Is a form of Capitalism. It is Capitalism regulated by a strong democratic government, restricted by active labor unions and mitigated by generous social welfare provisions. Most countries in the European Union are more or less Social Democratic.

Social Democracy began with the German Social Democratic Party. Because Karl Marx was a major contributor to the foundation of this party, we can say that Social Democracy is Marx's contribution to human welfare.

Although doctrinaire free market types call it Socialism, Social Democracy is not true Socialism because it does not involve direct and massive government control over production.

Social Democracy is by no means a perfect economic and social system. It is however one of the best that has ever been invented. Socialism - as in Cuba - performs poorly because the government is not particularly good at running businesses. Pure capitalism performs poorly because businessmen have repeatedly shown themselves to be incapable of running an economy. Think G W Bush and Hank Paulson.

You can't expect farmers to produce milk and you can't let the cows run the farm. Social Democracy assigns each group their proper tasks.