Finance and Its Society Development Role

The term “finance” appeared around the 13th century. He associates with the average Latin term “finance”, which in translation means obligatory payment of money to a citizen of his ruler (prince, king, monarch, etc.). These funds came at the disposal of the ruler and spent by him at his discretion on the maintenance of institutions of power (the army, the police) and other expenses of state maintenance.

Payment of money to the government often accompanied by coercion, therefore in some countries, for example, in Germany; the term “finance” was used among the population in a negative sense. It used when it was about extortion, bribery.

Finance Development Details

Therefore, the prerequisites for the emergence of finance are the states with a high level of development and development of economic relations, which can be regulated and regulated. Therefore, with the natural management of the economy, during the period of the primitive communal system, there is an acute need to regulate economic relations not connected with a poorly developed economic system.

Virtually all needs were met, as a rule, when using them, in the presence of a closed cycle of social production. Therefore, it is not necessary to talk about finance during this period.

With an increase in labor productivity, which will result in improved tools and tools that have arisen if there is an equal exchange of the products of labor that can be used to ensure such exchange and the regulatory process. The invention to meet this need has become the means necessary to improve the efficiency and effectiveness of the economic life of society.

They ensured the existence of the state: the supreme power in the person of the head of state the monarch, the king, the president, who organized the normal life of the population; The judicial power that ensured the rule of law; The troops that protect the population and state borders from external encroachments. Actually, from this time begins the development of finance.

The role of the term finance in the development of society

In the conditions of a market economy, the sphere of mutual relations of each member of society with the state expands. Such relationships occur on the flow, when they are used. Therefore, the need for highly effective knowledge and skills is growing. Financial science received a higher development and separated into an independent field of knowledge.

In the current conditions of economic and social development, when the functions of the state have significantly expanded and improved, and commodity money relations have begun to play a leading role in public life, finance has reached its highest development. Formation and use of financial resources takes place on a legal basis. They are subject to control by the economic structures of society.