Nationalize GM -- Or At Least Think About It

With the U.S. government offering trillions of dollars in supports for the financial sector, it is startling to witness the casual way in which many policy makers and opinion leaders suggest the U.S. auto companies should be allowed to go bankrupt.

In considerable part, this attitude reflects an anti-union and anti-blue collar animus. It also reflects the diminished economic power of what was formerly known as the Big Three (General Motors, Ford, Chrysler).

The stakes are too high for policy to be influenced by misinformation and ideological bias. The auto companies need to be saved, on terms that protect workers and communities, and advance public objectives. Congress and the country should be debating those terms, not dithering with unrealistic discussions of bankruptcy or demands to reduce already shrunken union wages and benefits.

How can we look at these issues sensibly?

First, one must note the awesome disparity in treatment for the auto industry and Wall Street. Government agencies have thrown literally trillions of dollars at the financial sector, with very light conditions, and virtually no discussion of industry salary structures (aside from limited restraints on top executive compensation). By contrast, there has been endless fulmination about supposedly excessively generous wages for unionized auto workers (see here, here, here and a critique here), and much more severe financial and oversight conditions proposed for an industry bailout.

Second, the costs of inaction to support the auto industry dwarf the cost of a bailout -- even if much more than the requested $25 billion is needed. The industrial Midwest has already been hollowed out by deindustrialization. Auto industry bankruptcy would be a crushing blow. A complete collapse of the U.S. auto companies would cost 3 million jobs -- about 240,000 employees of the companies, a million supplier jobs, and 1.7 million jobs lost from the overall economic effect -- according to the nonprofit Center for Automotive Research. In this scenario, the federal government would lose $60 billion in tax revenues and other costs in the first year alone. Even assuming something less than a complete collapse, costs would be devastating. And, as economist Thomas Palley has noted, industry bankruptcies would dramatically worsen the financial crisis.

Third, the idea that United Auto Worker members are receiving exorbitant wages putting the U.S. auto companies at competitive disadvantage is a lie.

In general, the Japanese plants in the United States ("transplants") pay wages comparable to those at unionized U.S. facilities. This has been central to their anti-union strategy. In some recent years, workers at the transplants have actually made more than their counterparts at the Big Three, thanks to profit-sharing deals.

The Big Three employers do have nontrivial healthcare and pension "legacy" costs for retirees, and this is the main employee-related difference in cost structure (the other is more generous healthcare for current Big Three workers).

It is true that, historically, auto industry jobs have paid well. Going forward, however, this will be less and less true. The concessionary UAW 2007 contracts call for many new hires to start at $14 an hour, and the UAW is preparing to offer even further concessions.

Fourth, manufacturing wages and salaries don't contribute much to the cost of a car. Total labor costs are less than 10 percent of list price. If UAW workers donated their time and all savings were passed on to consumers, it would only lower the cost of a car by $2,400.

Fifth, although the Big Three have done just about everything possible over the last decades to undermine their strength -- including making disastrous long-term product mix choices, and fighting against fuel efficiency standards -- but the proximate cause of their desperate status is the economic crisis. It is not true, as has been frequently suggested, that the Japanese companies are doing just fine. Overall auto sales in the United States have fallen by more than a third in just a year, and Toyota, Honda and Nissan have seen drops of 27 percent, 22 percent and 35 percent. It is true that the Japanese companies have a stronger base and are better prepared to weather the storm. But the storm is pouring rain on everyone.

Sixth, bankruptcy is no answer for fixing what ails the industry. It is almost certainly true, as the industry argues, that consumers will refuse, or at least be very reluctant, to buy cars from a company in or recently emerged from bankruptcy. Would you?

But at least as important for those who want to see the industry aggressively adopt fuel efficient and zero carbon emission technologies is this: Bankruptcy would limit the automakers' flexibility, and make it much harder for them to make expensive, long-term investment decisions. This is particularly true while oil prices are depressed. Things were different six months ago (and likely will be again in the not-distant future), but right now the market signals are wrong for investments in energy efficiency.

Focusing on the imperative to rescue the industry, there are two rational policy responses.

One is to give the industry loans and other supports, with tight conditions. Under consideration now in Congress is an oversight structure that would give the government authority to veto any investment over $25 million. In contrast to the free hand given to Wall Street, this would help ensure government funds are not diverted into inappropriate purposes. The existing proposal would also require the government be paid back with interest, and/or the right to benefit from subsequent improvements in company share value.

