Here comes an uninformed opinion which I'll throw out and see what people think of it. Most likely I'll get lots of disagreement but I think that's fine as well.
In my eyes the fall of the USSR was catastrophic for the left in the West. And the way I see it there have been, or could have been, four main results from this in regards to the Left. And admittantly I am here taking lots of things from my own personal experience. So I could be up the walls wrong, but here goes.
1. No boogeyman for the Right. To start with there's no monster scaring the right-wing any more on an ideological level. So there's little need for moderation or cooperation and not go all-in regarding a right turn in the economy and society. Its back to the 19th century where real threats to the socio-political order are far and few between. And I think that the current shifts in my country comes at least partly from this. When there's no monster that you must keep people from getting attracted to, you can essentially screw them over without fear this monster will get a foothold in the system due to, well, people getting screwed over and looking to see if the grass is greener on the other side.
2. Easy to tie leftist politics to a failed system. Given that its undeniable that the Soviet system ended up failing its by far easier to link this to left-wing politics that tie them to failure and collapse. Just like one can tie right-wing politics to the US and get them associated with success and good stuff, regardless of how faithful this association really is. If the Soviet Union had still been running then it would have been easy to point to the USSR and claim that leftist politics keeps it strong and working.
3. Far easier to demonize left-wing politics and alienate people from them. By having been associated with the USSR leftist parties can be denounced through "guilt by association" with the USSR and their misdeeds where Lenin and Stalin would be perhaps the most popular of the targets for right-wing propaganda. Thus making people think that a vote for a left-wing party that isn't clear and fast to embrace a centrist position will lead to a vote on getting a Stalin into power. There was a mentioning above in the thread that the workers had moved from steel mills to McDonald's. And that is true but what is also true is that socialist politics, like labour organization and unions, can in people's minds be associated with KGB, DDR and other less than nice aspects of the Communist system and act as a stop sign to keep workers from going for them. Much to the gain of employers and loss of the workers.
4. No real alternative to capitalism in the world. And finally no matter where you look there really isn't an alternative to capitalism. So if you think this system sucks, well, you'll only find capitalism no matter where you look, with some minor and by now well demonized exceptions, and so getting the sense that there's no other way or that nothing can be done about it. Contrary to this USSR would offer a clear cut example that things can be done differently regardless if you agree with them or not.
