Social democracy accepts a role for private property and the market, but also accepts that unchecked economic development produces can great inequality, social democrats argue, by concentrating wealth in the hands of a very few. This in turn can polarize society, pitting owners against laborers, rich against poor, city against countryside. In this way of thinking, the state is seen not as a threat to society or economy but as a creator and protector of social rights.
Social democrats argue that a wide array of public goods, such as health care, pensions, and higher education, should be made available by the state. The need for competition should not stand in the way of strong state regulation or even ownership of certain sectors of the economy, and trade should similarly be managed in such a way that it does not endanger domestic businesses and jobs. This goal of social equality requires a higher level of social expenditures to ensure basic benefits for all. Taxes make these social expenditures possible while also redistributing wealth from the rich to the poor. Thus, taxes tend to be higher in a social democratic system, and capitalism more constrained.
Social democratic political parties try to mobilize political support for positive state and government actions. They aim to provide such social and economic rights as equal opportunities for basic education, adequate health care, acceptable housing, productive employment in the workforce, fair payment for workers, and guaranteed pension plans for people retired from the workforce. Social democrats claim that their commitment to social and economic rights in addition to traditional liberal ideas about political and private rights is an advanced or more fully developed model of democracy in comparison with the liberal model. While the traditional liberal model of democracy only emphasizes individual liberty, the social democratic model, according to its proponents, stresses both liberal and egalitarian ideals.
Several constitutional democracies in Europe—Finland, Norway, Sweden and the Netherlands for example—and elsewhere include significant social democratic parties, which campaign to promote egalitarian policies in the government. India is a prominent representative and constitutional democracy with a very strong commitment to the ideals of social democracy. The preamble to the 1950 constitution of India says the political system is ‘‘a sovereign socialist secular democratic republic’’ and providing certain egalitarian social and economic rights is proclaimed to be a responsibility of the state to its people.
Critics of social democracy in the United States and elsewhere stress that a very strongly empowered state and government is required to carry out the social democracy program of social and economic rights. The critics claim that positive state action to provide egalitarian social programs requires extensive redistribution of wealth and excessive government regulation of the society and economy.
Thus, advocates of individual rights associated with the traditional liberal model of democracy claim that their principles of liberty would be minimized or even sacrificed if the egalitarian ideals of social democracy were to be maximized through excessive control of society by the government.