Social democracy is a social,

economic An economy is an area of the Production (economics), production, Distribution (economics), distribution and trade, as well as Consumption (economics), consumption of Goods (economics), goods and Service (economics), services. In general, it is ...

, and

political philosophy Political philosophy studies the theoretical and conceptual foundations of politics. It examines the nature, scope, and Political legitimacy, legitimacy of political institutions, such as State (polity), states. This field investigates different ...

within

socialism Socialism is an economic ideology, economic and political philosophy encompassing diverse Economic system, economic and social systems characterised by social ownership of the means of production, as opposed to private ownership. It describes ...

that supports

political Politics () is the set of activities that are associated with decision-making, making decisions in social group, groups, or other forms of power (social and political), power relations among individuals, such as the distribution of Social sta ...

and economic democracy and a gradualist, reformist, and democratic approach toward achieving social equality. In modern practice, social democracy has taken the form of predominantly capitalist economies, a robust welfare state, policies promoting social justice, market regulation, and a more equitable distribution of income. Social democracy maintains a commitment to representative and participatory democracy. Common aims include curbing inequality, eliminating the oppression of underprivileged groups, eradicating

poverty Poverty is a state or condition in which an individual lacks the financial resources and essentials for a basic standard of living. Poverty can have diverse Biophysical environmen ...

, and upholding universally accessible public services such as child care,

education Education is the transmission of knowledge and skills and the development of character traits. Formal education occurs within a structured institutional framework, such as public schools, following a curriculum. Non-formal education als ...

, elderly care,

health care Health care, or healthcare, is the improvement or maintenance of health via the preventive healthcare, prevention, diagnosis, therapy, treatment, wikt:amelioration, amelioration or cure of disease, illness, injury, and other disability, physic ...

, and workers' compensation. Economically, it supports income redistribution and regulating the economy in the public interest. Social democracy has a strong, long-standing connection with trade unions and the broader labour movement. It is supportive of measures to foster greater democratic decision-making in the economic sphere, including collective bargaining and co-determination rights for workers. The history of social democracy stretches back to the 19th-century labour movement. Originally a catch-all term for socialists of varying tendencies, after the Russian Revolution, it came to refer to reformist socialists who were strategically opposed to revolution as well as the authoritarianism of the

Soviet The Union of Soviet Socialist Republics. (USSR), commonly known as the Soviet Union, was a List of former transcontinental countries#Since 1700, transcontinental country that spanned much of Eurasia from 1922 until Dissolution of the Soviet ...

model, nonetheless the eventual abolition of capitalism was still being upheld as an important end goal during this time. However, by the 1990s social democrats had embraced mixed economies with a predominance of private property and promoted the regulation of capitalism over its replacement with a qualitatively different socialist economic system. Since that time, social democracy has been associated with

Keynesian economics Keynesian economics ( ; sometimes Keynesianism, named after British economist John Maynard Keynes) are the various macroeconomics, macroeconomic theories and Economic model, models of how aggregate demand (total spending in the economy) strongl ...

, the Nordic model, and welfare states. Social democracy has been described as the most common form of Western or modern socialism. Amongst social democrats, attitudes towards socialism vary: some retain socialism as a long-term goal, with social democracy being a

and economic democracy supporting a gradualist, reformist, and democratic approach towards achieving socialism. Others view it as an ethical ideal to guide reforms within capitalism. One way modern social democracy can be distinguished from

democratic socialism Democratic socialism is a left-wing economic ideology, economic and political philosophy that supports political democracy and some form of a socially owned economy, with a particular emphasis on economic democracy, workplace democracy, and wor ...

is that social democracy aims to strike a balance by advocating for a mixed market economy where capitalism is regulated to address inequalities through social welfare programs and supports private ownership with a strong emphasis on a well-regulated market. In contrast, democratic socialism places greater emphasis on abolishing private property ownership in favor of full economic democracy by means of

cooperative A cooperative (also known as co-operative, coöperative, co-op, or coop) is "an autonomy, autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned a ...

, decentralized, or centralized planning systems. Nevertheless, the distinction remains blurred in colloquial settings, and the two terms are commonly used synonymously. The

Third Way The Third Way is a predominantly centrist political position that attempts to reconcile centre-right and centre-left politics by advocating a varying synthesis of Right-wing economics, right-wing economic and Left-wing politics, left-wing so ...

is an offshoot of social democracy which aims to fuse economic liberalism with social democratic economic policies and center-left social policies. It is a reconceptualization of social democracy developed in the 1990s and is embraced by some social democratic parties; some analysts have characterized the Third Way as part of the

neoliberal Neoliberalism is a political and economic ideology that advocates for free-market capitalism, which became dominant in policy-making from the late 20th century onward. The term has multiple, competing definitions, and is most often used pej ...

movement.

Definitions

As a tradition of socialism

Social democracy is defined as one of many socialist traditions. As an international

political movement A political movement is a collective attempt by a group of people to change government policy or social values. Political movements are usually in opposition to an element of the status quo, and are often associated with a certain ideology. Some t ...

and

ideology An ideology is a set of beliefs or values attributed to a person or group of persons, especially those held for reasons that are not purely about belief in certain knowledge, in which "practical elements are as prominent as theoretical ones". Form ...

, it aims to achieve socialism through gradual and democratic means. This definition goes back to the influence of both the reformist socialism of Ferdinand Lassalle and the internationalist

revolutionary socialism Revolutionary socialism is a political philosophy, doctrine, and tradition within socialism that stresses the idea that a social revolution is necessary to bring about structural changes in society. More specifically, it is the view that revo ...

