The return of the local state? Failing neoliberalism, remunicipalisation, and the role of the state in advanced capitalism

Abstract

Picking up on the manifestation of state intervention following the 2008 financial crisis, we argue that the recent trend towards remunicipalisation underlines but also problematises the thesis of new state capitalism. Remunicipalisation refers to a process whereby towns, cities and sub-national regions take previously privatised services and infrastructures back into public ownership. Remunicipalisation has led to the emergence of regionally- and municipally-owned state enterprises across a wide range of sectors including water, energy, waste, transport, education, (tele)communications, and health and social care. Engaging with the nature of the ‘new’ state capitalism, and particularly challenging its theoretically restrictive understanding of the state as ‘market enabler’, we highlight that remunicipalisations have often emerged in response to the failed promise of neoliberal capitalism to improve the quality and efficiency of public services through the (supposed) competitiveness of the free market. Like neoliberalism, remunicipalisations take spatially diverse and variegated forms as market-driven logics interact with other political and economic determinations. As such, remunicipalisations often encompass critiques of neoliberal governance and market volatility, and instead focus on the potential of regional wealth creation as well as stabilising local market dynamics through diversifying ownership forms. Drawing upon our ongoing empirical work on German remunicipalisation, we aim to foreground how multiple determinations at work in the German political economy at different spatial scales shape its particular trajectory out of neoliberal mutation. We show how the remunicipalisation of energy provider TEAG has enabled the local state to intervene and diversify the uneven economic geographies in the state of Thuringia.