But more should be done. There should be requirements that the bailout beneficiaries invest in energy efficiency and safety technologies, with demands that they do much more than required by existing law. To give them a level playing field, these improved standards should be adopted as law, and required of all auto companies. And protections should be built in to protect workers' interests -- a key objective should be to preserve good-paying jobs, not drive everyone to Wal-Mart wages.

But more should be done. There should be requirements that the bailout beneficiaries invest in energy efficiency and safety technologies, with demands that they do much more than required by existing law. To give them a level playing field, these improved standards should also be adopted as law, and required of all auto companies. And protections should be built in to protect workers' interests.

The second rational policy approach is simply to nationalize the companies. General Motors now has a market capitalization of $2.8 billion. Ford's market value is $6.1 billion. These are relatively small amounts compared to the $25 billion the companies are requesting -- and they are likely to come back for more later.

The government has certain advantages over the companies. It can access capital more cheaply, for example.

The biggest advantage of buying the companies is that it would enable the public to exert control over the companies commensurate with its investment. There would be no need to negotiate with management, or carefully monitor managerial actions, to review 9-point plans for viability, or create incentives to have them invest in fuel-efficient technology. It would make it possible to undertake long-term, transformative investments in R&D and new transportation technologies, irrespective of today's oil price.

It is true that nationalizing the companies implies a commitment to support them despite unknown future challenges. But a commitment of $25 billion itself implies a readiness to do more if necessary, as it likely will be.

On the other hand, nationalizing the companies would entail many complications and difficulties, including managing relations with workers and plants around the world, fair dealing with suppliers and workers at suppliers, and the inherent complexity of running multinational auto companies.

Is a true nationalization the best option? Maybe, maybe not.

But the public would be a lot better off if there could be a serious discussion of the reasonable policy choices, and a lot less breath wasted on overt and disguised attacks on unionized blue-collar workers.

Comments

[suicidesoda]

I agree. Not all car companies are created equal. We should:
- Let Chrysler go
- Give Ford loans
- Nationalize GM. Then:
* Fire top management
* Sell many non-US assets, e.g. Saab, and plants in Russia. Keep capacity in South America and China
* Sell/eliminate Hummer
* Eliminate Buick and Pontiac. Make a couple of cars under them and sell through GMC. End up with Cadillac, Chevy, GMC. Consolidate all GMC/Buick/Pontiac dealerships
* Explore finding an independent buyer for Saturn
* Keep employees at current wages and health insurance
* Give laid-off employees 6 months of current income, 12 months of insurance, and 2 years of free tuition at any school
* Give retired workers over 65 100% of their pension. 80% if under 65
* Cancel existing health care coverage for all retired workers and immediately qualify them for Medicare regardless of age
* Throw out any non-competitive, feather-bedding work rules
* Make it a federal crime to strike
* Incrementally develop and sell gas powered cars and trucks
* Apply intensive efforts to develop Volt and Volt-like cars electric cars at a highly-accelerated pace. Sell cars at a steep discount
- Export electric technology to plants in China and S. America

Once the gas-side of the house is stable and the electric-side of the house/economy has critical mass [5-10 years] take the company public and cash out.

Pretty self-explanatory. The question is - does Congress have the guts? [probably not].

[research]

Buy outthe big 3 for about 10B$ as Moore suggests,

or pay at least 36B$ in unemployment.

Of Course replace the management.

Let's not be penny wise and pound foolish.

[gerald4]

Any Taxpayer funds given to the Auto Industry will only encourage the continuation of the arrogant, stupid, and selfish bad business policies of the Auto Industry executives and the UAW members. What is fair about letting the highly paid executives and union workers continue their featherbed deals, perks, stupid business decisions, and etc with taxpayer money, after these people took so much money from the Auto Industry that they bled the Auto Industry to death. Let them go bankrupt so other parties can buy the assembly plants and other facilities to re-start these plants as non-union automobile manufacturing operations. Let the Big 3 Executives disappear with the money that they took from the Auto Industry, but do not let them have any Taxpayer Funding to continue their bad business practices. The big 3 automakers are already in debt up to their ears. Any taxpayer money that they get will just go to pay off the bank debts that occurred when these financial geniuses borrowed money to pay dividends, in order to drive up the stock prices, which enriched themselves through their stock options. Let them all disappear, especially as a lesson to all of the other Enron type MBA financial geniuses that caused these problems. If the Enron type financial geniuses that caused these problems disappear then the UAW feather beds that they created will also disappear with them.

