Sure, but that doesn't mean they're moving away from Social Democracy. The point is that the regulations they do have are there to help the working-class, not the rich. Although I do think with all of the third world immigration they've had, eventually they will have to cut their social programs. Conservatards will say it's proof that "Socialism" doesn't work, but it will really be Globalism failing Europe.
I think it's more than that. The reason Scandinavia did so well near the end of last century and during the first part of the last decade is that they were culturally homogeneous. You can go the Social Democracy route and somewhat succeed if the vast majority of people are on the same page in terms of priorities. It's why even communes do well with small groups of like-minded people.
When you have a society that is very culturally diverse, policies are necessarily more aimed at individualism and capitalism. This is why America is capitalist by design. As it grows more diverse, it will have to maintain this capitalistic approach.
If we instead shift to socialistic practices and a larger welfare state, that will eventually create a massive collapse. This is largely due to the differences in priorities between cultures here.
If you define Capitalism as just having a mostly free market, then sure, all of Europe is Capitalist. But that definition is kind of useless in actual application. A mostly free market with little to no regulation results in regulations to help the rich get richer. That's an extremely different result from Social Democracy, which has a mostly free market but doesn't do the "small government" bullshit. That ensures the 1% doesn't become ultra-powerful like in America.
I see it the opposite way. Regulation, regardless of the regime involved, usually plays favorites. You could argue some regimes are worse about it than others, but politicians have friends that they help and pay favors to. This is true even in the countries that are most oriented toward left causes.
I'm not saying that all regulation is bad, but it is certainly not a guarantee of "income equality." Also, just because a country has a low amount of income inequality, it doesn't mean that the quality of life is good. Plenty of very poor nations have extremely equalized wealth -- nearly everyone is poor.
I wouldn't say that the Nordic countries have low income inequality because of regulation. It seems to have more to do with their cultures. They have strong family units, a high emphasis on education, and a strong work ethic. All that combined can lead to low poverty and low income inequality. They do have high personal tax rates, but this is true for almost all income brackets, not just the rich. Working class people pay a pretty large share of their income in taxes. And their corporate taxes are lower than ours in most cases.
They have more gun control in Europe, but guns are still legal. They don't believe it's a right to own a gun, but Europeans do have the freedom to buy guns.
Speech is probably the one area America does have more freedom on.
Depending on the country, buying a gun in Europe is usually very expensive and very difficult. It can hardly be considered a freedom if you have to pay a huge amount, file excessive paperwork, and be harassed by law enforcement about why you need a gun. In a lot of Europe, you literally have to argue your case for having a gun. The police are free to allow or deny your case as they see fit. That's pretty much asking for a system where bribery is needed.
