This is what it is.
Nothing wrong with that, is there?
Social democracy is basically a kind of compromise between capitalism and democratic socialism. While socialism proposes that all industries come under state or cooperative ownership and control, social democracy instead proposes the nationalizing of only certain essential services while still allowing private enterprise for the rest. The rationale is that certain services do not operate in the interests of the public good in a for-profit environment and inevitably result in inequality, but free enterprise is still necessary for innovation and competition (and indeed, social-democratic systems can and do involve private enterprises acting in direct competition with the nationalized services). Essentially, it's democratic socialism within a capitalistic framework. As a result, some of the more radical socialist ideologies tend to be highly critical of social democracy, feeling that it at best only offers a temporary delay, not a solution to the corrosive effects capital has on society.
Associated Economic Theories (if any):
Keynesian, Behavioural
Democracy and Meritocracy (Important and Yes/No, or Unimportant):
Democracy: Important-Yes
Meritocracy: Important-Yes
"Essential services" can refer to education, public transport, health insurance, welfare, water, electricity, and so on. In fact, the truth is that most government systems that self-identify as capitalist are also social-democratic in some way or another, with most services above nationalized: even the USA, which is infamously wary of socialism as a nation, has such programs as Medicare (nationalized health insurance for citizens over 65) and so on.
Most developed countries are social democracies to some extent and have an official social democratic party. Spain currently has the longest record of its form of the party, the Spanish Socialist Workers' Party/ Partido Socialista Obrero Español, being in power. It's been in power for 21 of the 40 years Spain has been a democracy. Throughout the latter half of the 20th century, Social Democracies were limited to Western/Northern Europe and anglophile countries, but the practice has spread to the Asian Tiger economies of South Korea, Taiwan, Hong Kong, and Singapore. It's even gaining hold in the world's most populous democracy, India, as its middle class and economy continue to grow and develop. Its boldest push towards a social democracy is a universal healthcare program for the country's poorest half that was implemented in 2018 with a goal of true universal healthcare by 2030.
In terms of influence outside general Marxism, Social Democracy tends to draw heavily from the Enlightenment. Social Democratic parties tend to push the platform of secularism, progress and a technocratic/democratic approach to governing more so than other political parties in nations they are found in (thus making it Enlightenment liberalism turned Up to Eleven).
Nothing wrong with that, is there?