[research]

We don't want 3 million new unemployed!

Buy GM and the other two, for less than 12 Billion$

replace the management.

raise CAFE.

move the big 3 into cleaner more eff vehicles.

branch out into wind turbines.

Stop wasting money on the gambling bankers!

Arrest Paulson.

[dukeitout]

I'm convinced we can't let GM file for bancruptcy. It would be disastrous to their suppliers and customers. The government should essentially nationalize GM, TEMPORARILY (meaning from 1 month to 50 years, whatever it takes), and provide the support to keep them in business.
A government (taxpayer) infusion of money would consist of low rate loans
The company structure would remain similar to what it is today
GM would be told what cars to build (maybe smaller and/or "greener" cars and military vihicles)
Labor rates would be dictated by Uncle
Health insurance would be dictated by Uncle or
-------removed and taken over by Uncle (you know, like Japan, Germany, and Korea, et al

[KillTheMessenger]

You are wrong. Unless, of course, your plan is to pile cash on a heap and set it ablaze. In that case nationalizing GM is a great plan.

[darthdarcy]

We as a nation are at a point where Nationalization is the only thing that will in the long run save many of our industries, those which are either essential or vital national assets..!

Auto...

Airlines..­.

Energy all major Energy, Electricity and Oil and especially a National power grid for transfer of power from Solar and Wind...

Also we must Nationalize and revive our Steel Industry..­!

[Peter007]

We need more tax dollars!
. If it moves TAX it !
If it keeps moving....­regulate it. !
If it stops moving....­..National­ize it.

[research]

if it's a gambling banker , give them trillions.

[Mykel]

Um, cars are neither "vital" nor "essential­."

All the modern, high rise, cosmopoliltan cities of the modern era existed in virtually the same exact form during the early 20th century and they did so without the benefit of automobiles.

The answer isn't bailouts for dinosaur auto companies and the immense, planet-wide harm their product causes.

The answer is ending suburbia and auto-dependency and building upon our existing high rise, densely populated, walkable, mass transit-rich cities.

Trust me. Our great-great-great grandchildren will LOVE us for it and they will be FAR better off.

[BuckeyeGal]

Oh bull. People used horse and buggy. Autos replaced them, remember?

[senorlou]

You've got some excellent points here. Someone pointed out that the auto and tire companies bought out rail and trolley lines in places like Los Angeles and I'm sure many other places. Yeah, I love cars too, but they sure are making the environment and the economy a disaster. I'd rather spend all the money I am spending on car payments, etc on something else.

[smoore2614]

I agree to a certain point. The government could take it over but not run it. My question is, could they take it over and set up a entity that only manages this? Keep government out but monitor. I like senorlou's idea in modeling it like Japan. But the main thing, out of all of this is we have to keep these people working.

Healthcare seems to be an issue with overhead cost. So why not try the universal healthcare system on this government owned company. See if it cut the healthcare cost and overhead to the company.

I would love for this to work and see a profit that we can put back into the future instead of having my children still trying to pay off the dedt.

[Peter007]

Auto demand is down this year to historic lows. Demand is expected to be low for the next few years. Detroit has excess capacity. If the big 3 go bankrupt, reorganization will allow a smaller more efficient auto maker to emerge. In the mean time we have cars being built in places like Tennessee and South Carolina. There are plenty of cars available to buy. Auto workers could move to southern states and thus save on the expensive heating bills they now have in Michigan. Maybe an investment group will buy some of the old plants and make a new electric car. Who knows? . Have the Federal Government buy up all that useless land in Michigan and turn it into National Forest or Parkland. Its too cold up there. Use it for a vacation land.

[Toby Barlow - Huffpost Blogger]

If the big three go bankrupt, that "reoganization" you speak of will include suppliers going bankrupt. These are the same suppliers that work with the plants down in Tennessee and South Carolina. With their supplier base gone, these foreign manufacturers will have every reason to leave (since they are largely here for political reasons anyway) and thusly the non-union manufacturing jobs will disappear along with the union manufacturing jobs.

