The Return of the State?

Abstract

Massive government-financed rescue operations for banking and insurance industries in the United States and in Europe, seeking to contain the financial crisis that culminated in 2008, amounted to ‘the biggest, broadest and fastest government response in history.’1This ‘great stabilisation,’ asThe Economistcalled it, resulting in ‘quasi’ or ‘shadow nationalization,’2cast doubt on the notion, fashionable at the height of the neoliberal wave, that the state was essentially on its way out, as many of its tasks and responsibilities were oozing steadily and irreversibly toward the market. The state and, by the same token, the political seemed back – with a vengeance, triggering solemn announcements of ‘the return of the state’ and ‘the end of the ideology of public powerlessness.’3Observers concurred. ‘Free-market capitalism, globalization, and deregulation’ had been ‘rising across the globe for 30 years,’ yet that era now had ended: ‘Global economic and financial integration are reversing. The role of the state, together with financial and trade protectionism, is ascending.’4Triggering a perceived ‘paradigm shift towards a more European, a more social state,’ even in the United States and in China, the crisis was seen to herald a move ‘back towards a mixed economy.’5The question, meanwhile, remained: had the state indeed withdrawn as much during the neoliberal era as is often assumed?