The return of the state and public ownership

The collapse of Lehman Brothers in 2008 and the ensuing global financial and economic crises has prompted a wave of nationalization and more generally state interventions of an unprecedented degree. While some have argued that this comeback of the state will be of a temporary nature, recent developments in a variety of countries, form liberal market economies (for example, the UK) to organized capitalism (read Germany) suggest a different path. Most surprisingly, at least for the orthodox (German) economists, is the announcement of a new German industrial policy, including active state intervention in the stock market to avoid unfriendly (read Chinese) takeovers as well as promoting European and national champions in close collaboration with France (Zettelmeyer, 2019). Equally, the set of European fiscal rules which originated in Berlin that are co-shaping the austerity states and hence, restricting efficient public investment in the foundational economy in Europe, are called into question by the ones promoting these rules a decade ago (Financial Times, 2019). Beyond the already well-known cases of remunicipalization in water and energy (Wollmann, 2016; Kishimoto and Petitjean, 2017), a new push for affordable housing is being articulated across Europe and will likely strengthen via a new European Citizen Initiative (Housing for All, 2019). The recent announcement of a local referendum on the expropriation of large housing companies such as Deutsche Wohnen in Berlin is reflective of the need to tackle rising housing prices and decreasing housing affordability. In short, it appears that the state is here to stay.

However, the state has always been there, in particular in its key roles as regulator and financier. What most citizens experienced was a retreat of the third important role, namely, of direct provision by the public sector as a result of various forms of depublicization (ranging from outsourcing over public–private partnerships to fullblown privatization). This clearly differed from the previous period after the Second World War where large centralized state-owned enterprises (SOEs) had become important policy tools for steering the economy beyond fields of the foundational economy, including for R&D (research and development) and industrial policy (Millward, 2011).