advanced by Karl Marx and

Friedrich Engels Friedrich Engels ( ;"Engels"
''Random House Webster's Unabridged Dictionary''.anarchism. In one of the first scholarly works on European socialism written for an American audience, Richard T. Ely's 1883 book ''French and German Socialism in Modern Times'', social democrats were characterized as "the extreme wing of the socialists" who were "inclined to lay so much stress on equality of enjoyment, regardless of the value of one's labor, that they might, perhaps, more properly be called communists". In the early 20th century, social democracy came to refer to support for a process of developing society through existing political structures and opposition to revolutionary means, which are often associated with Marxism. Thus whereas in the 19th century, social democracy could be described as "organized Marxism", it became "organized reformism" by the 20th century. In political science, ''democratic socialism'' and ''social democracy'' are sometimes seen as synonyms, while they are distinguished in journalistic use. Under this democratic socialist definition, social democracy is an ideology seeking to gradually build an alternative socialist economy through the institutions of liberal democracy. Starting in the post-war period, social democracy was defined as a policy regime advocating the reformation of capitalism to align it with the ethical ideals of social justice. What socialists such as anarchists, communists, social democrats, syndicalists, and some social democratic proponents of the

share in common is history, specifically that they can all be traced back to the individuals, groups, and literature of the First International, and have retained some of the terminology and symbolism such as the colour red. How far society should intervene and whether the government, mainly the existing government, is the right vehicle for change are issues of disagreement. As the ''Historical Dictionary of Socialism'' summarizes, "there were general criticisms about the social effects of the private ownership and control of capital", "a general view that the solution to these problems lay in some form of collective control (with the degree of control varying among the proponents of socialism) over the means of production, distribution, and exchange", and "there was agreement that the outcomes of this collective control should be a society that provided social equality and justice, economic protection, and generally a more satisfying life for most people". ''Socialism'' became a catch-all term for the critics of capitalism and industrial society. Social democrats are anticapitalists insofar as criticism about "poverty, low wages, unemployment, economic and social inequality, and a lack of economic security" is linked to the private ownership of the means of production. ''Social democracy'' or ''social democratic'' remains controversial among socialists. Some define it as representing a

Marxist Marxism is a political philosophy and method of socioeconomic analysis. It uses a dialectical and materialist interpretation of historical development, better known as historical materialism, to analyse class relations, social conflic ...

faction and non-communist socialists or the ''right-wing'' of socialism during the split with

communism Communism () is a political sociology, sociopolitical, political philosophy, philosophical, and economic ideology, economic ideology within the history of socialism, socialist movement, whose goal is the creation of a communist society, a ...

. Others have noted its pejorative use among communists and other socialists. According to Lyman Tower Sargent, "''socialism'' refers to ''social'' theories rather than to theories oriented to the individual. Because many communists now call themselves ''democratic socialists'', it is sometimes difficult to know what a political label really means. As a result, ''social democratic'' has become a common new label for democratic socialist political parties."

As a policy regime

As a policy regime, social democracy entails support for a mixed economy and ameliorative measures to benefit the working class within the framework of democratic capitalism. Social democracy currently depicts a chiefly capitalist economy with state economic regulation in the general interest, state provision of welfare services and state redistribution of income and wealth. Social democratic concepts influence the policies of most Western states since World War 2. Social democracy is frequently considered a practical middle course between capitalism and socialism. Social democracy aims to use democratic collective action for promoting freedom and equality in the economy and opposes what is seen as inequality and oppression that laissez-faire capitalism causes. In the 21st century, it has become commonplace to define social democracy in reference to Northern and Western European countries, and their model of a welfare state with a corporatist system of collective bargaining. Social democracy has also been used synonymously with the Nordic model. Henning Meyer and Jonathan Rutherford associate social democracy with the socioeconomic order in Europe from the post-war period until the early 1990s. Social democratic roots are also observed in Latin America during the early 20th century; this was the case in Uruguay during the two presidential terms of José Batlle y Ordóñez. While the welfare state has been accepted across the political spectrum, particularly by conservatives ( Christian democrats) and liberals ( social liberals), one notable difference is that socialists see the welfare state "not merely to provide benefits but to build the foundation for emancipation and self-determination". In the 21st century, a social democratic policy regime may further be distinguished by a support for an increase in welfare policies or an increase in public services. Some distinguish between ideological social democracy as part of the broad socialist movement and social democracy as a policy regime. They call the first ''classical social democracy'' or ''classical socialism'', and the latter as ''competitive socialism'', ''liberal socialism'', ''neo-social democracy'', or ''new social democracy''.

As a name for political parties

Many socialist parties in several countries have been, or are called ''Social Democratic''. In the 19th century, ''social democrat'' was a broad catch-all for international socialists owing their primary ideological allegiance to Lassalle or Marx, in contrast to those advocating various forms of

utopian socialism Utopian socialism is the term often used to describe the first current of modern socialism and socialist thought as exemplified by the work of Henri de Saint-Simon, Charles Fourier, Étienne Cabet, and Robert Owen. Utopian socialism is often de ...

. Many parties in this era described themselves as ''Social Democrats'', including the General German Workers' Association and the Social Democratic Workers' Party of Germany, which merged to form the Social Democratic Party of Germany, the Social Democratic Federation in Britain, and the Russian Social Democratic Labour Party. ''Social Democrat'' continued to be used in this context until the Bolshevik Revolution of October 1917, when ''Communist'' came into vogue for individuals and organizations espousing a revolutionary road to socialism. In the 20th century, the term came to be associated with the positions of the German and Swedish parties. The first advocated revisionist Marxism, while the second advocated a comprehensive welfare state. By the 21st century, parties advocating social democracy include Labour, Left, and some Green parties. Most social democratic parties consider themselves democratic socialists and are categorized as socialists. They continue to reference socialism, either as a post-capitalist order or, in more ethical terms, as a just society, described as representing democratic socialism, without any explicit reference to the economic system or its structure. Parties such as the Social Democratic Party of Germany and the Swedish Social Democratic Party describe their goal as developing democratic socialism, with social democracy as the principle of action. In the 21st century, European social democratic parties represent the centre-left and most are part of the Party of European Socialists, while democratic socialist parties are to their left within the Party of the European Left. Many of those social democratic parties are members of the

Socialist International The Socialist International (SI) is a political international or worldwide organisation of political parties which seek to establish democratic socialism, consisting mostly of Social democracy, social democratic political parties and Labour mov ...

, including several democratic socialist parties, whose Frankfurt Declaration declares the goal of developing democratic socialism. Others are also part of the Progressive Alliance, founded in 2013 by most contemporary or former member parties of the Socialist International.

