Shachtman then founded the Workers Party which became the Independent Socialist League in 1948. Initially the League described itself as an anti-Stalinist, Marxist-Leninist organization. However, Shachtman ultimately became disillusioned with revolutionary socialism and the League shifted its philosophy to a more democratic socialist orientation. While the ISL would always remain a small organization, it benefited from a very dedicated core of activists which would come to include such notables as Michael Harrington within its ranks.
In 1958 the ISL merged with the Socialist Party. Shachtman greatly influenced the American Socialist movement by encouraging socialist participation within the left-wings of the Democratic Party and the American labor movement. This strategy proved surprisingly successful. To some extent, the social programs proposed by the Johnson administration were inspired by the writings and activism of intellectuals associated with Shachtman and the Socialist Party.
Within the SP, Shachtman's followers were referred to as the Shachtmanites. The ambition of the Shachtmanites energized the Socialist Party, which became an important though largely unacknowledged participant in the US civil rights movement, anti-poverty activism and other issues.
Ultimately however, the Shachtmanite tendency to affiliate with large, powerful institutions came at a price. The ties established with the Johnson administration made criticism of the Vietnam War very difficult. Many on the left felt that Shachtman and, by extension, the Socialist Party had abandoned its anti-war heritage. In the end many Shachtmanites openly championed the Cold War, which they saw as a showdown between democracy and totalitarianism.
In the early 1970s the increasingly right-leaning Shachtmanites seized the leadership of the party and changed the organization's name to "Social Democrats, USA." After the name change many of the older socialists of the Norman Thomas generation left the Party, as did the former Shachtmanite Michael Harrington.
After Shachtman's death in 1972, many Shachtmanites rose to prominent positions in government and organized labor. Their legacy has been very ambiguous from the perspective of the left. Generally the Shachtmanites have promoted pro-labor policies while continuing to support unbridled military intervention abroad. Within the AFL-CIO they often focused their attention overseas, working within the State Department to support liberal trade unions organizing in totalitarian regimes like Polish Solidarity
The most lasting legacy of Shachtman may be the intellectual contribution that Shachtman's followers and colleagues made to neoconservatism. Their disgust with Carter's "peacenik" agenda led many Shachtmanites to support Ronald Reagan in the 1980s. More generally, many of the founders of neoconservatism, such as Irving Kristol, Nathan Glazer, and Sidney Hook, developed their thinking in the anti-Stalinist milieu of the Trotskyist left of the 1930s and 1940s. Indeed, the enthusiasm with which many neoconservatives championed the "Operation Iraqi Freedom" reveals some of the same idealistic and internationalist spirit of their Trotskyist predecessors.