The Emergence of Finance and the Development of Financial Science.

Finance is the study of specific production relations caused by the development of commodity-money relations and the existence of the state.

Finance is present in all socio-economic formations, conditioned by two circumstances: a) the presence of the state; b) the development of commodity-money relations. In each formation, finance has its own distinctive features, including its social essence, role in social production, the form of financial relations, and so on.

Many economists believe that financial relations arose with the emergence of the state (or more precisely, with the formation of the state's material base) and were created through compulsory levies in kind. However, in the era of the preferential extraction of the social product in kind, there were no commodity-money relations in society, and the state did not perform economic distribution functions; i.e., there was no distinction between state resources and those of the head of state. Once this occurred and state revenues and expenditures were separated from the sovereign's treasury, the formation and use of the national monetary fund were placed under strict government control. Finances became the expression of monetary relations, and taxes and loans emerged as the decisive source of state revenue.

Historically, the emergence of finance is characterized, firstly, by the development, strengthening, and expansion of commodity-money relations; secondly, by the strengthening and expansion of state functions. In the era of free competition, finance acquired qualitatively new patterns compared to previous eras: the need for the state to perform its economic function, associated with the redistribution of resources, their allocation to ensuring the most efficient structure of social production, and the development of non-production infrastructure, increased.

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