This discussion takes the view that poverty and school failure are not the results of natural disabilities, but rather they are the result of a conflict in our society between two opposed cultures; and that the conflict will not be resolved in any favorable way unless the dominant culture recognizes the values of the dominated culture, and changes its way of dealing with it. Ethnographic data of peer groups in Harlem are described to document the existence of the conflict between the value systems of the members and value systems of the schools. Analysis of the data gives weight to the view that it is the conflict of values and social systems that is the primary cause of reading failure, not the intelligence ability or family background of the children in school. A study of the sociolinguistic characteristics of Puerto Ricans of East Harlem closely parallels that of the peer groups in South Central Harlem. Study of linguistic change in northern speech communities shows competing value systems among whites also. The position is taken that many values associated with vernacular culture are more suited to the learning process than the current standard school system values. The individualistic and competitive techniques and expectations of the school system contrast with the close group cooperation and motivation that are encouraged in groups. (AMH)