Finances reflect economical relations, formation of the funds of money sources, in the process of distribution and redistribution of national receipts according to the distribution and usage

1. Derek Siewert - Finance, Credit, Investments - Economical
Categories
Scientific works in the theories of finances and credit, according to the specification of the
research object, are characterized to be many-sided and many-leveled.
The definition of totality of the economical relations formed in the process of formation,
distribution and usage of finances, as money sources is widely spread. For example, in "the
general theory of finances" there are two definitions of finances:
1) "Finances reflect economical relations, formation of the funds of money sources, in the
process of distribution and redistribution of national receipts according to the distribution
and usage". This definition is given relatively to the conditions of Capitalism, when cash-
commodity relations gain universal character;
2) "Finances represent the formation of centralized ad decentralized money sources,
economical relations relatively with the distribution and usage, which serve for fulfillment of
the state functions and obligations and also provision of the conditions of the widened
further production". This definition is brought without showing the environment of its
action. We share partly such explanation of finances and think expedient to make some
specification.
First, finances overcome the bounds of distribution and redistribution service of the national
income, though it is a basic foundation of finances. Also, formation and usage of the
depreciation fund which is the part of financial domain, belongs not to the distribution and
redistribution of the national income (of newly formed value during a year), but to the
distribution of already developed value.
This latest first appears to be a part of value of main industrial funds, later it is moved to the
cost price of a ready product (that is to the value too) and after its realization, and it is set
the depression fund. Its source is taken into account before hand as a depression kind in the
consistence of the ready products cost price.
Second, main goal of finances is much wider then "fulfillment of the state functions and
obligations and provision of conditions for the widened further production". Finances exist
on the state level and also on the manufactures and branches' level too, and in such
conditions, when the most part of the manufactures are not state.

2. In the manuals of the political economy we meet with the following definitions of
finances:
"Finances of the socialistic state represent economical (cash) relations, with the help of
which, in the way of planned distribution of the incomes and savings the funds of money
sources of the state and socialistic manufactures are formed for guaranteeing the growth of
the production, rising the material and cultural level of the people and for satisfying other
general society requests".
"The system of creation and usage of necessary funds of cash resources for guarantying
socialistic widened further production represent exactly the finances of the socialistic
society. And the totality of economical relations arisen between state, manufactures and
organizations, branches, regions and separate citizen according to the movement of cash
funds make financial relations".
As we've seen, definitions of finances made by financiers and political economists do not
differ greatly.
In every discussed position there are:
1) expression of essence and phenomenon in the definition of finances;
2) the definition of finances, as the system of the creation and usage of funds of cash
sources on the level of phenomenon.

3. 3) Distribution of finances as social product and the value of national income, definition of
the distributions planned character, main goals of the economy and economical relations,
for servicing of which it is used.
If refuse the preposition "socialistic" in the definition of finances, we may say, that it still
keeps actuality. We meet with such traditional definitions of finances, without an adjective
"socialistic", in the modern economical literature. We may give such an elucidation:
"finances represent cash resources of production and usage, also cash relations appeared in
the process of distributing values of formed economical product and national wealth for
formation and further production of the cash incomes and savings of the economical
subjects and state, rewarding of the workers and satisfaction of the social requests.
These basic conceptions and quantitative models are used at every level of getting financial
decisions, but in the latest definition of finances, we meet with the following doctrine of the
financial foundation: main function of the finances is in the satisfaction of the people's
requests; the subjects of economical activities of any kind (firms, also state organs of every
level) are directed towards fulfilling this basic function.
For the goals of our monograph, it is important to compare well-known definitions about
finances, credit and investment, to decide how and how much it is possible to integrate the
finances, investments and credit into the one total part.
Some researcher thing that credit is the consisting part of finances, if it is discussed from the
position of essence and category. The other, more numerous group proves, that an
economical category of credit exists parallel to the economical category of finances, by
which it underlines impossibility of the credit's existence in the consistence of finances.
Credit is discussed in the following way in the earlier education-methodological manuals of
political economy: "credit is the system of money relations, which is created in the process
of using and mobilization of temporarily free cash means of the state budget, unions,
manufactures, organizations and population. Credit has an objective character.
It is used for providing widened further production of the state and other needs. Credit
differs from finances by the returning character, while financing of manufactures and
organizations by the state is fulfilled without this condition".
We meet with the following definition if "the course of economy": "credit is an economical
category, which represents relations, while the separate industrial organizations or persons
transmit money means to each-other for temporal usage under the conditions of returning.
Creation of credit is conditioned by a historical process of fulfilling the economical and
money relations, the form of which is the money relation".