A true utopia is impossible. Many radicals - not all, granted - recognise this. Still, they argue that, although a perfect utopian society is not realistic, we can still all come together and build one. This kind of idealism can often lead to sectarianism, wars and conflict. From this perspective, if we can't find salvation in a kind of mass collectivisation, we find salvation in a turn inward. We can do this through reflection, self-analysis, the study of literature and a distanced theorising of society. In this sense, I am an individualist.
Unlike the socialist position that man is inherently good, I take the position that man is not inherently good. In the worst cases, his mind is a scrambled mess, ravaged by neuroses, fears and, in the most extreme cases, psychoses. In the best cases, the human mind has overarching moments of serenity and comfort. This can be attributable to a number of extrinsic factors such as economic conditions. I would be quick to rubbish claims that because suicide rates are higher in, say, Denmark, that people are therefore gloomier over there. Denmark apparently has the highest rates of happiness, whatever that means. (How would you even begin to measure such an abstract thing?!) The human mind may be relatively content thanks to marital bliss. Or a satisfying job. Or a satisfying hobby. Etc. In the best case scenario, the human mind may be relatively content, but there are always lingering doubts. Whatever that person's circumstances, he will always vie for even better, or worse, ones! Regarding the latter, it has been a recurrent trope in literature to have a wealthy aristocrat heading over to impoverished and turbulent parts of the world. Think of Marlow in Conrad's Heart of Darkness or D. H. Lawrence's The Woman Who Rode Away, where a bored aristocratic housewife flees her opulent lifestyle to join a North American Indian tribe.
It is true that man will take advantage of power. He will deceive people whenever he can. The Rousseauist belief is that man is born free, but this purity and freedom is debased by the society that conditions him. I would say that we are born largely as we already are now, with an inbuilt desire for freedom which is always denied. This is very Freudian. We are constantly dissatisfied.
From these philosophical theories, people draw political ones which inform policy. There are many people who arrive at the conclusions posited above and reach a laissez-faire/libertarian/free market political position. A common argument given by a free marketeer is that the main reason why socialism doesn't work is that politicians take advantage of their special privileges and wreck the economy as a result. Given man's flawed nature, a person is just as prone to exploit a position of power in a private business as he is in a political position. That's why the complete deregulation of the financial sector is so careless - it lets the devious side of man's nature take advantage of power and to drive financial institutions into bankruptcy. It is these people, truth be told, who wreck economies.
Just because man might be inherently bad does not a priori mean that we can't try to build a better society nor help others. Just because we recognise that we are limited does not mean we should lose our compassion. On the one hand, we should not be slothful and say 'we are flawed - nothing can be done' and plonk ourselves in front of the TV set. On the other, neither should our limitations lead us to put people into 'intellectual castes.' We should not say 'humanity is limited and is doomed to perdition - but we can always we saved by a Superman who transcends these limitations.'
Social democracy creates institutions which actually help support individualism and self-growth. Take a British institution like the BBC. Everyone who wants to watch it has to pay a licence fee. Yet the quality of the programming over the years has done a lot to aid individual intellectual curiosity. Although it is based on the premise of a licence fee, it equally be said that it is there equally as an aid for individual growth as it is for the good of the community and economy. Through institutions which provide services in the creative arts, education, health etc. it helps to build on one's individualism and self-growth whilst also centering itself on an economy based on solidarity and altruism.
There are different kinds of individualism. The market individualism celebrated by laissez-faire economists is extremely shallow. Such economists see absolutely nothing wrong with the insatiable desire for consumer goods, the saturation of mass advertisements and the dog-eat-dog competition where big businesses crush small ones. If this is the only conception people have of individualism, then I would rather have nothing to do with it. Secular liberal democracies also root out religious individualism. Religious individualism leads one to spiritual growth, reflection etc. It does this whilst building itself around a sense of community and ritual. Religious communities are another example of the ways in which individualism can be fostered whilst retaining altruistic and culture-conserving practices. It must be noted that market individualism homogenises culture, depletes hundreds of years of local tradition and turns the entire world into one giant shopping mall.