As Marxist revisionism

Social democracy has been seen as a revision of

orthodox Marxism Orthodox Marxism is the body of Marxist thought which emerged after the deaths of Karl Marx and Friedrich Engels in the late 19th century, expressed in its primary form by Karl Kautsky. Kautsky's views of Marxism dominated the European Marxis ...

, although this has been described as misleading for modern social democracy. Marxist revisionist

Eduard Bernstein Eduard Bernstein (; 6 January 1850 – 18 December 1932) was a German Marxist theorist and politician. A prominent member of the Social Democratic Party of Germany (SPD), he has been both condemned and praised as a "Revisionism (Marxism), revisi ...

's views influenced and laid the groundwork for developing post-war social democracy as a policy regime, Labour revisionism, and the neo-revisionism of the

. This definition of social democracy is focused on ethical terms, with the type of socialism advocated being

ethical Ethics is the philosophical study of moral phenomena. Also called moral philosophy, it investigates normative questions about what people ought to do or which behavior is morally right. Its main branches include normative ethics, applied e ...

and liberal. Bernstein described socialism and social democracy in particular as organized liberalism; in this sense, liberalism is the predecessor and precursor of socialism, whose restricted view of

freedom Freedom is the power or right to speak, act, and change as one wants without hindrance or restraint. Freedom is often associated with liberty and autonomy in the sense of "giving oneself one's own laws". In one definition, something is "free" i ...

is to be socialized, while democracy must entail social democracy. For those social democrats, who still describe and see themselves as socialists, ''socialism'' is used in ethical or moral terms, representing democracy, egalitarianism, and social justice rather than a specifically socialist economic system. Under this type of definition, social democracy's goal is that of advancing those values within a capitalist market economy, as its support for a mixed economy no longer denotes the coexistence between private and public ownership or that between planning and market mechanisms but rather, it represents free markets combined with government intervention and regulations.

Philosophy

As a form of reformist

, social democracy rejects the either/or interpretation of capitalism versus socialism. It claims that fostering a progressive evolution of capitalism will gradually result in the evolution of a capitalist economy into a socialist economy. All citizens should be legally entitled to certain social rights: universal access to public services such as education, health care, workers' compensation, and other services, including child care and care for the elderly. Social democrats advocate freedom from discrimination based on differences in ability/disability, age,

ethnicity An ethnicity or ethnic group is a group of people with shared attributes, which they Collective consciousness, collectively believe to have, and long-term endogamy. Ethnicities share attributes like language, culture, common sets of ancestry, ...

gender Gender is the range of social, psychological, cultural, and behavioral aspects of being a man (or boy), woman (or girl), or third gender. Although gender often corresponds to sex, a transgender person may identify with a gender other tha ...

, language, race, religion, sexual orientation, and social class. Arbeiterbew

Later in their lives, Karl Marx and

Friedrich Engels Friedrich Engels ( ;"Engels"
''Random House Webster's Unabridged Dictionary''.social revolution. In developing social democracy,

rejected

's revolutionary and materialist foundations. Rather than class conflict and socialist revolution, Bernstein's Marxist revisionism reflected that socialism could be achieved through cooperation between people regardless of class. Nonetheless, Bernstein paid deference to Marx, describing him as the father of social democracy but declaring that it was necessary to revise Marx's thought in light of changing conditions. Influenced by the gradualist platform favoured by the Fabian movement in Britain, Bernstein advocated a similar evolutionary approach to socialist politics that he termed ''evolutionary socialism''. Evolutionary means include representative democracy and cooperation between people regardless of class. Bernstein accepted the Marxist analysis that the creation of socialism is interconnected with the evolution of capitalism. August Bebel, Bernstein, Engels, Wilhelm Liebknecht, Marx, and Carl Wilhelm Tölcke are all considered founders of social democracy in Germany. However, Bernstein and Lassalle, along with labourists and reformists such as Louis Blanc in France, led to the widespread association of social democracy with socialist reformism. While Lassalle was a reformist state socialist, Bernstein predicted a long-term coexistence of democracy with a mixed economy during the reforming of capitalism into socialism and argued that socialists needed to accept this. This mixed economy would involve

public In public relations and communication science, publics are groups of individual people, and the public (a.k.a. the general public) is the totality of such groupings. This is a different concept to the sociology, sociological concept of the ''Öf ...

, and

private enterprise A privately held company (or simply a private company) is a company whose Stock, shares and related rights or obligations are not offered for public subscription or publicly negotiated in their respective listed markets. Instead, the Private equi ...

s, and it would be necessary for an extended period before private enterprises evolve of their own accord into cooperative enterprises. Bernstein supported state ownership only for certain parts of the economy that the state could best manage and rejected a mass scale of state ownership as being too burdensome to be manageable. Bernstein was an advocate of Kantian socialism and neo-Kantianism. Although unpopular early on, his views became mainstream after World War I. In ''

The Future of Socialism ''The Future of Socialism'' is a 1956 book by Anthony Crosland. It was one of the most influential books in post-war British Labour Party (UK), Labour Party thinking. It was the seminal work of the 'revisionist' school of Labour politics. The boo ...

'' (1956),

Anthony Crosland Charles Anthony Raven Crosland (29 August 191819 February 1977) was a British Labour Party (UK), Labour Party politician and author. A social democrat on the right wing of the Labour Party, he was a prominent socialist intellectual. His influe ...

argued that "traditional capitalism has been reformed and modified almost out of existence, and it is with a quite different form of society that socialists must now concern themselves. Pre-war anti-capitalism will give us very little help", for a new kind of capitalism required a new kind of socialism. Crosland believed that these features of reformed managerial capitalism were irreversible, but it has been argued within the Labour Party and by others that

Margaret Thatcher Margaret Hilda Thatcher, Baroness Thatcher (; 13 October 19258 April 2013), was a British stateswoman who served as Prime Minister of the United Kingdom from 1979 to 1990 and Leader of the Conservative Party (UK), Leader of th ...

and

Ronald Reagan Ronald Wilson Reagan (February 6, 1911 – June 5, 2004) was an American politician and actor who served as the 40th president of the United States from 1981 to 1989. He was a member of the Republican Party (United States), Republican Party a ...

