page_title: Social democracy
section_title: Cold War era and post-war consensus (1945–1973)
hierarchical_section_title: Social democracy / History / Cold War era and post-war consensus (1945–1973)
caption_attribution_description: Photograph of former British Prime Minister Clement Attlee during visit to Hill Auditorium at University of Michigan
context_page_description: Social democracy is a political, social and economic philosophy within socialism that supports political and economic democracy. As a 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.
context_section_description: After World War II, a new international organization called the Socialist International was formed in 1951 to represent social democracy and a democratic socialism in opposition to Soviet-style socialism. In the founding Frankfurt Declaration on 3 July, its Aims and Tasks of Democratic Socialism: Declaration of the Socialist International denounced both capitalism and Bolshevism, better known as Marxism–Leninism and referred to as Communism—criticizing the latter in articles 7, 8, 9 and 10.
  The rise of Keynesianism in the Western world during the Cold War influenced the development of social democracy. The attitude of social democrats towards capitalism changed as a result of the rise of Keynesianism. Capitalism was acceptable to social democrats only if capitalism's typical crises could be prevented and if mass unemployment could be averted, therefore Keynesianism was believed to be able to provide this. Social democrats came to accept the market for reasons of efficiency and endorsed Keynesianism as that was expected to reconcile democracy and capitalism. According to Michael Harrington, this represented a compromise between capitalism and socialism. While the post-war period of social democracy saw several social-democratic parties renouncing orthodox Marxism, they did not lose their revisionist Marxist character, nor did they stop looking at Marx for inspiration such as in the form of Marxist humanism. However, Marxism was associated with the Marxism–Leninism as practized in the Soviet Union and the Eastern Bloc which social democracy rejected and regarded as "falsely claim[ing] a share in the Socialist tradition. In fact it has distorted that tradition beyond recognition". Rather than a close or dogmatic Marxism, social democracy favours an open and "critical spirit of Marxism".
  For Harrington, social democracy believes that capitalism be reformed from within and that gradually a socialist economy will be created. The "social democratic compromise" involving Keynesianism led to a capitalism under socialist governments that would generate such growth that the surplus would make possible "an endless improvement of the quality of social life". According to Harrington, the socialists had become the "normal party of government" in Europe while their "conservative opponents were forced to accept measures they had once denounced on principle". Although this socialist pragmatism led in theory and practice to utopias hostile to one another, they all shared basic assumptions. This "social democratic compromise" goes back to the 1930s, when there was "a ferment in the movement, a break with the old either/or Kautskyan tradition, a new willingness to develop socialist programs that could work with and modify capitalism, but that fell far short of a "revolutionary" transformation".
  After the 1945 general election, a Labour government was formed by Clement Attlee. Attlee immediately began a program of major nationalization of the economy. From 1945 to 1951, the Labour government nationalized the Bank of England, civil aviation, cable and wireless, coal, transport, electricity, gas and iron and steel. This policy of major nationalizations gained support from the left faction within the Labour Party that saw the nationalizations as achieving the transformation of Britain from a capitalist to socialist economy.
  The Labour government's nationalizations were staunchly condemned by the opposition Conservative Party. The Conservatives defended private enterprise and accused the Labour government of intending to create a Soviet-style centrally planned socialist state. Despite these accusations, the Labour government's three Chancellors of the Exchequer, namely Hugh Dalton, Stafford Cripps and Hugh Gaitskell, all opposed Soviet-style central planning. Initially, there were strong direct controls by the state in the economy that had already been implemented by the British government during World War II, but after the war these controls gradually loosened under the Labour government and were eventually phased out and replaced by Keynesian d
caption: Clement Attlee, prime minister of the United Kingdom (1945–1951)
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