Social democracy is an ideology of the political Left that emerged from socialism in the earlier part of the twentieth century. Unlike its cousin Communism, which seeks to destroy capitalism by (violent) revolution and replace it with a different social and economic system, social democracy seeks to regulate capitalism and gives the government a role intervening in order to remedy its alleged deficiencies.
It is generally considered that the international Left split into two distinct camps after the Russian Revolution of 1917. Members of the more extreme factions around the world, which sought to achieve radical societal change through revolution, became known as communists, while members of the less extreme factions, which sought to pursue gradual change through the democratic system, became known as social democrats. The roots of these divisions, in fact, long preceded 1917: Marxists, for example, had called for violent revolution in the nineteenth century, while more moderate parties such as the British Labour Party had never espoused such ideas. Austrian economist Friedrich Hayek writing in 1945 observed, "To many who have watched the transition from socialism to fascism at close quarters the connection between the two systems has become increasingly obvious, but in the democracies the majority of people still believe that socialism and freedom can be combined. They do not realize that democratic socialism, the great utopia of the last few generations, is not only unachievable, but that to strive for it produces something utterly different – the very destruction of freedom itself. 
On one definition, social democrats continue to have the ultimate objective of achieving full socialism, albeit by peaceful means. Others prefer to call such people "democratic socialists" (though non-democratic, violent socialism continues to exist in various parts of the world), and reserve the term "social democrats" for those who would be content with a society comprising a mixture of capitalist and socialist elements (for example, an economy in which a market operates, but with sizeable governmental intervention, and in which enterprise is possible, but business is subjected to high taxes).
Many parties in economically developed nations have espoused social democratic beliefs, including the Labour Party in the United Kingdom, the SPD in Germany (Germany's only party to vote against Hitler's seizure of power), the Social Democratic Parties in Norway, Sweden and Finland, the New Democratic Party in Canada, and the Australian Labor Party. Social democratic beliefs are also found in parts of the American Democratic Party, and some European and South American Christian Democratic parties have resemblences to social democratic parties.
Since the 1980s, a number of social democratic parties have moved away from the territory of the traditional Left and have accepted greater elements of free-market, capitalistic thought. The principal example of this phenomenon is the British Labour Party under Tony Blair, while other examples include the Australian Labor Party under Bob Hawke and Paul Keating, and the German SPD under Gerhard Schroeder. Also more right-wing countries have moved to the left. For example Canada introduced Universal Health Care.
- Road to Serfdom, Friedrich A. Hayek, Reader's Digest Condensed Version, April 1945, pg. 36.