brought about its reversal in the 1970s and 1980s. Although the post-war consensus represented a period where social democracy was "most buoyant", it has been argued that "post-war social democracy had been altogether too confident in its analysis" because "gains which were thought to be permanent turned out to be conditional and as the reservoir of capitalist growth showed signs of drying up". In ''Socialism Now'' (1974), Crosland argued that " ch more should have been achieved by a Labour Government in office and Labour pressure in opposition. Against the dogged resistance to change, we should have pitted a stronger will to change. I conclude that a move to the Left is needed". In ''Origin, Ideology and Transformation of Political Parties: East-Central and Western Europe Compared'', Vít Hloušek and Lubomír Kopecek explain how socialist parties have evolved from the 19th to the early 21st centuries. As the number of people in traditional working-class occupations such as factory workers and miners declined, socialists have successfully widened their appeal to the middle class by diluting their ideology; however, there is still continuity between parties such as the SPD, the Labour Party in Britain, and other socialist parties which remain part of the same ''famille spirituelle'', or ideological party family, as outlined by most political scientists. For many social democrats,

Marxism Marxism is a political philosophy and method of socioeconomic analysis. It uses a dialectical and materialist interpretation of historical development, better known as historical materialism, to analyse class relations, social conflict, ...

is loosely held to be valuable for its emphasis on changing the world for a more just, better future.

History

During the late 19th century and the early 20th century, social democracy was a broad labour movement within socialism that aimed to replace private ownership with social ownership of the means of production, distribution and exchange, taking influence from both

and the supporters of Ferdinand Lassalle. By 1868–1869, the socialism associated with Karl Marx had become the official theoretical basis of the first social democratic party established in Europe, the Social Democratic Workers' Party of Germany. In the early 20th century, the German social democratic politician

rejected orthodox Marxist ideas about the inevitable progression of history and the need for revolution, advancing instead the position that socialism should be grounded in ethical and moral arguments and achieved through gradual legislative reform. Bernstein's ideas were initially not well received; his party maintained the position that reforms should be pursued only as a means to an eventual revolution, not as a substitute for it. Yet, Bernstein's ideas would have growing influence, particularly after the First World War. The Russian Revolution was a pivotal moment that furthered the division between reformists and revolutionary socialists. Those supporting the October Revolution renamed themselves as ''Communists'' while those opposing the Bolsheviks retained the ''Social Democrat'' label. While both groups technically shared the goal of a communist society that fully realized the principle of " from each according to his ability, to each according to his need", the Communists sought to distance themselves from to ''Social Democracy'''s association with reformism. The Communists also sought to distinguish themselves from the socialists that had supported the imperialist Great War and thus betrayed proletarian internationalism. This reformist–revolutionary division culminated in the German Revolution of 1919, in which the Communists wanted to overthrow the German government and establish a soviet republic like Russia, while the Social Democrats wanted to preserve it as what came to be known as the Weimar Republic. Thus social democracy went from a "Marxist revolutionary" doctrine into a form of "moderate parliamentary socialism". The

Bolsheviks The Bolsheviks, led by Vladimir Lenin, were a radical Faction (political), faction of the Marxist Russian Social Democratic Labour Party (RSDLP) which split with the Mensheviks at the 2nd Congress of the Russian Social Democratic Labour Party, ...

split from the Second International and created their own separate Communist International (Comintern) in 1919 that sought to rally revolutionary social democrats together for socialist revolution. With this split, the reformists founded the

Labour and Socialist International The Labour and Socialist International (LSI) was an international organization of socialist and labourist parties, active between 1923 and 1940. The group was established through a merger of the rival Vienna International and the Berne Intern ...

(LSI) in 1923. The LSI had a history of rivalry with the Comintern, with which it competed over the leadership of the international socialist and labour movement. During the 1920s and 1930s, social democracy became dominant in the socialist movement, mainly associated with reformist socialism while

represented revolutionary socialism. Under the influence of politicians like Carlo Rosselli in Italy, social democrats began disassociating themselves from orthodox Marxism altogether as represented by

Marxism–Leninism Marxism–Leninism () is a communist ideology that became the largest faction of the History of communism, communist movement in the world in the years following the October Revolution. It was the predominant ideology of most communist gov ...

, embracing liberal socialism, Keynesianism, and appealing to morality rather than any consistent systematic,

scientific Science is a systematic discipline that builds and organises knowledge in the form of testable hypotheses and predictions about the universe. Modern science is typically divided into twoor threemajor branches: the natural sciences, which stu ...

, or materialist worldview. Social democracy appealed to communitarian, corporatist, and sometimes

nationalist Nationalism is an idea or movement that holds that the nation should be congruent with the State (polity), state. As a movement, it presupposes the existence and tends to promote the interests of a particular nation,Anthony D. Smith, Smith, A ...

sentiments while rejecting the

and technological determinism generally characteristic of orthodox Marxism and economic liberalism. By the post-

World War II World War II or the Second World War (1 September 1939 – 2 September 1945) was a World war, global conflict between two coalitions: the Allies of World War II, Allies and the Axis powers. World War II by country, Nearly all of the wo ...

period and its economic consensus and expansion, most social democrats in Europe had abandoned their ideological connection to orthodox Marxism. They shifted their emphasis toward social policy reform as a compromise between capitalism to

. According to Michael Harrington, the primary reason for this was the perspective that viewed the Stalinist-era

Soviet Union The Union of Soviet Socialist Republics. (USSR), commonly known as the Soviet Union, was a List of former transcontinental countries#Since 1700, transcontinental country that spanned much of Eurasia from 1922 until Dissolution of the Soviet ...

as having succeeded in usurping the legacy of Marxism and distorting it in propaganda to justify

totalitarianism Totalitarianism is a political system and a form of government that prohibits opposition from political parties, disregards and outlaws the political claims of individual and group opposition to the state, and completely controls the public s ...

