I draw these from: http://en.wikipedia.org/wiki/Social-Democratic under the heading "In general, contemporary Social Democrats support":
1) Private enterprise, but strongly regulated to protect the interests of workers, consumers and small enterprise.
I personally don't think that every item sold in the city should be required to have been made by at least two people. I honestly don't see that requirement has protecting the interestes of workers, consumers or small enterprises. If anything, it just makes selling and creating more tedious and labor-intensive.
2) An extensive system of social security network, although not to the extent of democratic socialists (see welfare state), notably to counteract effects of poverty and to insure the citizens against loss of income following illness and unemployment.
This is an interesting one. If someone's vendor isn't doing so well, by this common belief of Social Democrats, they should be compensated, since in SL not selling anything is sort of like unemployment. I guess that just having the vendor could be considered employment.
I will revisit this issue in the next point, too.
3) Ensuring good education, health care, child care, et cetera for all citizens through government fundings.
My idea is that the city hire some of SL's best scripters and crafters to teach members of the city, so that members of the city can then begin to set up their small enterprises (protected in point one) and become employed.
Additionally, the city could have crafters and scripters that turn over rights to the things they make to the city so that the city can sell them. The city then gets the profits and the person who is making the products draws a wage, rather than a profit from the sales. This would create a worker class that would literally be supported by the city.
4) Higher taxes (necessary to pay for the former), especially for higher income groups.
I think that personally-owned vendors should be scripted in such a way so that the tax level is not fixed, but fluctuates based on 1) the size of the sale and 2) the total of all sales in a specific time period.
Jane Doe should pay less tax on a L$10 sale than John Doe should pay on a L$500 sale. But if Jane Doe sells hundreds of L$10 items, and John Doe only sells a few L$500 items, then the tax burden should shift over to Jane Doe.
5) Extensive social laws (minimum wages, working circumstances, protection against firing).
Anyone doing ANYTHING for the city should get a wage. Coverd by the taxes.
6) Environmental protection laws
Doesn't really apply in SL, I guess except to prevent really ugly builds and maybe noise pollution? Oh and particles. I guess there is pollution in SL.
7) Anti-xenophobic and non-fundamentalist legislations
I believe the aformentioned Constitution will handle this nicely.

Perhaps we could strike up merchandising deals or tourist attraction deals with some of the private sim owners?
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That's my observations right now. Rip 'em to shred or elaborate on them.

