Mehrsa Baradaran argues in The Color of Money: Black Banks and the Racial Wealth Gap that the racial wealth gap evident in America today developed through institutional exploitation akin to codified Jim Crow segregation. As the twentieth century unfolded, the racial wealth gap ossified through a tangled web of discrimination involving property ownership, banking, credit, finance, extreme state intervention, and racism. Its development was both institutional and ideological. The Color of Money contributes to the growing body of literature that addresses the role of racism and capitalism in shaping our current society, such as Michelle Alexander's The New Jim Crow: Mass Incarceration in the Age of Colorblindness (2010). Other recent works in this vein are Louis Hyman's Debtor Nation: The History of America in Red Ink (2011), N. D. B. Connolly's A World More Concrete: Real Estate and the Remaking of Jim Crow South Florida (2015), and Richard Rothstein's The Color of Law: A Forgotten History of How Our Government Segregated America (2017). Collectively, these works demonstrate the complex interconnections found in understanding how capitalism makes some rich and others poor. Moreover, Baradaran demonstrates that capitalism is not some invisible force that works best for those who know the hidden rules for using its power. Instead, she shows that real people make real decisions that shape capitalism's pragmatism. The Color of Money attempts to make clear the historical realities that shaped white gains and black losses. Using a tapestry of sources, including black banking literature, Bureau of Labor statistics, speeches, congressional reports, and periodicals, Baradaran demonstrates the insurmountable odds that black people faced in building wealth.

After the Civil War, the one thing blacks needed to actualize their freedom was land. Beginning in the Reconstruction era, Baradaran argues, rather than land, black people were given a savings bank: the Freedmen's Savings and Trust Bank. Land distribution was unthinkable, even for most Republicans in Congress; instead, blacks were encouraged to deposit their earnings in the Freedmen's Bank, with the hope of one day owning a home. Since it was a savings bank, and did not perform the same functions as a commercial bank, the Freedmen's Bank essentially held money for black people—what Baradaran calls a “heavily advertised piggy bank” (p. 24). In a tragic turn of events, bank officials began using the deposits of black people to engage in railroad speculation. Essentially, the Freedmen's Bank became a “highly leveraged investment bank” (p. 27). Just as the bank's investments in railroads tanked, so too did the earnings of black depositors. Blacks—excluded from property ownership, their effort to accumulate wealth now derailed—did not have true control of their money. To remedy this, toward the end of the nineteenth century, blacks began opening their own banks; however, these efforts were ephemeral in their effectiveness because of the intensity of black poverty. Adding to the obstacle of poverty was the dual purpose of black banks: helping black people build wealth and empathizing with customers. Baradaran demonstrates many times that these two goals conflicted with each other.

This was not the only tension existing within black banking. Black banks could not multiply capital through the fractional reserve banking model that most commercial banks used to make money. In fractional reserve banking, banks assume that depositors will use only part of their deposits at any given time, and banking officials hold on to part of these deposits and lend out the rest. The small sums of black deposits made the use of this model unfeasible. To generate income, black banks thus focused on procuring home loans for their customers. But even this contained problems: when a black person took out a loan for a home, usually in an area that the market deemed undesirable, the loan would immediately lose value. In addition, at the beginning of the twentieth century, black tenants paid relatively high prices for housing that was of a poor quality. Thus, both enterprising blacks and poorer blacks faced hurdles to building wealth. This practice continued. In the 1990s, higher-earning blacks were offered subprime mortgages when they could actually afford prime mortgages. If this wasn't enough, Baradaran makes clear that black banks were also responsible for redistributing black dollars into the white community. Once again, black dollars worked for white folks, not for black economic uplift. Thus, she concludes that the very problems that were responsible for creating the need for black banks are the reason they will almost never thrive (p. 92).

One of Baradaran's most important contributions is in reexamining common narratives about the civil rights movement, housing discrimination during the New Deal era, the changing of Dr. King's rhetoric from civil rights to human rights, and the move from the War on Poverty to the War on Crime through the lens of the racial wealth gap. When the federal government created new fiscal instruments, such as “a large insurance fund backed by the U.S. Treasury” that undergirded mortgage loan risk, black people were excluded from the benefits, such as access to cheap mortgage payments and the burgeoning consumer credit market (p. 106).

In the final chapters Baradaran examines wealth gap statistics, arguing that the wealth gap will always exist. To bridge the gap, there would need to be a specific program designed both to acknowledge the creation of the racial wealth gap through exploitation that she describes in her book and to single out blacks for a state-sponsored economic program containing reparatory provisions.

The Color of Money is outstanding. It accomplishes its purpose of making clear how the racial wealth gap developed in the twentieth century. Baradaran makes difficult financial concepts relatable, thus helping readers to not feel intimidated when trying to understand how these concepts helped shape inequality in America. Her narrative also raises questions that beg further research. When did the racial wealth gap begin? Did working-class black people see banking as a viable option for building wealth or achieving first-class citizenship? Or is this a middle-class approach to understanding wealth accumulation? Are specific government programs needed to fix the wealth gap? What sort of models actually build wealth?