Actual socialism has to be viewed as a transitional stage between capitalism and communism. It's a stage when the working class holds power, but old capitalist relations still persist. It's not capitalism with social services.
For some reason liberals exclusively look to internal conditions of countries, and through positive bias, when deciding the Nordic countries are an example of Capitalism "working." Internationalism doesn't exist to them.
The reason being that they're the people benefiting from the system the way it is. They don't see any fundamental problems because they're not affected by them.
While it is true that social democracy is not what we all want, it's certainly a lot better than unregulated capitalism. Here in Germany, where social democracy is a thing, it's reassuring to have so many safety nets to fall into if something goes really bad. Health endurance, free therapy and Bürgergeld (a way to receive money while searching for a job) are just a few examples. While these systems are certainly being exploited by evil people, they do also make one feel a lot safer.
The problem with social democracy is that it's fleeting by its very nature. A capitalist society may give some concessions to the working class for a period of time, but those concessions will inevitably be rolled back sooner or later. In fact, this will likely be occurring all across Europe now as austerity measures will be implemented to deal with the unfolding financial crisis.
Rules TBD.