American Capitalism vs. Democratic Socialism Reader

[David Heal]

i can't even claim that this post is even tangentially related to anything currently being discussed, 
but since there seems to be a bunch of disparate threads currently being thrown around, i thought i'd 
solicit some help.  somehow i ended up on my college's democratic socialism club mailing alias and there 
hasn't been much activity of late, with the exception of a movement to boycott CBS and survivor and other
abortive attempts at mobilizing the campus. but recently a few list members have been taking part in a casual 
discussion on capitalism and its relationship to racism.  i'll post an excerpt below for reference purposes and would
be willing to here a critique of this guy's opinion.

"Capitalism is based upon
  UNEQUAL distribution of resources. Capitalism needs social institutions
  like racism and especially a class system to justify the exploitation of the
  masses. Remove racism which is in large part a capitalist construction and
  the class system then there would be no capitalism. Just as the effort to
  create a utopian communist state ended in failure and misery, so will the
  effort through modernization to create a utopian capitalist state."

anyways, the vibe i get from this group is mainly one of a distinct anti-capitalist nature but with a conspicuous
lack of real solutions.  what i'd like from the resident know-it-alls is a few suggestions for books which i might be able
to consult which deal with the extent to which socialist programs might be a solution to some of the more unsavory
byproducts of american capitalism.  i'd like to be able to participate in a meaningful way in these types of conversations
but i've admittedly neglected this part of my self-education.  any ideas, suggestions?

-dave