. In its foundation, the

denounced the Bolshevik-inspired communist movement, "for tfalsely claims a share in the Socialist tradition". Furthermore, core tenets of Marxism have been regarded by social democrats as having become obsolete, including the prediction that the working class was the decisive class with the development of capitalism. In their view, this did not materialize in the aftermath of mass industrialization during World War II. In Britain, the social democratic Gaitskellites emphasized the goals of personal liberty, social welfare, and social equality. The Gaitskellites were part of a political consensus between the Labour and

Conservative Conservatism is a cultural, social, and political philosophy and ideology that seeks to promote and preserve traditional institutions, customs, and values. The central tenets of conservatism may vary in relation to the culture and civiliza ...

parties, famously dubbed Butskellism. Some social democratic Third Way figures such as Anthony Giddens and Tony Blair, who has described himself as a Christian socialist and a socialist in ethical terms, insist that they are socialists, for they claim to believe in the same values that their anti-Third Way critics do. According to those self-proclaimed social democratic modernizers, Clause IV's open advocacy of state socialism was alienating potential middle-class Labour supporters, and nationalization policies had been so thoroughly attacked by neoliberal economists and politicians, including rhetorical comparisons by the right of state-owned industry in the West to that in the Soviet Union and the Eastern Bloc, and nationalizations and state socialism became unpopular. Thatcherite Conservatives were adept at condemning

state-owned enterprise A state-owned enterprise (SOE) is a business entity created or owned by a national or local government, either through an executive order or legislation. SOEs aim to generate profit for the government, prevent private sector monopolies, provide goo ...

s as economically inefficient. For the Gaitskellites, nationalization was not essential to achieve all major socialist objectives; public ownership and nationalization were not explicitly rejected but were seen as merely one of numerous useful devices. According to social democratic modernizers like Blair, nationalization policies had become politically unviable by the 1990s. During the

development of social democracy, social democrats adjusted to the neoliberal political climate that had existed since the 1980s. Those social democrats recognized that outspoken opposition to capitalism was politically non-viable and that accepting the powers that be, seeking to challenge free-market and '' laissez-faire'' variations of capitalism, was a more immediate concern. The Third Way stands for a modernized social democracy, but the social democracy that remained committed to the gradual abolition of capitalism and social democrats opposed to the Third Way merged into democratic socialism. Although social democracy originated as a revolutionary socialist or communist movement, one distinction between democratic socialism and social democracy is that the former can include revolutionary means. The latter proposes representative democracy under the

rule of law The essence of the rule of law is that all people and institutions within a Body politic, political body are subject to the same laws. This concept is sometimes stated simply as "no one is above the law" or "all are equal before the law". Acco ...

as the only acceptable constitutional form of government. During the Great Recession, Social Democratic parties in Europe increasingly adopted

austerity In economic policy, austerity is a set of Political economy, political-economic policies that aim to reduce government budget deficits through Government spending, spending cuts, tax increases, or a combination of both. There are three prim ...

as a policy response to the economic crisis, shifting away from the traditional Keynesian response of deficit spending. According to Björn Bremer, this shift in thinking was due to the influence of supply-side economics on Social Democratic leaders and by electoral motivations whereby Social Democrats wanted to appear economically competent to voters by adopting orthodox fiscal policies.

Social democracy and democratic socialism

Social democracy has some significant overlap in practical policy positions with democratic socialism, although they are usually distinguished from each other. In Britain, the revised version of Clause IV to the Labour Party Constitution, which was implemented in the 1990s by the New Labour faction led by Tony Blair, affirms a formal commitment to democratic socialism, describing it as a modernized form of social democracy; however, it no longer commits the party to public ownership of industry and in its place advocates "the enterprise of the market and the rigour of competition" along with "high quality public services either owned by the public or accountable to them". Many social democrats "refer to themselves as socialists or democratic socialists", and some such as Blair "use or have used these terms interchangeably". Others argue that "there are clear differences between the three terms, and preferred to describe their own political beliefs by using the term 'social democracy' only". ''Democratic socialism'' represents social democracy before the 1970s, when the post-war displacement of Keynesianism by monetarism and neoliberalism caused many social democratic parties to adopt the Third Way ideology, accepting capitalism as the '' status quo'' for the time being and redefining

in a way that maintains the capitalist structure intact. Like modern social democracy, democratic socialism tends to follow a gradual or evolutionary path to socialism rather than a revolutionary one. Policies commonly supported are Keynesian and include some degree of regulation over the economy, social insurance schemes, public pension programs, and a gradual expansion of public ownership over major and strategic industries.

Internal debates

During the late 20th century, those labels were embraced, contested and rejected due to the emergence of developments within the European left, such as Eurocommunism, the rise of neoliberalism, the

fall of the Soviet Union The Soviet Union was formally dissolved as a sovereign state and subject of international law on 26 December 1991 by Declaration No. 142-N of the Soviet of Nationalities, Soviet of the Republics of the Supreme Soviet of the Soviet Union. :s: ...

and the

Revolutions of 1989 The revolutions of 1989, also known as the Fall of Communism, were a revolutionary wave of liberal democracy movements that resulted in the collapse of most Communist state, Marxist–Leninist governments in the Eastern Bloc and other parts ...

, the

, and the rise of anti-austerity and Occupy movements due to the 2008 financial crisis and the Great Recession, the causes of which have been attributed by some to the neoliberal shift and deregulation economic policies. This latest development contributed to the rise of politicians, such as

Jeremy Corbyn Jeremy Bernard Corbyn (; born 26 May 1949) is a British politician who has been Member of Parliament (United Kingdom), Member of Parliament (MP) for Islington North (UK Parliament constituency), Islington North since 1983. Now an Independent ...

in Britain and Bernie Sanders in the United States, who rejected centrist politicians that supported triangulation within the Labour and Democratic parties. According to both right-wing critics and supporters alike, policies such as universal

and

are "pure Socialism" because they are opposed to "the hedonism of capitalist society". Because of this overlap, ''democratic socialism'' refers to European socialism as represented by social democracy, especially in the United States, where it is tied to the New Deal. Some democratic socialists who follow social democracy support practical, progressive reforms of capitalism and are more concerned with administrating and humanising it, with socialism relegated to the indefinite future. Other democratic socialists want to go beyond mere meliorist reforms and advocate the systematic transformation of the mode of production from capitalism to

