Using a number of different quantitative measures, this article demonstrates that variations in the degree of social democratic decline in nine European countries can be viewed in large measure as a product of two structural economic changes: (1) the shift to smaller units of production; and (2) the growth of private nonindustrial employment. The article explores several causal arguments linking these variables to social democratic decline, and it marshals Swedish and British time-series data to show that the distribution of manufacturing employment by production unit helps explain both the rise and the decline of social democracy.