As a self-identifying social democrat, I found the most astute and enlightening analysis on the nature and impact of this political and ideological movement in Gösta Esping-Andersen's Politics against Markets: The Social Democratic Road to Power (Princeton University Press, 1985). It's a bit old, but that's also what makes it interesting - because we can see how much the realm of possibility for left-wing policies has narrowed over the course of a decade.
You mean three decades?
There is also the interesting question how many of those limits are self imposed and how many dictated by changes in the global economy and general globalization.
Even as early 1995, I believe the policies that Esping-Andersen advocated would have sounded utterly outlandish to the entire political class. The Third Way was already in the making at that point.
And I think Esping-Andersen would argue that this ideological shift is the result of the Social Democratic parties' inability to seize the last occasions they had to implement an agenda for economic democracy. Once these occasions were gone, Social Democratic decomposition among the working class and the hegemony of neoliberal thought among the middle classes became too pronounced for such agenda to be politically viable.
ED wasn't really on the agenda for SDs in most countries. To my knowledge it was only in Sweden and Denmark that there were concrete proposals for ED - and only in Sweden that they actually tried elements of it and then only after it had been watered down. The PCI discussed it in Italy, but dropped it as too "statist" (kinda ironic).
In Sweden and Denmark economic democracy was met by resistance not only just by business interests threatening (and executing) capital flight (in Sweden you had Ikea, Tetrapak and H&M etc. leaving the country after a very moderate version of ED was implemented) and bourgeois politicians, but also from left wingers that felt it blocked
real Socialism and SD right wingers, especially among union leaders.
I am not sure in what countries SDs actually had the power to implement ED. There is Sweden and I suppose Labour could have done it in Britain if the really wanted to (but then they would be guaranteed to lose the next election, after which a Tory government would undo it). Not sure about France in 1981-83. In most countries SDs depended on support from centrist or true leftist parties that would have opposed ED or were too weak to maintain power after implementing ED. You need a solid majority to accomplish something like that.
But yeah you are right, it is crazy how far social discourse in Europe has moved. Even our later Liberal PM Anders Fogh Rasmussen supported some decentralised form of ED as a young man and plenty of Social Liberals did.
There is a rather famous (well, only in DK) Danish debate book from the late 70s called "Rebellion from the Center" written by a Social Liberal politician, a well-known author and philosopher and a physicist and social debater. Back when I taught high school my students considered it's proposals of economic democracy, steady state economy, basic income and direct democracy pure "socialism" (and I think most adult Danes would agree with them). Whereas back then it was an attempt to reconcile elements from Liberalism and Socialism and find a progressive Third Way.