As for Michigan, it is a natural ecosystem that's almost perfect. People supporting a green way of life should be flocking here. California, Nevada, Arizona are environmental disasters, with water resources being stripped bare. Meanwhile, down South you can't work outside in the summers without killing yourself from heat stroke. Give me a Michigan January over a Florida August any year.

Finally, as for expensive heating bills, let's not forget the environmental impact of air conditioning, without which the south wouldn't be livable. Almost one kilowatt-hour of electricity out of every five consumed in the United States in a full year goes to cooling buildings. That's a lot of greenhouse gasses supporting an unsustainable way of life.

[Peter007]

I think the auto bailout is a done deal. All these committee meetings are pure theater. After Congress grants the loan, they have to worry about what will happen in 1 or 3 years if the car companies have to come back. with their hands out again. Voters will look at Congress first and the auto executives second when the companies don't turn a profit. Congress is looking for a way to create a Cover your As%#. excuse if that happens.

[senorlou]

Poor Toby. Too bad the green revolution will probably be starting in Silicon Valley in the "environmental disaster" called California. It's OK. You'll get used to the beautiful winters here, I promise! Start packing!

[JohnPaulJones]

I couldn't disagree with this post more. These Big Three need to file for bankruptcy or go out of business. It is absolutely absurd to think the American Taxpayer should fund the continued existence of these dinosaurs. This entire bailout is a joke. Citigroup and AIG should have been allowed to fail as well. The one thing, no one and I mean NO ONE is talking about, is how is this all going to be paid for. I've read some esitmates that the true cost is closed to $5 trillion. Now where is this money coming from? Is there going to be a new "Bailout Tax" to pay come April? Will it automatically be deducted from every paycheck ala Social Security? How will the dividends be paid on the taxpayer's investment in AIG? Will we have to pay taxes on this dividend?

[Peter007]

5 Trillion dollars is not being paid out. Thats the amount that is "pledged" or at risk. There are CDO's or other financial instruments that have a face value of 100 but are now marked down to zero. The government is pledging that these instruments have some value. Maybe 25 cents. I don't know. The truth is that most of the CDO's and CDO's may be worth up to 95 cents on the dollar in the long run. Its like the FDIC guaranteeing your $100,000 in the bank. Its not being paid out but its at risk. If the whole county goes down into depression 5 trillion will have to be printed. If we don't go into depression, most, if not all, the money will be saved.

[BuckeyeGal]

The other thing no one is talking about is that all these people will be applying for unemployment benefits. States are already strapped for cash, and didn't Congress just vote to extend UE benefits? Who is paying for that? And how much more will be required if several million are added to the rolls?

[1440minutes]

Folks, all this government intervention will kill the economy. You don't fix capitalism with socialism.

Who cares what mode of transportation these clowns take? No one's business but theirs and their shareholders. Let them all go bankrupt: big three automakers, Citigroup, all of them. Let more vibrant industries rise from the ashes. Sure, the recession will be extremely painful, but socialist interventions will exacerbate the problem.

[pcplz]

Strangely enough....­..I agree with you. All parties here are to blame. The CEO's and the unions. Poor decisions and greed have led the way on both sides.

When disputes rose, the workers left 'gifts' in the autos they made. I had one with a coke can in the door. Other gifts were little things like leaving an integral bolt or part off.

The CEO's made the decisions to make the cars as cheaply as possible and sell as high. We all know that American quality control means that the quality is controlled so that you need to repurchase a new car every 3 years....t­hat is all the longer they last.

It has been war between workers and management, much to the consumer's loss for many years. We went elsewhere.­....Japan, Germany, etc. This war has been driven by greed on both sides.

Let them go. Start up new and better industries. Let the people who take pride in their work be paid for it. Maybe the new name to take over should be 'Phoenix".

I am against bailing out stupidity and greed.

[BuckeyeGal]

You are so full of it. I drive a 99 Taurus. I guess if you don't change the oil for three years, sure you're gonna have problems.

[JackWOrf]

The IDIOCY of the government is reflected in this LUDICROUS obsession about how "extravagant" it is to allow CEO's to use corporate jets. This is INSANELY STUPID. There are currently 11,000 American companies who use corporate jets.

