Economic Content and Concepts of Finance

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Domenii: Finante, Engleza

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1.1. Theoretical approaches concerning the concept of finance. In normal speech, and the literature, several expressions using the word finance: finance, public finance, private finance, finance and capital markets, etc.

The word “Finance” has a Latin origin. In the XIII and XIV centuries are used phrases like finatio, financias and financial precuniaris within the meaning of "payment in cash”. It is assumed that the expression derives from the word “finis”, often used in the meaning of "payment period". In France in the fifteenth century, it were used expressions like hommes de finances and financiers, to name tenants for taxes and those who received the king's taxes, finances means the entire heritage of state and finance mean income of the state. In Germany,in the XV - XVII centuries the Finanz expression is met , which means payment in cash, and Finantzer, which describe the usurer (broker, stingy). With time the word finances has acquired a very broad and deep sense, including the state budget, credit, banking and exchange operations, etc., id est resources, relationships and monetary operations.

The existence of Finance is closely related to existence of the state and use the money and all forms of value in national income distribution. Since the emergence of the first elements of finance - the point of intersection between social order and social order of the primitive civilizations - and so far, finances were part of the system of economic relations.

The fact that finances have appeared on a certain stage of development of the society, according to certain existing conditions and have evolved according to the permanent changes of initial conditions , reflecting their historic character.

The conditions that formed the basis and made possible the emergence and development of finance are: a) the emergence and development of commodity-money relations, so as to allow the formation and use of state resources in the form of cash;

b)state appearance, that required non existent resources in the previously existing relations to undertake it’s duties, tasks and obligations.

In this context there are two distinct phases in the evolution of the Finance concepts:

I stage - classical - corresponding pre-monopolistic capitalism.

II stage - modern concepts - Age of imperialism.

Classical concepts reflect the liberal doctrine, according to which business and economy should be conducted in accordance with the principle of laissez-faire, laissez-passer. The basic task of public finance is to ensure the necessary resources for maintaining the normal operations of public institutions; taxes, loans must have a neutral character; keeping the balance between revenue and expenditure was considered essential requirement keystone of public finances. The emergence of budget deficits, that generates inflation , was seen as an unwanted phenomenon.

At this stage, of policeman state(stat jandarm), when prevailing doctrine was that of economic liberalism, the conception of finance has a highly legal and juridical character.

After the great world economic crisis of 1929 - 1933, according to some economists, in the place of state-policeman comes the welfare state, which broadens the scope of concerns. In connection with the economic activity of the state it is asserting the interventionist conception, where the public authority plays an important role. This change of position resulted in deepening external and internal contradictions of the capitalist mode of production.

For the modern state, public finances are a means of intervention in the economy. In the modern approach to public finances, according to some contemporary economists ,prevails the economic concept, the others - sociological concept.

In all the social- economic orders were finances existed, it have come as social relations,of economic nature, occurring in the distribution of national income, in close connection with the performance of state functions and tasks. In that four social economic orders , finances took the form of value, money, but, in each order, they have met a certain role.

In the process of obtaining and allocating the resources the state needs to fulfill it’s duties and obligations, there are born some social relations in society. These relations are of an economical nature and express the distribution of a part of the gross domestic product (GDP), through the state, between different social categories. These relations, arising in the process of mobilizing and allocating the necessary resources of the state, in the form of money, are the financial relationships or, in short, finance.

In present the word "finance" has become more broadly, including , besides the state budget and local budgets, banking and stock exchange, trade and compulsory ,voluntary insurance of goods and people. In other words, finances should cover all economic and social spheres whose relations can be quantified by money.

When we approach the problem of "finance" in general, we agree to include within this concept and credit, private finance, insurance, and when we refer to the concept of "public finance" we should include only those relations which arise between the state, on the one hand, and its members, as taxpayers on the other hand, but also a public and semi-public beneficiary , sometimes monetary resources in a direct way.

In approaching the concept of finance is necessary to distinguish between public finances, which are associated with state, administrative unities and other institutions of public law, aimed at meeting the general interests of society members, and private finance, which are associated with enterprises, banks, insurance companies etc and their financial resources are intended for producing goods and services, for a profit.

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Alte informatii

Tema la Finante in limba engleza despre asigurari prezentata la universitatea ASEM, Republica Moldova