[WS:] I agree with the demonization part, but propaganda aside, can you show me a single case when a radical revolutionary change produced something better than a social democracy? As far as I can tell, such changes were a significant improvement over the semi-feudal, backward status quo they replaced, but also produced quite repressive and unpleasant political regimes. And their social programs, while quite remarkable in comparison to laissez faire, were really a poor cousin of those brought by social democracy.
Please also consider the fact that virtually all radical, anarcho-syndicalist European parties of the early 20th century - from Spain, to Italy, and to the Netherlands had zero policy achievements and were either wiped out by fascist reaction or fizzled out and were replaced by social democratic alternatives.
I agree that there are limits to social democracy, but to paraphrase Winston Churchill, no better alternative to it has yet been invented. Soviet style communism worked for Eastern Europe for while but it proved to be terribly inflexible and rather oppressive. And the Maoist or Pol-Potist varieties would be a joke if they were less murderous. And I see no point in making a revolution just to stir things up - as this usually has a terrible human cost while making little real changes.
Finally, I agree with Joanna that the USSR was a threat to the capitalist class - not just ideological but also economic and political. Its economic growth continued while the capitalist world succumbed to the Great Depression and it saved the so called Western civilization from Hitler's hordes. Not to mention its support for the national liberation movements in the Third World. In a word, a significant threat to the Anglo-American hegemony. But let's face, that threat fizzled out in the 1970s as the entire Soviet block fell behind not just the old capitalist countries but the new "Asian tigers" as well. That can partially explain capitalist attitudes toward labor in the western countries, but there is far more into it that just a simple threat.
For one thing, the new capitalist class is not 19th century factory owners, but managers that have more in common with the managers of the Soviet or Chinese industrial establishments than with the 19th century "Satanic Mills" owners. And their attitudes toward workers have been shaped by their class position rather than an external political threat. Trust me, the managers of the Soviet-style economy were just as hostile to workers and their unions as the managers of Western corporations.
It is not the "system" or "ownership" but the division of labor that matters here. You can create any political system you want and label it however you want, but as long as the division of labor remains in place - it will make little difference for the management-labor relations. And since nobody has yet found out how a modern economy can function without a division of labor, the de facto class society is here to stay, revolution or not. The best thing we can hope for is implementing institutions that mitigate this division and reduce the excesses. This is where social democracy comes handy. The Scandinavians obtained quite remarkable results from it.
Wojtek