The income of blacks in most northern industrial states today is lower relative to the income of whites than in 1949. Fusfeld and Bates examine the forces that have led to this state of affairs and find that these economic relationships are the product of a complex pattern of historical development and change in which black-white economic relation­ships play a major part, along with pat­terns of industrial, agricultural, and technological change and urban develop­ment. They argue that today’s urban racial ghettos are the result of the same forces that created modern Amer­ica and that one of the by-products of American affluence is a ghettoized racial underclass.

These two themes, they state, are es­sential for an understanding of the prob­lem and for the formulation of policy. Poverty is not simply the result of poor education, skills, and work habits but one outcome of the structure and func­tioning of the economy. Solutions re­quire more than policies that seek to change people: they await a recognition that basic economic relationships must be changed.

Daniel R. Fusfeld teaches economics at the University of Michigan and is au­thor of The Basic Economics of the Ur­ban Racial Crisis.

Timothy Bates teaches economics at the University of Vermont and is author of Black Capitalism: A Quantitative Analysis.