In the United States

Despite the long history of overlap between the two, with social democracy considered a form of democratic or parliamentary socialism and social democrats calling themselves democratic socialists, ''democratic socialism'' is considered a misnomer in the United States. One issue is that ''social democracy'' is equated with wealthy countries in the Western world, especially in Northern and Western Europe, while ''democratic socialism'' is conflated either with the pink tide in Latin America, especially with Venezuela, or with communism in the form of Marxist–Leninist socialism as practised in the Soviet Union and other self-declared socialist states. ''Democratic socialism'' has been described as representing the "left-wing" or "socialist" tradition of the New Deal. The lack of a strong and influential socialist movement in the United States has been linked to the Red Scare, and any ideology associated with socialism brings social stigma due to its association with authoritarian socialist states. ''Socialism'' has been used as a pejorative term by members of the political right to stop the implementation of liberal and progressive policies and proposals and to criticize the public figures trying to implement them. Although Americans may reject the idea that the United States has characteristics of a European-style social democracy, it has been argued by some observers that it has a comfortable social safety net, albeit severely underfunded in comparison to other Western countries. It has also been argued that many policies that may be considered socialist are popular but that socialism is not. Others, such as Tony Judt, described modern liberalism in the United States as representing European social democracy.

In South Africa

South Africa South Africa, officially the Republic of South Africa (RSA), is the Southern Africa, southernmost country in Africa. Its Provinces of South Africa, nine provinces are bounded to the south by of coastline that stretches along the Atlantic O ...

has been governed by the African National Congress (ANC), a social democratic party, since 1994. In 2022, The World Economic Forum said that South Africa risks state collapse and identified five major risks facing the country. Former minister Jay Naidoo has said that South Africa is in serious trouble and is showing signs of a failed state, with record unemployment levels and the fact that many young people will not find a job in their lifetime.

Policy regime

Social democracy rests on three fundamental features, namely: "(1) parliamentary democracy, (2) an economy partly regulated by the state, and (3) provision of social support to those in need". In practice, social democratic parties have been instrumental in the social-liberal paradigm, lasting from the 1940s and 1970s, and called such because it was developed by social liberals but implemented by social democrats. Since those policies were mostly implemented by social democrats, social liberalism is sometimes called ''social democracy''. In Britain, the social-liberal

Beveridge Report The Beveridge Report, officially entitled ''Social Insurance and Allied Services'' ( Cmd. 6404), is a government report, published in November 1942, influential in the founding of the welfare state in the United Kingdom. It was drafted by the Lib ...

drafted by the Liberal economist William Beveridge influenced the Labour Party's social policies, such as the National Health Service and Labour's welfare state development. This social-liberal paradigm represented the post-war consensus and was accepted across the political spectrum by conservatives, liberals and socialists until the 1970s. Similarly, the neoliberal paradigm, which replaced the previous paradigm, was accepted across the mainstream political parties, including social democratic supporters of the Third Way. This has caused much controversy within the social democratic movement.

Role of the state

From the late 19th century until the mid to late 20th century, there was greater public confidence in the idea of a state-managed economy that was a major pillar of communism, and to a substantial degree by conservatives and left-liberals. Aside from anarchists and other libertarian socialists, there was confidence amongst socialists in the concept of state socialism as being the most effective form of socialism. Some early British social democrats in the 19th century and 20th century, such as the Fabians, said that British society was already mostly socialist and that the economy was significantly socialist through government-run enterprises created by conservative and liberal governments which could be run for the interests of the people through their representatives' influence, an argument echoed by some socialists in post-war Britain. Advents in economics and observation of the failure of state socialism in the Eastern Bloc countries and the Western world with the crisis and stagflation of the 1970s, combined with the neoliberal rebuke of state interventionism, resulted in socialists re-evaluating and redesigning socialism. Some social democrats have sought to keep what they deem are socialism's core values while changing their position on state involvement in the economy and retaining significant social regulations. When nationalization of large industries was relatively widespread in the 20th century until the 1970s, it was not uncommon for commentators to describe some European social democracies as democratic socialist states seeking to move their countries toward a socialist economy. In 1956, leading Labour Party politician and British author

said that capitalism had been abolished in Britain, although others such as Welshman Aneurin Bevan, Minister of Health in the first post-war Labour government and the architect of the National Health Service, disputed the claim. For Crosland and others who supported his views, Britain was a socialist state. According to Bevan, Britain had a socialist National Health Service, which opposed the hedonism of Britain's capitalist society. Although, as in the rest of Europe, the laws of capitalism still operated fully and

dominated the economy, some political commentators stated that during the post-war period, when social democratic parties were in power, countries such as Britain and France were democratic socialist states. The same claim has been applied to Nordic countries with the Nordic model. In the 1980s, the government of President François Mitterrand aimed to expand dirigism and attempted to nationalize all French banks, but this attempt faced opposition from the European Economic Community because it demanded a free-market economy among its members. Public ownership never accounted for more than 15–20% of capital formation, further dropping to 8% in the 1980s and below 5% in the 1990s after the rise of neoliberalism. The collapse of the legitimacy of state socialism and Keynesian interventionism (with the discovery of the phenomenon of stagflation) has been an issue for social democracy. This has provoked re-thinking of how socialism should be achieved by social democrats, including changing views by social democrats on private property—anti-Third Way social democrats such as Robert Corfe have advocated a socialist form of private property as part of new socialism (although Corfe technically objects to '' private property'' as a term to collectively describe property that is not publicly owned as being vague) and rejecting state socialism as a failure. Third Way social democracy was formed in response to what its proponents saw as a crisis in the legitimacy of socialism—especially state socialism—and the rising legitimacy of neoliberalism, especially ''laissez-faire'' capitalism. The Third Way's view of the crisis is criticized for being too simplistic. Others have criticized it because with the fall of state socialism, it was possible for "a new kind of 'third way' socialism (combining social ownership with markets and democracy), thereby heralding a revitalization of the social democratic tradition"; however, it has been argued that the prospect of a new socialism was "a chimera, a hopeful invention of Western socialists who had not understood how ' actually existing socialism' had totally discredited ''any'' version of socialism among those who had lived under it".

