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Liberté! Egalité! Low-Carbon Economy!

Europe's Social Democrats spent a century building and ruling over the welfare state; now they're out of power. Here's how solidarity can be restored for the 21st century.

Once Ed Miliband's celebrations for winning the leadership of Britain's Labour Party have subsided, he will have to reckon with his party's disastrous election earlier this year, in which Labour received its second-lowest share of the vote since World War II. Perhaps he'll take solace that Labour isn't alone in the doldrums of opposition: Everywhere in Europe, it seems, the moderate left is enduring hard times.

Social democracy, once the pride of Europe, a genuinely indigenous political movement that fought for the welfare state and bettered the lives of millions, is today in crisis. Sweden's Social Democrats just saw their conservative rivals gain re-election for the first time in 100 years. Only four governments on the continent are headed by Social Democrats -- in Greece, Portugal, Spain, and Norway -- and several of those would likely fall from power if elections were held today. Across 13 European countries, including those with the strongest traditional social democratic parties, their average share of the vote has dropped 7 points since the 1960s.

Social democracy is not a lost cause, though. There's much that can be done to stop the bleeding of Europe's center-left and help moderate European progressives make a comeback in the 21st century.

The first step would be acknowledging just how bad the crisis is. Social democracy simply wasn't built for times like these -- the movement got its start as a way for the working class to earn a political voice after years of being denied one. When social democrats started organizing, workers couldn't vote, couldn't unionize, and endured deplorable working conditions that were unregulated by the state. Social democrats made the working class more than an expendable cog in the capitalist machine, and in return, they received workers' enduring political loyalty.

After World War II, social democrats became the chief advocates and builders of the welfare state, greatly expanding the provision of health care, education, pensions, housing, and income supports for the working class. The 1970s, however, posed new challenges. Economic growth in the advanced countries slowed under the impact of the oil crisis and international competition. Social democrats were caught unprepared. They lacked a program to restore the high levels of economic growth necessary to sustain and expand the welfare state.

The first real attempt to give Europe's center-left a modern update was in the 1990s under the banner of the Third Way. The Third Way was a movement that sought to position social democrats as modern advocates of the market who embraced globalization while retaining a commitment to the basics of the welfare state. Initially there seemed to be some electoral payoff: At the end of the 1990s there were 14 European governments headed by social democrats. But it was only a temporary respite, and the social democratic decline continued apace in the 2000s to its current lows. The Third Way, it turned out, was not quite the modernization elixir its proponents made it out to be.

That's not to say that modernization is a bad idea. But it very much matters what kind of modernization one is talking about. The Third Way was ultimately a rather superficial modernization that replaced socialist dogma with a reliance on technocrats whose faith in market mechanisms failed to produce stable, broadly shared economic growth.

We propose instead that social democrats embrace a new and deeper modernization addressing three aspects of the movement: coalitional, definitional, and organizational.

Today's social democrats face far more competition on the center-left than they ever have before. In many countries, the landscape now includes parties from three parts of the political spectrum: greens, far leftists, and liberal centrists. The first challenge for social democrats will be to co-opt this competition into lasting coalitional partnerships. After all, these new parties now typically earn their highest support among emerging demographics (for example, young people, college graduates, singles, professionals) -- precisely the groups whose support traditional social democrats are struggling to earn.

These competitors' ability to attract new faces has allowed their parties to capture a larger share of the vote in the last several decades. Put together, they now draw more support than the social democrats: Greens, liberal centrists, and far leftists got 55 percent of the left-of-center vote in the last decade in the 13 European countries mentioned earlier.

Social democratic parties have no choice but to adopt a big-tent philosophy, one that unabashedly embraces other center-left political parties and progressive organizations. Europe's progressive forces can only forge a stable majority if they transcend their party boundaries. It may not be comfortable for social democrats to do this, and it certainly won't be easy. But it is necessary: Only social democrats have the organizational muscle, political maturity, and roots in the working class to forge such a coalition.

European social democrats must also do a better job of defining what they stand for and how they differ from conservatives. Third Way advocates did reconcile progressive thought with the market economy, individualism, and globalization, but they did so in a way that allowed conservatives to blur their differences with the left. A more successful approach would be to articulate new signature policies that are bold and distinctive -- and therefore much harder to co-opt.

Social democrats could, for example, lead Europe's shift to a low-carbon economy. The sort of large-scale social change required won't happen, however, without a radically enlarged domestic market for renewable energy -- and that is unlikely to happen without a post-modern industrial policy that creates positive incentives for businesses and invests in sustainable infrastructure. Where European conservatives' economic policies have, at the most, amounted to nothing more than ad hoc Keynesianism (which they have since jettisoned for full-throated austerity), the social democrats now have the opportunity to present a bold alternative.

A closer European Union could be another signature goal of a renewed social democracy movement. The European project has until now been dominated by the goal of market integration, but that era is over. The consensus in Europe now holds that leaders have failed to give enough consideration to economic and fiscal coordination among member states to promote mutual growth. Social democrats are in the best position to rally the public behind policies that would correct Europe's economic imbalances and permit shared prosperity.

Finally, social democrats have failed to modernize their parties, even as their own societies are experiencing waves of demographic and social change. Part of the appeal of many of the new left-of-center parties and the continent's many unaffiliated progressive civic organizations is that they are more open and less hierarchical than social democratic parties. Third Way social democracy in particular was organized around a very tight command-and-control structure. Attempting to manage the 24-hour news cycle, Third Way policy and message development was tightly controlled and their dissemination was centralized; intraparty debate was often frowned upon.

Today, the advent of new social media and the blogosphere makes it impossible to control the news cycle. Moreover, party members tend to be less deferential toward politicians and party officials; absent identification with the party through economic class, supporters want to play a more personal and active role in the political process. Social democratic parties need to become more transparent, disseminate their messages more widely, and organize and leverage supporters more effectively at a grassroots level. But European social democrats should not delude themselves that simply importing the technologies used in Barack Obama's presidential campaign and grafting them onto their own campaigns will be sufficient. The key is building new and more democratic infrastructure around these technologies and cultivating an open relationship between that infrastructure and progressive constituencies.

In this time of crisis for social democracy, there should be no debate about the need for modernization. To avoid becoming merely relics of the 20th century, social democrats will need to embrace change. Going back to the old ways and old constituencies will only assure continued decline. And it would be a tragedy if social democracy were no longer capable of inspiring passion, but rather, only nostalgia.

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