Corporate jets might appear to cost somewhat more to use, but when you factor in other costs, corporate jets are ENORMOUSLY COST EFFICIENT and well worth the money. Consider: The CEO of almost ANY Fortune 500 company makes about $10 million a year. That translates to an hourly wage of $5,000 per HOUR.

So, how cost efficient is it to have the CEO's of the Big 3 driving their hybrids from Detroit to Washington, D.C.?

Some advantages of corporate jets: Reduces waste of upper-level executives' time. Wastes less money when you factor in their huge hourly salaries. Enables executives to travel anywhere in the world on almost a moment's notice. Necessary in global corporations. Enables execs to travel when no flights are scheduled. Allows execs to travel direct when the airlines only offer flights with 1 or 2 stop-overs. Top execs can have confidential meetings in-flight. Execs can shower & sleep on the plane. Saves time & money. When used across the entire corporation, a corporate jet might even save money over airfare. Execs can use their laptops and cell-phones in-flight. Better use of a rare resource.

[new logic]

JWO
spoken like a true lobbyist for the existing auto industry

[Peter007]

The corporate Jet story is just that. A story for the news. The reality is that the bailout for the car companies is a done deal. The act before Congress is all theater. Democrats are in control of Congress and the Whitehouse. Democrats owe labor for support. Obama Owes Michigan for voting for him. Theater, show time. Show the American people that Congress is responsible.

[senorlou]

Sorry Peter, but all is not well. This is not some show. The US government is basically tapped out and spiraling into out of control deficit spending. The Democrats, who are not in the WH just yet, now have the joy of trying to do some damage control to the gargantuan Republican created mess. This is not some little play being put on by government bureaucrats. This is about 3,000,000 jobs on the line. The government may not be able to save them. No BS. This Depression we're about to enter is a little beyond what government may be able to fix. No fairy godmother this time. Lots of us are about to get bloody.

[Agent420]

Cut their salaries by a factor of about 30 and then how efficient is it? It is about CEOs and other management salaries. These and other companies can do much better with top management lopped off than they can with the bottom lopped off. Just see how long a company can stay in business without the janitors.

[Agent420]

And we need to kill the idea that government salaries have to be high to attract the good people. That is a steaming pile of bovine excrement. Advertise those positions at $20 bucks an hour and see if you don't get qualified applicants. No contract with golden parachutes. Fire everyone who claims to be a Human Resource person. Common sense is needed much more than degrees to run a company.
I worked for Atari when they were engineering driven, then in came "Professional Management" when Warner Bros. bought it. The company turned on a dime from active to reactive. No longer were we putting out the products that lead the video game market. Others would put out a product and we would have to counter it. Then marketing started overselling the product. When the end came, Atari had over 75 active Vice Presidents and over 200 on the "Beach Club." The Beach Club is where you are out on the beach at some resort and a waiter walks up to you and hands you your paycheck.
I could tell you stories about working at Atari that would make you laugh and others the would raise the hair on the back of your neck.
Management needs to get off their butts and do some work.

[new logic]

"The biggest advantage of buying the companies is that it would enable the public to exert control over the companies commensurate with its investment. There would be no need to negotiate with management, or carefully monitor managerial actions, to review 9-point plans for viability, or create incentives to have them invest in fuel-efficient technology. It would make it possible to undertake long-term, transformative investments in R&D and new transportation technologies, irrespective of today's oil price."
IMO this is the most rational answer to the problem...­we have the technology for the electric car, the workers could be retrained during the retooling process and we the people will not only have tangible product for our investment but begin the "green auto revolution".
America should have a "people's Car",IMO the people will set a standard with this "people's Car", and the privately owned auto industry will have to compete with the quality and cost

[Peter007]

Yes yes, I loved the Volkswagen Beetle. It was great. der Fuhrer did have a good idea.

[CarolinaDem]

Trouble with American business is that it's American in its concept of what business is about. Since it's about making money rather than organizing for the supply of society's needs, it's all about fooling the customer. Profit is not a function of pricing realities, it's all about deception, legal fraud, misrepresentation, psychological manipulation and pressure sales. Especially in the auto industry. You know any auto dealers you'd want your daughter to marry?

[JackWOrf]

My objection to the nationalization of GM is simply that government is TOO STUPID to run it. With all of the propaganda that american automakers produce junk, this is not supported in fact. American cars are competitive. They would not be threatened by mass-bankruptcy at this point if it were not for the economy.