Corporatism

Social democracy influenced the development of social corporatism, a form of economic tripartite corporatism based upon a social partnership between the interests of capital and labour, involving collective bargaining between representatives of employers and labour mediated by the government at the national level. During the post-war consensus, this form of social democracy has been a major component of the Nordic model and, to a lesser degree, the West European social market economies. The development of social corporatism began in Norway and

Sweden Sweden, formally the Kingdom of Sweden, is a Nordic countries, Nordic country located on the Scandinavian Peninsula in Northern Europe. It borders Norway to the west and north, and Finland to the east. At , Sweden is the largest Nordic count ...

in the 1930s and was consolidated in the 1960s and 1970s. The system was based upon the dual compromise of capital and labour as one component and the market and the state as the other. From the 1940s through the 1970s, defining features of social democracy as a policy regime included Keynesian economic policies and industrial agreements to balance the power of capital and labour and the welfare state. This is especially associated with the Swedish Social Democrats. In the 1970s, social corporatism evolved into neo-corporatism, which replaced it. Neo-corporatism has represented an important concept of Third Way social democracy. Social democratic theorist Robin Archer wrote about the importance of social corporatism to social democracy in his work ''Economic Democracy: The Politics of a Feasible Socialism'' (1995). As a welfare state, social democracy is a specific type of welfare state and policy regime described as being universalist, supportive of collective bargaining, and more supportive of public provision of welfare. It is especially associated with the Nordic model.

Analysis

Legacy

Social democratic policies were first adopted in the

German Empire The German Empire (),; ; World Book, Inc. ''The World Book dictionary, Volume 1''. World Book, Inc., 2003. p. 572. States that Deutsches Reich translates as "German Realm" and was a former official name of Germany. also referred to as Imperia ...

between the 1880s and 1890s, when the

conservative Conservatism is a cultural, social, and political philosophy and ideology that seeks to promote and preserve traditional institutions, customs, and values. The central tenets of conservatism may vary in relation to the culture and civiliza ...

Chancellor

Otto von Bismarck Otto, Prince of Bismarck, Count of Bismarck-Schönhausen, Duke of Lauenburg (; born ''Otto Eduard Leopold von Bismarck''; 1 April 1815 – 30 July 1898) was a German statesman and diplomat who oversaw the unification of Germany and served as ...

put in place many social welfare proposals initially suggested by the Social Democrats to hinder their electoral success after he instituted the Anti-Socialist Laws, laying the ground of the first modern welfare state. Those policies were dubbed State Socialism by the liberal opposition, but Bismarck later accepted and re-appropriated the term. It was a set of social programs implemented in Germany that Bismarck initiated in 1883 as remedial measures to appease the working class and reduce support for

and the Social Democrats following earlier attempts to achieve the same objective through Bismarck's Anti-Socialist Laws. This did not prevent the Social Democrats from becoming the biggest party in parliament by 1912. Similar policies were later adopted in most of Western Europe, including France and the United Kingdom (the latter in the form of the Liberal welfare reforms), with both socialist and liberal parties adopting those policies. In the United States, the progressive movement, a similar social democratic movement predominantly influenced more by social liberalism than

, supported progressive liberals such as Democratic presidents Woodrow Wilson and

Franklin D. Roosevelt Franklin Delano Roosevelt (January 30, 1882April 12, 1945), also known as FDR, was the 32nd president of the United States, serving from 1933 until his death in 1945. He is the longest-serving U.S. president, and the only one to have served ...

, whose New Freedom and New Deal programmes adopted many social democratic policies. With the

Great Depression The Great Depression was a severe global economic downturn from 1929 to 1939. The period was characterized by high rates of unemployment and poverty, drastic reductions in industrial production and international trade, and widespread bank and ...

, economic interventionism and nationalizations became more common worldwide and the post-war consensus until the 1970s saw Keynesian social democratic and mixed economy policies put in place, leading to the post-World War II boom in which the United States, the Soviet Union, the Western European, and East Asian countries experienced unusually high and sustained

economic growth In economics, economic growth is an increase in the quantity and quality of the economic goods and Service (economics), services that a society Production (economics), produces. It can be measured as the increase in the inflation-adjusted Outp ...

, together with full employment. Contrary to early predictions, this period of high economic growth and national development also included many countries that were devastated by the war, such as Japan ( Japanese post-war economic miracle), West Germany and Austria ( Wirtschaftswunder), South Korea ( Miracle of the Han River), France ( Trente Glorieuses), Italy ( Italian economic miracle), and Greece ( Greek economic miracle). With the 1970s energy crisis, the abandonment of both the

gold standard A gold standard is a backed currency, monetary system in which the standard economics, economic unit of account is based on a fixed quantity of gold. The gold standard was the basis for the international monetary system from the 1870s to the ...

and the Bretton Woods system along with Keynesian social democratic, mixed-economy policies and the implementation of market-oriented, monetarist, and

policies ( privatization, deregulation,

free trade Free trade is a trade policy that does not restrict imports or exports. In government, free trade is predominantly advocated by political parties that hold Economic liberalism, economically liberal positions, while economic nationalist politica ...

, economic globalization, and anti- inflationary

fiscal policy In economics and political science, fiscal policy is the use of government revenue collection ( taxes or tax cuts) and expenditure to influence a country's economy. The use of government revenue expenditures to influence macroeconomic variab ...

, among others), the social democratic welfare state was put in doubt. This caused several social democratic parties to adopt the

, a centrist ideology combining social democracy with neoliberalism; however, the Great Recession in the late 2000s and early 2010s cast doubts on the Washington Consensus, and protests against austerity measures ensued. There was a resurgence of social democratic parties and policies, especially in the United States and the United Kingdom, with the rise of politicians such as Bernie Sanders and

, who rejected the Third Way, after the

economic recession An economy is an area of the Production (economics), production, Distribution (economics), distribution and trade, as well as Consumption (economics), consumption of Goods (economics), goods and Service (economics), services. In general, it is ...

caused the Pasokification of many social democratic parties. The United Nations World Happiness Report shows that the happiest nations are concentrated in social democratic nations, especially in Northern Europe, where the Nordic model is applied. This is at times attributed to the success of the social democratic Nordic model in the region, where similar democratic socialist, labourist, and social democratic parties dominated the region's political scene and laid the ground for their universal welfare states in the 20th century. The Nordic countries, including Denmark, Finland, Iceland, Norway, and Sweden, as well as Greenland and the Faroe Islands, also ranks highest on the metrics of real GDP per capita, economic equality,

public health Public health is "the science and art of preventing disease, prolonging life and promoting health through the organized efforts and informed choices of society, organizations, public and private, communities and individuals". Analyzing the de ...

