Although analysts in the Global South as well as the North have long accepted “the Left” and “socialism” as denoting political tendencies in their regions, “social democracy,” another European-derived term, is more controversial. The first two terms have passed into common usage globally, but the last term has not – as yet. Some social scientists deny the validity of extrapolating this concept beyond its Western bailiwick. They claim that the context of social democracy in Europe, especially the existence of a large and well-organized working class and corporatist arrangements, does not obtain in the developing world, and that the term should therefore be avoided (e.g. Levitsky and Roberts 2011: 23–4). To the contrary, I contend that social democracy represents a political tendency within capitalism globally. This chapter focuses on the pitfalls and promise of moderate social democracy in the Global South.

The pitfalls arise, I contend, from a leftist government’s response to what I identify in Chapter 1 as an intrinsic conflict within capitalism between the liberal movement and the societal counter-movement. I argued earlier that this conflict is more in the nature of an inherent, persistent tension than an irreconcilable contradiction. In essence, the clash is between the logic of disembedding the economy (giving priority to commodification, liberalization and efficiency), on the one hand, and, on the other, the counter-logic of re-embedding markets (protecting society and nature by decommodifying labor, land and money and promoting redistribution and reciprocity). This conflict can intensify into a deadlock, leading to economic crisis and eventually a political crisis, as in Germany in the 1920s and early 1930s. Alternatively, a refurbished modus vivendi may arise – championed by a well-functioning democratic system, as in the case of President Roosevelt’s government and its New Deal, or an enlightened dictatorship, as in the East Asian developmental states.