition while propelling their own businesses forward. From the geopolitical angle, however, this was a neocolonial scheme of the utmost consequence: in subsidizing the region’s markets, land, and transportation networks, UFCO created an unchecked system that stripped Latin American resources and redistributed them into Western markets.
In general, companies that hail from economic Goliath states tend to disrupt the socio-political structures of their smaller host countries. And over time, the number of social movements and labor protests that condemned UFCO’s mercantilist endeavors grew—as did the complexity of internal conflicts stemming from UFCO policies backed by a US government intent on suppressing communist-backed resistance movements.
In a second paper with Min-Young Kim, Bucheli analyzes the limitations of vertical integration—when every component of the production and distribution network is owned by the same entity—for companies operating in evolving and unstable political and social landscapes after World War II. In a comparative case study of Costa Rica, Guatemala, and Honduras, Bucheli and Kim explain how the extractive relationships between multinational corporations and their host countries can affect obsolescing legitimacy, a concept they define as “ a foreign firm’s gradual loss of legitimacy before the local society resulting from the identification of this firm with a previous social and/or political increasingly perceived as illegitimate. ”
As Bucheli and Kim point out, before the war, UFCO faced few challenges to its vertically integrated production and marketing structure, as it was backed by the “ overwhelming and unchallenged political economic power ” of the US. During the Cold War, however, as a wider segment of the population began to participate in national politics, UFCO found itself “ confront[ing] governments that questioned its power and past relationship with more dictatorial regimes. ” Though the histories and politics varied from country to country—Costa Rica is not Guatemala is not Honduras—“the institutional changes taking place in Central America provided an incentive [to UFCO] to de-integrate its operations.”
UFCO still exists today, albeit under a new name—Chiquita. Many of the effects introduced by the one-sided banana trade are still prevalent today, albeit largely swept under the metatheoretical rug of letting bygones be bygones. At the global level, many economies in Latin America remain insular, lacking clout in global value chains. While bananas are a ubiquitous staple in the international diet, the economic rewards remained largely reaped by economic hegemons.
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