4. The Emergence of Finance and the Development of Financial Science.

 To summarize, click, we can conclude that finance is a historically established economic category, the initial condition for its emergence being commodity production mediated by monetary relations.

 The creation of surplus product in the sphere of production and its subsequent distribution served as the financial nucleus and the beginning of financial relations.

 The normal reproduction process can only be ensured through the primary distribution of surplus product and its use to replenish the expended portion of the means of production and the cost of labor. This circulation of funds can be accomplished without state participation, i.e.,

 surplus product, and not the state (as some researchers believe), serves as the basis and origin of finance.

 Thus, the historical conditions for the emergence of finance are:

1) commodity production;

2) the mediation of commodity production by monetary relations;

3) the presence of a process of primary distribution of the created social product and its component—profit.

 Historically, it is the surplus product that is the object of financial relations.

 The objective nature of financial relations with the state is already secondary, redistributive, and related to the state's performance of its functions.

 We can distinguish: a) the period of the emergence of financial relations in general; b) the moment of the emergence of public finance.

 The period of the emergence of financial relations in general is associated with the onset of commodity-money relations and the development of the process of the primary distribution of the value of the social product: the cost of expended means of production was reimbursed, wages were paid to workers, and surplus product was generated. (It is the surplus product, or that portion of the total social product that constitutes society's net income, that is used to expand production and create a centralized state monetary fund.) Surplus product is initially the object of financial relations without state participation.

 The emergence of public finance should be viewed as a stage in the redistribution process involving the surplus product already created in social production.

 The development of financial relations occurred alongside the evolution of society, from simple to more complex. Commodity production was the starting point in this dialectical interaction. But in a natural economy, none of the stages of commodity movement were financial. Only with the emergence of money did the production and movement of social goods become mediated by monetary relations. Surplus product formed the basis of both the reproduction process and the creation of a centralized state monetary fund.

 With the emergence of the state, financial categories such as taxes emerged. As the state and the commodity-money economy developed, groups of more complex categories emerged—state revenues and expenditures—and, based on them, the state budget, insurance, and state credit. Financial relations in these links of the financial system assumed the nature of the redistribution of the surplus product created in the sphere of production. They are derivative and dependent on the finances of the sphere of material production.

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