Chapter 5 of Savage Inequalities continues the investigation into what stops equity in public education, looking at how definitions of "equity" and "excellence" excuse inequality and permit segregation. Kozol's attention is in Maryland, beginning with a 1978 legal case on the question of equity in its schools. Kozol attests that the failure of this lawsuit speaks to a fundamental divide in how Americans think about schooling—that is, a dichotomy that separates one group into the country's "governors" and the others into the "governed." Kozol argues that race is the primary determinant in how this division is created and sustained. "Coded" racial bias, he argues, allows Americans to tolerate this injustice.

Kozol discusses how the "winners" and "losers" from this unfair competition see themselves; this reflection is heavily influenced by how individuals regard discrimination—whether they see it as part of the past, or part of the present. Separated from the dire circumstances of poverty, the "winners" see themselves as such—they have mastered their circumstances. Moreover, Kozol writes, they regard discrimination and injustice as part of the past. For the children of the "losers," this injustice is a present reality, one that they internalize to understand they are worth less than other children.