, life expectancy, solidarity, perceived freedom to make life choices, generosity, quality of life, and human development, while countries practising a neoliberal form of government have registered relatively poorer results. Similarly, several reports have listed Scandinavian and other social democratic countries as ranking high on indicators such as civil liberties,

democracy Democracy (from , ''dēmos'' 'people' and ''kratos'' 'rule') is a form of government in which political power is vested in the people or the population of a state. Under a minimalist definition of democracy, rulers are elected through competitiv ...

, press, labour and

freedoms, peace, and freedom from

corruption Corruption is a form of dishonesty or a criminal offense that is undertaken by a person or an organization that is entrusted in a position of authority to acquire illicit benefits or abuse power for one's gain. Corruption may involve activities ...

. Numerous studies and surveys indicate that people live happier lives in countries ruled by social democratic parties than those ruled by neoliberal, centrist, and right-wing governments.

Criticism

Other socialists criticize social democracy because it serves to devise new means to strengthen the capitalist system, which conflicts with the socialist goal of replacing capitalism with a socialist system. According to this view, social democracy fails to address the systemic issues inherent in capitalism. The American democratic socialist philosopher David Schweickart contrasts social democracy with

by defining the former as an attempt to strengthen the welfare state and the latter as an alternative economic system to capitalism. According to Schweickart, the democratic socialist critique of social democracy is that capitalism can never be sufficiently humanized and that any attempt to suppress its economic contradictions will only cause them to emerge elsewhere. He gives the example that attempts to reduce unemployment too much would result in inflation, and too much job security would erode labour discipline. In contrast to social democracy's mixed economy, democratic socialists advocate a post-capitalist economic system based on either a market economy combined with

workers' self-management Workers' self-management, also referred to as labor management and organizational self-management, is a form of organizational management based on self-directed work processes on the part of an organization's workforce. Self-managed economy, ...

or on some form of participatory, decentralized planning of the economy. Marxian socialists argue that social democratic welfare policies cannot resolve the fundamental structural issues of capitalism, such as cyclical fluctuations, exploitation, and alienation. Accordingly, social democratic programs intended to ameliorate living conditions in capitalism, such as unemployment benefits and taxation on profits, creates further contradictions by further limiting the efficiency of the capitalist system by reducing incentives for capitalists to invest in further production. The welfare state only serves to legitimize and prolong the exploitative and contradiction-laden system of capitalism to society's detriment. Critics of contemporary social democracy, such as Jonas Hinnfors, argue that when social democracy abandoned

, it also abandoned socialism and became a liberal capitalist movement, effectively making social democrats similar to non-socialist parties like the Democratic Party in the United States. Market socialism is also critical of social democratic welfare states. While one common goal of both concepts is to achieve greater social and economic equality, market socialism does so through changes in enterprise ownership and management. Social democracy attempts to do so by subsidies and taxes on privately owned enterprises to finance welfare programs. Franklin Delano Roosevelt III (grandson of United States President

) and David Belkin criticize social democracy for maintaining a property-owning capitalist class with an active interest in reversing social democratic welfare policies and a disproportionate amount of power as a class to influence government policy. The economists John Roemer and Pranab Bardhan point out that social democracy requires a strong labour movement to sustain its heavy redistribution through taxes and that it is idealistic to think such redistribution can be accomplished in other countries with weaker labour movements, noting that social democracy in Scandinavian countries has been in decline as the labour movement weakened. Some critics say social democracy abandoned socialism in the 1930s by endorsing Keynesian welfare capitalism. The democratic socialist political theorist Michael Harrington argued that social democracy historically supported Keynesianism as part of a "social democratic compromise" between capitalism and socialism. Although this compromise did not allow for the immediate creation of socialism, it created welfare states and "recognized noncapitalist, and even anticapitalist, principles of human need over and above the imperatives of profit". Social democrats in favour of the

have been accused of endorsing capitalism, including anti-Third Way social democrats who have accused Third Way proponents such as Anthony Giddens of being anti-social democratic and anti-socialist in practice. Some critics and analysts argue that many prominent social democratic parties, such as the Labour Party in Britain and the Social Democratic Party of Germany, even while maintaining references to socialism and declaring themselves democratic socialist parties, have abandoned socialism in practice, whether unwillingly or not. Social democracy's reformism has been criticized by both the left and right, on the grounds that if reformist socialists were left to govern a capitalist economy, they would have to do so according to capitalist, not socialist, logic. For example, Joseph Schumpeter writes in '' Capitalism, Socialism and Democracy'' (1942): "Socialists had to govern in an essentially capitalist world... a social and economic system that would not function except on capitalist lines.... If they were to run it, they would have to run it according to its own logic. They would have to 'administer' capitalism". Similarly, Irving Kristol argued: "Democratic socialism turns out to be an inherently unstable compound, a contradiction in terms. Every social democratic party, once in power, soon finds itself choosing, at one point after another, between the socialist society it aspires to and the liberal society that lathered it".

Joseph Stalin Joseph Vissarionovich Stalin (born Dzhugashvili; 5 March 1953) was a Soviet politician and revolutionary who led the Soviet Union from 1924 until Death and state funeral of Joseph Stalin, his death in 1953. He held power as General Secret ...

was a vocal critic of reformist social democrats, later coining the term '' social fascism'' to describe social democracy in the 1930s because, in this period, it embraced a similar corporatist economic model to the model supported by

fascism Fascism ( ) is a far-right, authoritarian, and ultranationalist political ideology and movement. It is characterized by a dictatorial leader, centralized autocracy, militarism, forcible suppression of opposition, belief in a natural social hie ...

. This view was adopted by the Communist International, which argued that capitalist society had entered the Third Period in which a proletarian revolution was imminent but could be prevented by social democrats and other fascist forces.

References

Citations

Notes

Sources

Books

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