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"Municipal socialism" has been used to describe public ownership of streetcar lines, waterworks, and other local utilities, as was favored by "Progressives" in the United States in the late 1890s/early 1900s. The term Sewer Socialism was also used to describe the pragmatic reformist policies of Emil Seidel, Daniel Hoan and Frank Zeidler, Milwaukee's three Socialist mayors in the 20th century.
A chapter on "municipal socialism" appears in Class in America: an Encyclopedia:
The heyday of municipal socialism is generally considered to have been from 1901 to 1917...In 1911 there were seventy-three Cities with socialist mayors, and over 1,200 other socialist elected officials across the nation.
The term "municipal socialism" has been used to describe the local government-led social reform developed in the United Kingdom. This includes the reforms initiated by Joseph Chamberlain as mayor of Birmingham between 1873 and 1875. These reforms included rendering gas and water supplies public services, controlled by the government, clearing slums and the introduction of a city park system. Chamberlain's reforms were influential on Beatrice Webb, one of the leaders of the Fabian movement.
Beatrice Webb's husband, Sidney Webb, wrote in Socialism in England, published in the 1890s:
It is not only in matters of sanitation that this 'Municipal Socialism' is progressing. Nearly half the consumers of the Kingdom already consume gas made by themselves as citizens collectively, in 168 different localities, as many as 14 local authorities obtained the power to borrow money to engage in the gas industry in a single year. Water supply is rapidly coming to be universally a matter of public provision, no fewer than 71 separate governing bodies obtaining loans for this purpose in the year 1885-86 alone. The prevailing tendency is for the municipalities to absorb also the tramway industry, 31 localities already owning their own lines, comprising a quarter of the mileage in the Kingdom.
The Fabians were influential in the London County Council and London School Board, as well as in some other local authorities, through the newly formed Labour Party. A more radical expression of the municipal socialist movement was Poplarism in Poplar, east London, led by George Lansbury.
More recently, the term refers to the attempts in the 1980s in British cities by hard left activists in the British Labour Party to win control of local authorities and use them to develop left-wing policies on a local level, in opposition to Margaret Thatcher's right-wing Conservative central government. Examples include the Greater London Council under "Red" Ken Livingstone, Lambeth council under "Red" Ted Knight and Linda Bellos, Liverpool council under Derek Hatton and Sheffield council (sometimes referred to as "the People's Republic of South Yorkshire") under David Blunkett. These authorities were often derided as "loony left" by Conservative supporting tabloid newspapers.
Recently, municipal socialism has seen a comeback in the city of Preston: which was brought to notoriety by The Economist's piece on the topic.  The [[New Statesman]] has also called the policies of the town "new municipalism" and "community wealth building" alongside that of municipal socialism. Both The Economist and New Statesman tie the projects to Jeremy Corbyn's leadership of the Labour Party. 
The bourgeois intelligentsia of the West, like the English Fabians, elevate municipal socialism to a special “trend” precisely because it dreams of social peace, of class conciliation, and seeks to divert public attention away from the fundamental questions of the economic system as a whole, and of the state structure as a whole, to minor questions of local self-government. In the sphere of questions in the first category, the class antagonisms stand out most sharply; that is the sphere which, as we have shown, affects the very foundations of the class rule of the bourgeoisie. Hence it is in that sphere that the philistine, reactionary utopia of bringing about socialism piecemeal is particularly hopeless.
"Municipal socialism" became an avenue that Labour used to retain the allegiance of the new labour aristocracy from the public sector. Many jobs and ‘non-jobs’ were given to this already privileged layer as the left feathered its own nest. Spurious community groups, housing schemes, race relations and ethnic minority units for tiny privileged layers of black and Irish people were set up and paid for. They were all designed to foster the interests of those who found jobs and funding through them, with little benefit to those who were really suffering the onslaught of Thatcherism. Even when "municipal socialism" took on a popular and widely supported position, its limitations were quickly exposed. The Fare's Fair dispute of 1982 showed this at an early stage, after the Law Lords overruled an attempt to introduce cheap fares on London transport, and Ken Livingstone's Greater London Council did not make a serious fight of it. In reality, Thatcher destroyed "municipal socialism" by continually restricting local democracy and the rights of local authorities to raise and spend money.