Economic Systems
If, by the fifth power, what is meant is the economic system, it refers to the power that government exerts in the economic sphere through public companies and the mechanism of economic intervention, which is fundamentally financial. Historically, the relationship between power and economy has been defined within a narrow scope, primarily as the mercantilism of the Modern Age. However, since the U.S. stock market crash of 1929, four contemporary positions have emerged:
- Capitalism advocates a minimum or subsidiary state restricted to legislation which aids the effective function of the free market. This system, first proposed by Adam Smith, has gained ground in the spirit of globalization prevalent since the fall of the Berlin Wall.
- Socialism advocates common ownership and control of the means of production by the workers and of property in general and the construction of a planned economy.
- Fascism advocates a central, authoritarian style of economic intervention which is commonly defined as corporativism.
- Social democracy advocates government regulation of private enterprise and control over private competition, fair trade, progressive taxation, and public funding for government-subsidized programs. In this system, strategic sectors such as transportation, energy, and the military, can be controlled by the public sector.
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