Social democracy originated as an ideology within the labour movement whose goals have been a social revolution to promote socialism within democratic processes. In a nonviolent revolution as in the case of evolutionary socialism, or the establishment and support of a welfare state. Its origins lie in the 1860s as a revolutionary socialism associated with orthodox Marxism. Starting in the 1890s, there was a dispute between committed revolutionary social democrats such as Rosa Luxemburg and reformist social democrats. The latter sided with Marxist revisionists such as Eduard Bernstein, who supported a more gradual approach grounded in liberal democracy and cross-class cooperation. Karl Kautsky represented a centrist position. By the 1920s, social democracy became the dominant political tendency, along with communism, within the international socialist movement, representing a form of democratic socialism with the aim of achieving socialism peacefully. By the 1910s, social democracy had spread worldwide and transitioned towards advocating an evolutionary change from capitalism to socialism using established political processes such as the parliament. In the late 1910s, socialist parties committed to revolutionary socialism renamed themselves as communist parties, causing a split in the socialist movement between these supporting the October Revolution and those opposing it. Social democrats who were opposed to the Bolsheviks later renamed themselves as democratic socialists in order to highlight their differences from communists and later in the 1920s from Marxist–Leninists, disagreeing with the latter on topics such as their opposition to liberal democracy whilst sharing common ideological roots.
In the early post-war era, social democrats in Western Europe rejected the Stalinist political and economic model, which was then current in the Soviet Union. They committed themselves either to an alternative path to socialism or to a compromise between capitalism and socialism. During the post-war period, social democrats embraced the idea of a mixed economy based on the predominance of private property, with only a minority of essential utilities and public services being under public ownership. As a policy regime, social democracy became associated with Keynesian economics, state interventionism and the welfare state as a way to avoid capitalism's typical crises and to avert or prevent mass unemployment, without abolishing factor markets, private property and wage labour. With the rise in popularity of neoliberalism and the New Right by the 1980s, many social democratic parties incorporated the Third Way ideology, aiming to fuse economic liberalism with social democratic welfare policies. By the 2010s, social democratic parties that accepted triangulation and the neoliberal shift in policies such as austerity, deregulation, free trade, privatization and welfare reforms such as workfare, experienced a drastic decline. The Third Way largely fell out of favour in a phenomenon known as Pasokification. Scholars have linked the decline of social democratic parties to the declining number of industrial workers, greater economic prosperity of voters and a tendency for these parties to shift from the left to the centre on economic issues. They alienated their former base of supporters and voters in the process. This decline has been matched by increased support for more left-wing and left-wing populist parties, as well as for Left and Green social democratic parties that reject neoliberal and Third Way policies.
Social democracy was highly influential throughout the 20th century. Starting in the 1920s and 1930s, with the aftermath of World War I and that of the Great Depression, social democrats were elected to power. In countries such as Britain, Germany and Sweden, social democrats passed social reforms and adopted proto-Keynesian approaches that would be promoted across the Western world in the post-war period, lasting until the 1970s and 1990s. Academics, political commentators and other scholars tend to distinguish between authoritarian socialist and democratic socialist states, with the first representing the Soviet Bloc and the latter representing Western Bloc countries which have been democratically governed by socialist parties such as Britain, France, Sweden and Western social democracies in general, among others. Social democracy has been criticized by both the left and right. The left criticizes social democracy for having betrayed the working class during World War I and for playing a role in the failure of the proletarian 1917–1924 revolutionary wave. It further accuses social democrats of having abandoned socialism. Conversely, one critique of the right is mainly related to their criticism of welfare. Another criticism concerns the compatibility of democracy and socialism.
Late 18th century to late 19th century Revolutions and origins in the socialist movement (1793–1864) The concept of social democracy goes back to the French Revolution and the bourgeois-democratic Revolutions of 1848, with historians such as Albert Mathiez seeing the French Constitution of 1793 as an example and inspiration whilst labelling Maximilien Robespierre as the founding father of social democracy. It was Friedrich Engels who, in the second chapter of his 1844 article "The Condition of England", first coined the term "social democracy" while describing the future of England's political system. The origins of social democracy as a working-class movement have been traced to the 1860s, with the rise of the first major working-class party in Europe, the General German Workers' Association (ADAV) founded in 1863 by Ferdinand Lassalle. The 1860s saw the concept of social democracy deliberately distinguishing itself from that of liberal democracy. As Theodore Draper explains in The Roots of American Communism, there were two competing social democratic versions of socialism in 19th-century Europe, especially in Germany, where there was a rivalry over political influence between the Lassalleans and the Marxists. Although the latter theoretically won out by the late 1860s and Lassalle had died early in 1864, in practice the Lassallians won out as their national-style social democracy and reformist socialism influenced the revisionist development of the 1880s and 1910s. The year 1864 saw the founding of the International Workingmen's Association, also known as the First International. It brought together socialists of various stances and initially caused a conflict between Karl Marx and the anarchists, who were led by Mikhail Bakunin, over the role of the state in socialism, with Bakunin rejecting any role for the state. Another issue in the First International was the question of reformism and its role within socialism.
