The Long, Slow Death of Social Democracy

For three decades, social democracy was the most successful product of a working-class movement that had long contained both revolutionary and reformist elements. Between 1946 and 1973, United States GDP grew by 3.8% annually, and by 2.4% on a per-capita basis. Unemployment averaged 4.8%, and real median family incomes rose at a rate of 2.8% per year, more than doubling over the time period. What’s more, this growth was stronger at the bottom and relatively weaker at the top, meaning income inequality fell substantially.

The Keynesian economic consensus in Western industrial democracies during this period produced strong economic growth, low unemployment, rapidly rising living standards, and government action to provide protection and security for the average citizen.

Reflecting these positive developments, the social democratic-oriented Democratic Party received high levels of electoral support. In the six elections between 1932 and 1948, Democratic presidential support averaged 55%. After the liberal Republican Dwight Eisenhower won two terms in the 1950s, the Democrats again averaged 55% presidential support in 1960 and 1964. And during almost all of this period, the Democrats controlled both houses of Congress.

But as the 1970s dawned, three factors converged and reinforced one another to undermine social democracy—and eventually lead to its death. First, the social democratic economic model lost effectiveness; second, the social democratic base got smaller; and third, the social democratic influence within the Left weakened.