Richard Price is the passionate, committed chronicler of America's inner-city flipside. John Williams applauds a new epic from the Dickens of the projects
There's a scene at the end of Richard Price's first novel - The Wanderers, which made him a New York literary star aged 24 - in which a young white girl is raped by a black man. It's not especially important in terms of the novel that the rapist should have been black, but there it is.

Twenty-four years later, Richard Price has a new novel called Freedomland (Bloomsbury, pounds 16.99). At its beginning, a white woman walks out of the New Jersey night into a hospital, her hands lacerated, saying she has been the victim of a carjacking. She claims that she has been assaulted and her car stolen, along with her four-year-old son asleep in the back. She says the carjacker was a black man.

This time, the fact that the perpetrator is black is crucial. In a nutshell, Freedomland is about what happens when a white woman accuses a black man of a dreadful crime. It's an archetypal story in a nation in which race is still the great divide; so what the remaining 500 pages investigate is not just whether the woman's claim is true or false, but what the consequences of such an allegation will be. Out here, in Freedomland.

American readers will almost certainly recognise the origins of this story. It is inspired by a modern cause celebre, the Susan Smith affair. In 1994, in South Carolina, a white woman went to the police, telling them that a black man had stolen her car with her two kids inside. Months later, she confessed that she herself had strapped the kids into their child seats and driven the car into a lake, drowning them both.

It's a depressing comment on the lack of contact between modern fiction and what one might refer to as the real world that when a serious novelist writes a book inspired by such an event, it is seen as rather unusual and, perhaps, just a little unworthy. The thinking seems to be that if novelists must draw on news events, they should have the decency to dredge them out of the distant past - as if a story researched in a library is somehow more meaningful than one glimpsed on tabloid TV.

Perhaps that's why Richard Price's novel seems to come from a different era. It recalls a time before postmodernism (ie the 1950s), when it was taken as a given that social realism was a valid aim for a novelist, and popular writers such as Nelson Algren in the US or Alan Sillitoe in the UK were writing serious working-class fiction. With Freedomland, Richard Price reminds us that one of the key roles of the novelist has always been that of the reporter.

Price has always been conscious of the hidden power of class in America. He started out young, writing fast, funny, angry novels taken direct from his blue-collar Brooklyn boyhood - The Wanderers, Blood Brothers. He followed up with Ladies Man, a downbeat, cynical, and quintessential Seventies novel about a bachelor adrift in Manhattan. Then, after writing a fat Bildungsroman, The Breaks, about a young man's college years, he hit a brick wall. Ironically, Price had written himself out of the blue-collar life that had inspired his fiction, and found himself with nothing to write about. A decade in Hollywood followed, offering him first a cocaine addiction and then the more profitable insight that he didn't have to write about himself any more. And so he began to hang out with New York cops, watching, learning, and finally writing a great big beast of a book called Clockers, an epic novel of a New Jersey ghetto in the crack years.

In common with the best of today's crime novelists - Walter Mosley, Daniel Lehane, George P Pelecanos - and with precious few "literary" novelists, Price communicates a sense that the writer has a responsibility to tell it like it is. But for unlike most of them, as soon becomes clear, for him this is not enough. He wants to see things change. At heart he's a crusader in the Algren mode.

As, too, is the hero of Freedomland. Lorenzo Council is a fat, black, asthmatic cop, and his turf centres on the Armstrong Houses, a bunch of high-rise slums on the edge of Dempsy, New Jersey. Lorenzo's a man who has screwed his life up once but has remade himself as a cop and has come back to the Armstrong Houses in the belief that the law can wear a human face and win the respect of the people it has to police. Around Armstrong they call Lorenzo "Big Daddy". He likes that.

What he hates is what Brenda Martin, the woman who claims she was carjacked, does to his territory. The minute she shows up in hospital, Lorenzo's world starts to catch fire. The police come down on Armstrong like gangbusters. Lorenzo is stretched to his limit persuading the local rabble-rousers not to spark a riot. All the while, he's trying to get the truth out of Martin.

That's the crux of the book, the wait for the traumatised Brenda to tell the full story. Somehow Price manages to spin out the wait over 400 pages. It's the kind of pacing that the Victorians might have gone for, but is likely to frustrate today's seekers after instant gratification. In the end, though, it is worth it, for when the payoff comes it hits you like a steamroller. Not since Toni Morrison's Beloved have I read a new novel that packs quite so much emotional force.

Which is not to say that this is in every way a great novel. Lorenzo Council is a wonderful character, a man almost killing himself in his efforts to do the right thing. Like Chester Himes's Coffin Ed and Gravedigger, he's a cop who cannot forever put off the realisation that in America, when the chips are down, it really is a matter of black and white. Brenda Martin, too, when she emerges from her shell, is a tragic figure. The awful irony at the heart of the book is that it should be the genuinely non-racist Brenda who ignites racial strife.

Other characters work less well, though; the reporter Jesse Haus, whose story Price follows alongside Lorenzo's, never quite emerges into three dimensions. And, to get nit-picky, the list of classic deep soul records that Brenda listens to is a little too perfect.

But Freedomland is still a compelling portrait of America's flipside, and a novel that obliges you (as Dickens did, as Algren did) to engage with it. It demands a response not simply on the level of "how was the plot for you?", but "what should be done?"

The news Price has brought back from the front line is that the game has moved on since the world of Clockers. The idea that a plague - Aids, crack - is going to wipe out black America proved to be false: the truth is better and worse than that. Black America survives but in a state of constant plague. Aids and crack haven't gone away; they just haven't impinged too much on WASP culture. The sorry truth is that the only time the outside world shows an interest in the ghettoes is when a white woman says she has been carjacked or the projects themselves erupt in flames. It's evidently a much longer walk to Freedomland than once was hoped.