Social democracy is a political, social, and economic philosophy within the socialist tradition. As an economic ideology and policy regime, it is described by academics as advocating economic and social interventions to promote social justice within the framework of a liberal-democratic polity and a capitalist-oriented mixed economy. The protocols and norms used to accomplish this involve a commitment to representative and participatory democracy, measures for income redistribution, regulation of the economy in the general interest, and social-welfare provisions. Due to longstanding governance by social democratic parties during the post-war consensus and their influence on socioeconomic policy in Northern and Western Europe, social democracy became associated with Keynesianism, the Nordic model, the social liberal paradigm, and welfare states within political circles in the late 20th century. It has been described as the most common form of Western or modern socialism as well as the reformist wing of democratic socialism.
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Social democracy originated as a political ideology that advocated an evolutionary and peaceful transition from capitalism to socialism using established political processes in contrast to the revolutionary approach to transition associated with orthodox Marxism. In the early post-war era in Western Europe, social democratic parties rejected the Stalinist political and economic model then current in the Soviet Union, committing themselves either to an alternative path to socialism or to a compromise between capitalism and socialism. In this period, social democrats embraced a mixed economy based on the predominance of private property, with only a minority of essential utilities and public services under public ownership. As a result, social democracy became associated with Keynesian economics, state interventionism, and the welfare state while placing less emphasis on the prior goal of replacing the capitalist system (factor markets, private property and wage labor) with a qualitatively different socialist economic system.
Social democracy seeks to humanize capitalism and create the conditions for it to lead to greater democratic, egalitarian, and solidaristic outcomes. It is characterized by a commitment to policies aimed at curbing inequality, eliminating oppression of underprivileged groups, and eradicating poverty—as well as support for universally accessible public services like care for the elderly, child care, education, health care, and workers' compensation. It often has strong connections with the labour movement and trade unions, being supportive of collective bargaining rights for workers and measures to extend decision-making beyond politics into the economic sphere in the form of co-determination—or even social ownership—for employees and stakeholders. The Third Way, which ostensibly aims to fuse liberal economics with social democratic welfare policies, is an ideology that developed in the 1990s and is sometimes associated with social democratic parties, but some analysts have instead characterized the Third Way as an effectively neoliberal movement.