Recently, the Nation has published articles and videos related to why and where social democracy works. While it may be hard to compare a large country like the United States to a small homogeneous country like Denmark, the Nation released a video comparing the lives of generic woman from birth to retirement as an explanation of why Denmark citizens are the second happiest in the world and the US citizens are fifteenth.
From my research it appears that social democracy requires citizens to be productive rather than competitive. Everyone expects a minimum standard of living that is less flashy (i.e. an apartment instead of a house, one car instead of two, etc.), but guarantees lifetime benefits. The lifetime benefits usually include healthcare, childcare, parental leave, paid holidays, paid vacation and paid retirement (at a considerably higher rate that social security). This works within a capitalist economy where everyone pays high taxes and receives subsidies as needed and benefits regardless of need.
Social democracy originated as approach offering an evolutionary and peaceful transition from capitalism to socialism using established political processes rather than revolution. The modern version is committed to policies aimed at curbing inequality, oppression of underprivileged groups, and poverty; including support for universally accessible public services like care for the elderly, child care, education, health care, and workers’ compensation. The social democratic movement normally has strong connections with labor movements and trade unions and supports collective bargaining ans workers’ rights.
Social democracy has been criticized for selling out to capitalism in its modern form. Socialists reject it as no longer leading to socialism or supporting socialist ideals. The most recent wave of social democracy began in the 1990’s and is usually referred to as the Third Wave. This doctrine attempts to reconcile right-wing and left-wing politics with a kind of centrism. Ethical socialism and capitalism are gradually married into policies that support greater egalitarianism which mitigates the excesses of capitalism. This could be interpreted to mean greater rewards for those who work harder and smarter and allows greater gaps among between social groups with a society. Benefits would probably be less universal too.
Bernie Sanders has identified himself as a democratic socialist, but he doesn’t believe in government ownership of production. He is really a social democrat (see a recent article in the Atlantic). Bill Moyers has identified social democracy as 100-percent American and identified the four American freedoms supporting it: freedom of speech, freedom of religion, freedom from want, freedom from fear.
And, socialism itself is becoming an acceptable belief again among younger Americans where many believe in it and distrust capitalism. Repairing the American social contract will require younger Americans to make sacrifices and accept a lower standard of living. In fairness, they should be guaranteed compensation similar to those of social democracy.