Finance, Credit, Investments – Economical Categories


Scientific works in the theories of finances and credit score, according to the specification of the studies object, are characterized to be many-sided and lots of-leveled. The definition of totality of the least expensive relations shaped inside the system of formation, distribution and usage of budget, as cash sources is extensively spread. For instance, in “the overall theory of price range” there are definitions of price range:

1) “.Finances replicate cost effective members of the family, formation of the budget of cash resources, within the procedure of distribution and redistribution of country wide receipts in keeping with the distribution and utilization”. This definition is given surprisingly to the conditions of Capitalism, whilst cash-commodity family members gain well-known person;

2) “Finances constitute the formation of centralized advert decentralized cash resources, low-priced members of the family pretty with the distribution and usage, which serve for fulfillment of the nation capabilities and obligations and also provision of the conditions of the widened further manufacturing”. This definition is added without showing the environment of its movement. We share partly such rationalization of finances and assume expedient to make some specification.


First, budget triumph over the bounds of distribution and redistribution carrier of the country wide earnings, though it’s far a basic basis of budget. Also, formation and usage of the depreciation fund which is the part of financial area, belongs now not to the distribution and redistribution of the national profits (of newly shaped value in the course of a 12 months), however to the distribution of already evolved value.

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This today’s first appears to be a part of fee of fundamental business budget, later it’s far moved to the value charge of a ready product (that is to the fee too) and after its attention, and it is set the depression fund. Its supply is taken into account earlier than hand as a despair type inside the consistency of the equipped products cost fee. Second, main aim of budget is a good deal wider then “success of the kingdom functions and duties and provision of conditions for the widened further manufacturing”. Finances exist on the state degree and additionally on the manufactures and branches’ level too, and in such conditions, when the maximum part of the manufactures aren’t kingdom.

V. M. Rodionova has a extraordinary position about this concern: “real formation of the financial resources starts offevolved at the degree of distribution, while the value is found out and concrete low-cost varieties of the realized price are separated from the consistence of the income”. V. M. Rodionova makes an accessory of finances, as dispensing family members, when D. S. Moliakov underlines commercial foundation of finances. Though each of them deliver quite substantiate discussion of finances, as a gadget of formation, distribution and usage of the finances of cash assets, that comes out of the subsequent definition of the finances: “economic coins members of the family, which paperwork within the system of distribution and redistribution of the partial fee of the national wealth and overall social product, is associated with the topics of the financial system and formation and usage of the kingdom cash incomes and financial savings in the widened further production, in the fabric stimulation of the people for pride of the society social and different requests”.

In the manuals of the political economy we meet with the subsequent definitions of price range:

“Finances of the socialistic state represent low cost (coins) members of the family, with the help of which, inside the manner of deliberate distribution of the incomes and savings the budget of cash resources of the state and socialistic manufactures are fashioned for guaranteeing the growth of the manufacturing, rising the material and cultural level of the human beings and for pleasurable different standard society requests”.

“The machine of creation and utilization of vital funds of coins resources for guarantying socialistic widened in addition manufacturing represent exactly the price range of the socialistic society. And the totality of affordable relations arisen among the nation, manufactures and companies, branches, areas and separate citizen according to the movement of cash budget make economic relations”.

As we’ve got visible, definitions of finances made with the aid of financiers and political economists do now not fluctuate substantially.

In each discussed role there are:

  • 1) expression of essence and phenomenon within the definition of budget;
  • 2) the definition of finances, because the gadget of the creation and utilization of funds of coins assets on the level of phenomenon.
  • 3) Distribution of finances as social product and the value of national profits, definition of the distributions deliberate person, most important goals of the economic system and cost-effective members of the family, for servicing of which it is used.

If refuse the preposition “socialistic” inside the definition of budget, we may say, that it nevertheless keeps reality. We meet with such traditional definitions of finances, with out an adjective “socialistic”, within the current competitively priced literature. We may also deliver such an elucidation: “price range constitute cash sources of manufacturing and utilization, also cash members of the family appeared inside the procedure of distributing values of shaped low-cost product and country wide wealth for formation and in addition manufacturing of the coins incomes and savings of the cost effective subjects and kingdom, profitable of the workers and satisfaction of the social requests”. On this elucidation of price range like D. S. Moliakov and V. M. Rodionov’s definitions, following the traditional inheritance, we meet with the widening of the economic basis. They difficulty “distribution and redistribution of the cost of created not pricey product, also the partial distribution of the price of national wealth”. This contemporary may be very real, quite to the technique of privatization and the transition to privacy and is periodically utilized in exercise in different international locations, for example, Great Britain and France.

“Finances – are coins assets, monetary assets, their creation and motion, distribution and redistribution, utilization, additionally budget friendly relations, that are conditioned by intercalculations among the affordable subjects, motion of cash sources, cash movement and utilization”. “Finances are the gadget of affordable members of the family, that are related to the firm introduction, distribution, and utilization of monetary assets”.

We meet with truely innovational definitions of finances in Z. Body and R. Merton’s foundation manuals. “Finance – it is the technological know-how about how the humans lead spending `the deficit coins sources and incomes within the specific time frame. The monetary decisions are characterized through the expenses and earning which might be 1) separated in time, and a couple of) most often, it’s miles impossible to take them into consideration in advance neither with the aid of folks who get decisions nor another individual” . “Financial principle includes numbers of the conceptions… Which learns systematically the topics of distribution of the coins sources especially to the time component; it also considers quantitative fashions, with the help of which the estimation, setting into practice and awareness of the alternative variants of every financial choices take place” .