If government were to run GM, what would they produce? The Yugo? Or maybe an electric version of the Yugo that NOBODY wanted to buy?

Guess what? The reason that no automakers in the whole world have seriously manufactured electric cars is simply that they are not currently marketable. Nobody wants to buy them. Government doesn't understand marketing and sales. Government thinks that they can force everything down everyones' throats.

[CarolinaDem]

idee fixe

[new logic]

JackWO
this is a nation with a vast amount of artistic and scientific talent, the government is made up of Americans, we are not a "Stupid" nation, we have been misled by a government controlled by the military-industrial complex, big oil,ect. The Nationalized Auto company would employ the most qualified management, designers and marketing personel to guide the company's growth

[tre]

You mean the same Government that ran Freddie Mac and Fannie Mae into the ground, that bankrupted Social inSecurity, and SAYS it'll only spend $70 million on a new Visitors Center, only to see it spiral up to $600 million, will run GM better?

[Agent420]

Competitive? Sixty percent of cars sold today are produced by foreign owners. Cheap American cars are in some cases built by foreign owned companies, but no matter who builds them cheap American cars look cheap and perform crappy.
Look what the American companies are building; Hummers, junk; SUVs, junk; Minivans, junk; Crossovers, what the h e l l is that? Some kind of bi car? Is it Metrosexual, junk? I don't know, but I know it is junk.
What Americans do not understand is that every dollar that is spent on something produced in another country is money leaving the United States and may never return unless we sell them something.

[Peter007]

Many foreign cars sold here are produced here. Many domestic cars sold here have most of their parts produced in foreign countries. Sometimes domestic and foreign car makers have joint ventures together. Its all mixed up. We may not be getting an honest picture of what is going on...

[Sundialsvc4]

With all due respect to you, Robert, I seriously disagree with you on just about all of these points.

(1) "Nationalizing heavy-industry" does not work. We already know that from Russia.

(2) It isn't the business of government to be a business. The government that governs 305 million people is not a substitute for those 305 million people and must never be the determinant of what they can do nor of how they can be employed.

(3) You hit the nail squarely on the head when you said that "de-indust­rializatio­n" has decimated many regions of this country, and ALSO when you said that "they're making quite-good wages 'over there.'"

(4) The accountants were dead-wrong. You can't substitute "mountains of borrowed leprechaun money" for "real domestic employment­." Industries are surrounded by other industries that supply them.

(5) "It's all still here." Mothballed, yes, but still here. We won't start to try using it, though, as long as the "easy money leprechaun" is still what we keep listening to.

"We Can Do It!" Rosie was right. (So was Ike.)

[Agent420]

1. You don't know that it doesn't work. Nationalized heavy industry is probably not what brought down the U.S.S.R.

2. Why shouldn't government be in business? We could use the profit to pay off the national debt. Some people might call a trade surplus a profit and it is. The thing to jump on, and Obama is right on this, is green products. There is no reason that we cannot displace Germany as the worlds biggest consumer of solar panels. I invite everyone to examine the German plan for solar energy and how they designed the plan so that *everyone* that participates in the program is going to make a profit.

The rest of your post I agree with.

[jsarets]

I'm not a big supporter of state ownership of production, but that's not what brought down the Soviet Union. The lack of an effective price mechanism for matching production to consumption is the primary structural problem of that economic model, and it did take a fair bit of coordinated manipulation of the global petroleum markets to stress the system enough to cause the collapse.

There is an alternative to market capital or social state ownership of production (both of which lead to tyranny): private collective ownership of production by the workers who produced it. In this model, consumptive property is private so long as it is possessed, productive property is private so long as it is shared exclusively among workers, and capital/land is private so long as it is leased. The state only owns a controlling stake in unleased capital/land and the national credit unions that release it to consumers and producers and use the proceeds to issue new capital and pay dividends to depositors' national share accounts.

This scheme is variously called libertarian socialism, mutualism, social anarchy, or Proudhonism, after the French radical Pierre-Joseph Proudhon, a contemporary of Karl Marx who spent much of his life strenuously opposing Marx's positions in favor of state ownership and against democracy. He believe that worker-owned cooperatives and depositor-owned credit unions could proliferate and grow organically alongside the prevailing economic order and that participatory democracy could produce a non-violent social revolution in slow motion.