First International era, Lassalleans, and Marxists (1864–1889)
Although Lassalle was not a Marxist, he was influenced by the theories of Marx and Friedrich Engels and accepted the existence and importance of class struggle. Unlike Marx and Engels' Communist Manifesto, Lassalle promoted class struggle in a more moderate form. While Marx's theory of the state saw it negatively as an instrument of class rule that should only exist temporarily upon the rise to power of the proletariat and then dismantled, Lassalle accepted the state. Lassalle viewed the state as a means through which workers could enhance their interests and even transform the society to create an economy based on worker-run cooperatives. Lassalle's strategy was primarily electoral and reformist, with Lassalleans contending that the working class needed a political party that fought above all for universal adult male suffrage.
The ADAV's party newspaper was called The Social Democrat (). Marx and Engels responded to the title Sozialdemocrat with distaste and Engels once writing: "But what a title: Sozialdemokrat! ... Why do they not call the thing simply The Proletarian". Marx agreed with Engels that Sozialdemokrat was a bad title. Although the origins of the name Sozialdemokrat actually traced back to Marx's German translation in 1848 of the Democratic Socialist Party () into the Party of Social Democracy (), Marx did not like this French party because he viewed it as dominated by the middle class and associated the word Sozialdemokrat with that party. There was a Marxist faction within the ADAV represented by Wilhelm Liebknecht, who became one of the editors of the Der Sozialdemokrat. While democrats looked to the Revolutions of 1848 as a democratic revolution which in the long run ensured liberty, equality and fraternity, Marxists denounced 1848 as a betrayal of working-class ideals by a bourgeoisie indifferent to the legitimate demands of the proletariat.
Faced with opposition from liberal capitalists to his socialist policies, Lassalle controversially attempted to forge a tactical alliance with the conservative aristocratic Junkers due to their communitarian anti-bourgeois attitudes as well as with Prussian Chancellor Otto von Bismarck. Friction in the ADAV arose over Lassalle's policy of a friendly approach to Bismarck that had incorrectly presumed that Bismarck would in turn be friendly towards them. This approach was opposed by the party's faction associated with Marx and Engels, including Liebknecht. Opposition in the ADAV to Lassalle's friendly approach to Bismarck's government resulted in Liebknecht resigning from his position as editor of Sozialdemokrat and leaving the ADAV in 1865. In 1869, August Bebel and Liebknecht founded the Social Democratic Workers' Party of Germany (SDAP) as a merger of the petty-bourgeois Saxon People's Party (SVP), a faction of the ADAV and members of the League of German Workers' Associations (VDA).
Although the SDAP was not officially Marxist, it was the first major working-class organization to be led by Marxists and both Marx and Engels had direct association with the party. The party adopted stances similar to those adopted by Marx at the First International. There was intense rivalry and antagonism between the SDAP and the ADAV, with the SDAP being highly hostile to the Prussian government while the ADAV pursued a reformist and more cooperative approach. This rivalry reached its height involving the two parties' stances on the Franco-Prussian War, with the SDAP refusing to support Prussia's war effort by claiming it was an imperialist war pursued by Bismarck while the ADAV supported the war as a defensive one because it saw Emperor Napoleon III and France as an "overreacting aggressor".
In the aftermath of the defeat of France in the Franco-Prussian War, revolution broke out in France, with revolutionary army members along with working-class revolutionaries founding the Paris Commune. The Paris Commune appealed both to the citizens of Paris regardless of class as well as to the working class, a major base of support for the government, via militant rhetoric. In spite of such militant rhetoric to appeal to the working class, the Paris Commune received substantial support from the middle-class bourgeoisie of Paris, including shopkeepers and merchants. In part due to its sizeable number neo-Proudhonians and neo-Jacobins in the Central Committee, the Paris Commune declared that it was not opposed to private property, but that it rather hoped to create the widest distribution of it. The political composition of the Paris Commune included twenty-five neo-Jacobins, fifteen to twenty neo-Proudhonians and proto-syndicalists, nine or ten Blanquists, a variety of radical republicans and a few members of the First International influenced by Marx.