In 1925 a former employee of the United Fruit Company (UFCO) in Guatemala described race relations in the banana plantation where he had worked: ‘All persons of color must always give the right of way to whites, and remove their hats while talking. A rule also forbids any laborer from entering the front yard of any white man's residence’ (p. 112). Needless to say, homeowners with front yards were administrators, while people of colour were the labourers, themselves separated into two groups: West Indian immigrants and Guatemalans. Jason Colby argues that racial segmentation was a crucial element in the labour strategy of the banana company and that racial relations defined the culture of US imperialism. He asserts that ‘transnational American firms, like the U. S. imperial state, were cultural as well as institutional constructs’ (p. 13), and shows that in the early twentieth century companies such as UFCO were at the forefront of the empire. They were as much part of the construction of the imperial culture as marines or overbearing diplomats and proconsuls.

This book, the product of research in archives in Costa Rica, Great Britain, Guatemala and the United States, starts by arguing that race relations in the banana plantations were not a mere iteration of the racism that previously existed in the host countries or the inevitable baggage that arrived with whites from the US South. The enforcement of racial hierarchies observed by the employee quoted above was a labour control strategy developed in the industries of the northern United States in the second half of the nineteenth century. It was a modern capitalist construct designed to maximise profits.

The book abounds with fascinating stories that put a human face on the author's main arguments. We have, for example, the case of Victor Cutter, a New England boy who grew up in a textile town where he learned how to manage an ethnically diverse workforce. To qualify for graduation for his Master's degree in business administration Cutter wrote a thesis on the opportunities that opened up for business in the Philippine Islands and on the economic advantages of being a colonial power. With this background, it is not surprising that UFCO hired him to manage its properties in Guatemala. It was the beginning of a successful career. During the period of the formation of imperial culture in Central America between 1904 and 1912, UFCO employees such as Cutter instructed newly arrived US diplomats on how divisive racial politics made the system work.

The adaptation of the business strategies of the industrial Northeast to agricultural Central America involved the importation of large numbers of black workers from the West Indies to build railways and work in banana plantations. West Indians, British subjects with an independent streak, were placed in positions of authority over Guatemalans and Costa Ricans. In this way the company dramatically transformed the demographics of the Atlantic coast and created a situation of hostility between immigrants and locals. This separation was useful during the frequent episodes of labour unrest: when there were labour disputes, it was not difficult to find strike-breakers.

The author charts in a systematic manner the evolution of these racial dynamics and their consequences. The book is organised in a chronological sequence of events showing step by step, episode by episode, the relevance of race relations in the imperial enterprise and their impact on the host countries (mainly Guatemala and Costa Rica). This strategy may seem to the reader somewhat repetitive, even relentless, but it is very effective for clinching the argument. The history begins in 1850 with the Clayton–Bulwer Treaty, which facilitated the recruitment of workers from the West Indies to build the Panama Railroad in 1855. It continues with the construction of the Panama Canal, the first Minor Keith ventures in Costa Rica and Guatemala, and the Great Depression, up to the transformation of the powerful UFCO, the ‘Octopus’, into the less conspicuously named Chiquita Brands.

In standard textbooks the role of UFCO in local politics is presented as that of a domineering force intent on imposing its will for the sake of profit, and Colby does present evidence that supports this view. The enormous power of the company did not translate into automatic positive responses to its wishes on the part of the state, however. The book shows that the interests of Central American leaders were not necessarily the same as those of the company, and they often sought to limit its power. Moreover, they had to deal with popular pressures that forced them to play a careful game.

In the United States this book will be seen as an important contribution to the ‘America in the World’ approach; in Central America it will be read as an influential revision of the impact of the ‘Octopus’ on internal processes. Without a hint of dependency theory (it used to be mandatory to refer to dependency when writing about UFCO), Colby's perspective sheds new light on the fruit company's impact on the economies, societies, politics and foreign relations of Central American countries. The dynamics of UFCO-imposed demographic changes and race relations introduced a potent and volatile element in domestic politics. It was not difficult to build a following (to strengthen governments or to challenge them) by appealing to nationalism mixed with hostility to black immigrants. The rhetoric used in 1930 by a Costa Rican politician advancing his career by opposing a new contract with UFCO illustrates this point: ‘The negro is the shadow of the banana … Although today this shadow is confined to the Atlantic Zone, it will move toward other sectors of the republic, which remain unknown because the banana negotiations of 1930 deliberately silence the issue’ (p. 185).

In a recent article on Mexican historiography Alan Knight established three criteria to determine historiographical quality: being right, being clear and being original. This enriching book succeeds on all three accounts, shedding new light on subjects that we thought we knew well.