Social democracy was birthed in the 19th century as a political, social and economic philosophy aiming for the gradual and peaceful transition from capitalism to socialism. However, it has evolved significantly so that today it is usually understood as aiming for a democratic state that melds both capitalist and socialist practices.
In Germany, for instance, the Social Democratic Workers’ Party was established in 1869, before uniting with the General German Workers’ Union to form the Social Democratic Party of Germany. By 1912 it was the largest party in the German parliament and at the forefront of a continent-wide social-democratic movement.
The philosophy won the support of numerous intellectuals – among them Eduard Bernstein, whose critique of Marxism was particularly influential in Germany, and the Polish-born Rosa Luxemburg (1871–1919), who, in the early part of the 20th century, proclaimed: ‘The more that social democracy develops, grows, and becomes stronger, the more the enlightened masses of workers will take their own destinies, the leadership of their movement, and the determination of its direction into their own hands.’
The bloodshed associated with the Russian Revolution deepened the division between communist and social-democratic parties, the latter of which continued to grow in influence in northern and western Europe in particular. By 1940, for instance, George Orwell was writing of ‘drifting definitely towards a world social democracy.’ Sure enough, several social-democratic governments came to power in the aftermath of the war – for example, in West Germany, Sweden and the UK – and began to build modern welfare states. In Britain, for instance, the social-democratic Labour Party constructed a National Health Service, delivering healthcare to all free at the point of delivery.
Rather than transitioning towards socialism or even melding capitalist and socialist ideologies, many social-democratic parties settled instead for regulating state agencies and commercial enterprises with the aim of achieving greater social and economic equity. Essentially, social democracy had become shorthand for welfare provision and limited state intervention – a distance from the goals of its original adherents.
The third way
Social democracy adopted yet another guise in the 1990s – the so-called Third Way, which claimed to fuse traditional welfare policies with laissez-faire economics. Leading Third Way figures became major players on the world stage: Bill Clinton in the USA, Gerhard Schröder in Germany, Tony Blair in the UK and Romani Prodi in Italy. Blair told the Congress of European Socialist Parties in 1997: ‘Our task is not to fight old battles, but to show there is a third way, a way of marrying together an open economy, a competitive and successful economy, with a just and humane society.’