The history of the company that helped create the banana republics of Central America.
The term ‘banana republic’ is used these days as a clichéd term for any country which is badly organized or administered. Yet the term had originally a specific and literal meaning and was attached to those central American countries in which large and powerful American fruit companies held enormous power over government. The presence of technology (e.g. railroad construction) and capital (from Wall Street) enabled these fruit companies not just to buy up vast tracts of lands for banana plantations but also to enter into contracts with local governments to provide infrastructure development. The United Fruit Company (UFC), for example, possessed not just a Great White Fleet of ships to transport bananas to the USA but also considerable expertise in building railroads. The company became very powerful in Guatemala, among other countries, where American state power aided its ability to be able to avoid the legal system and establish what was virtually its own state-within-a-state. The UFC, as was typical of the multinational imperialists of the C19th and early C20th, had little interest in corporate social responsibility or indeed workers’ welfare. The company was one of those that struck deals with military juntas installed through American influence. The deals enabled the company’s to rent out portions of the local labour force at very low wages. Low wages were maintained by keeping a portion of the labour market unemployed or in agricultural under-employment and allowing supply and demand do the rest. In addition, state-mandated violence was used to intimidate or kill labour leaders or anyone daring to stand up to the company or ask for better conditions. In the most notorious instance, more than 1,000 striking UFC workers were murdered by Colombian troops in the town of Ciénaga in 1928. The so-called ‘banana massacre’ became a cause célèbre for revolutionaries, including Communists, and were used to rally support that in some cases enabled the hated US-supported military governments to be expelled.
As technology improved, new sources of exotic fruits were found and it became more feasible to transport them at low cost to the tables of the western world. The power of the fruit companies in central America and the Caribbean declined, especially in the wake of the end of most European imperialism in the years following WWII. The American government was no longer in a position to support private sector imperialism in its southern neighbours and nationalized the process.
The UFC is these days known as Chiquita Brands International and like many companies with a dark imperial past (including firms in Britain, Germany, Japan, France and elsewhere), reluctant to acknowledge its role in history or even discuss it.