These simple conceptions and quantitative fashions are used at every degree of having monetary choices, however within the modern-day definition of budget, we meet with the subsequent doctrine of the economic foundation: most important feature of the budget is the pleasure of the humans’s requests; the topics of reasonably priced activities of any kind (companies, additionally kingdom organs of every degree) are directed towards satisfying this fundamental characteristic.

For the dreams of our monograph, it’s miles critical to evaluate well-known definitions about price range, credit score and investment, to determine how and how much it is viable to integrate the price range, investments and credit into the one total component. Some researcher issue that credit is the consisting a part of budget, if it’s miles mentioned from the position of essence and class. The other, extra numerous organization proves, that a cost-effective class of credit exists parallel to the cost-efficient category of budget, through which it underlines impossibility of the credit’s lifestyles in the consistence of budget.

N. K. Kuchukova underlined the independence of the class of credit score and notes that it’s far handiest its “function feature the became motion of the price, which isn’t related to transmission of the loan possibilities collectively with the owners’ rights”.

N. D. Barkovski replies that functioning of money created a cheap basis for apportioning price range and credit score as an unbiased category and gave upward thrust to the credit and economic family members. He noticed the Gnoseological roots of technology in money and credit score, as the technology about price range has enterprise with the studies of such not pricey members of the family, which lean upon cash glide and credit. Let’s talk the most spread definitions of credit score. In the modern-day guides credit regarded to be “luckier”, then budget. For instance, we meet with the following definition of credit in the finance-in your price range dictionary: “credit is the mortgage inside the shape of cash and commodity with the situations of returning, generally, by way of paying percentage. Credit represents a shape of motion of the loan capital and expresses in your price range family members between the creditor and borrower”.

This is the conventional definition of credit score. In the sooner dictionary of the financial system we examine: “credit is the machine of in your price range family members, which is formed at the same time as the transmission of cash and material means into the temporal utilization, almost always under the conditions of returning and paying percent”. In the guide of the political-economic system posted under discount of V. A. Medvedev the subsequent definition is given: “credit score, as a cost-effective class, expresses the created members of the family between the society, labour collective and workers all through formation and utilization of the mortgage funds, below the terms of paying present and returning, during transmission of resources for the temporal utilization and accumulation”.

Credit is discussed in the following manner in the sooner schooling-methodological manuals of political economic system: “credit is the device of cash members of the family, that is created within the method of using and mobilization of temporarily free cash manner of the kingdom price range, unions, manufactures, corporations and population. Credit has an objective individual. It is used for offering widened in addition manufacturing of the country and other wishes. Credit differs from budget with the aid of the returning character, whilst financing of manufactures and groups by way of the country is fulfilled with out this situation”.

We meet with the following definition if “the path of financial system”: “credit score is a cheap category, which represents family members, whilst the separate industrial corporations or individuals transmit money manner to every-other for temporal usage below the situations of returning. Creation of credit is conditioned with the aid of a historic procedure of pleasurable the low cost and money family members, the form of which is the money relation”.

Following scientists supply slightly exceptional definitions of credit:

“Credit – is a mortgage in the form of money or commodity, that is given to the borrower through a creditor below the situations of returning and paying the share rate via the borrower”. Credit is giving the temporally free money assets or commodity as a debt for the described phrases by using the price of fixed percent. Thus, a credit is the loan within the shape of money or commodity. In the technique of this mortgage’s motion, a precise relations are fashioned among a creditor (the mortgage is given by means of a juridical of bodily character, who offers positive coins as a debt) and the debtor. Combining each definition named above, we come to an idea, that credit is giving cash capital of commodity as a debt, for certain phrases and material provision beneath the charge of firm percentage price. It expresses specific affordable members of the family between the individuals of the technique of capital formation. Necessity of the credit score family members is conditioned, from one side, by using gathering strong quantity of briefly free cash resources, and from the second one side, lifestyles of requests of them. Though, at the same time we have to distinguish two such as ideas: loan and credit.

Loan is characterised through:

o Here, the discussion might also comment on transmission of money and also matters form one side (loaner) to some other (borrower): a)underneath the proudly owning of the borrower and, on the equal time, b) underneath the situations of returning equal amount or same amount and high-quality of the matters;

o The loaning of money may also bear no hobby;

o Any person may also participate in it. With the difference with mortgage, credit score, that’s by hook or by crook a non-public occasion of the mortgage, represents:

o One aspect (loaner) offers to the second (borrower) only money, and _ for temporal utilization;

o It might not undergo no hobby (if the task would not foresee something);

o In it creditor isn’t any person, however a credit score employer (at the primary region, banks). So, a credit score is the financial institution credit score. To our thoughts, it is not accurate to apply “credit score” and “mortgage” as the synonyms. Banking crediting is the union of relations between bank (as a creditor) and its borrower. These family members touch upon:

  • a) Giving a sure amount of cash to the borrower for precise cause (even though, we meet with the so-called unfastened credits, pursuits and items of crediting aren’t appointed in the mission);
  • b) Its opportune returning;
  • c) Getting percent fee from the borrower for the use of the resources beneath his/her disposal.

The vital basis of the credit essence and its critical detail is the existence of considering the two sides (in Latin “credo”, from which comes the phrase “credit score”, the way “accept as true with”). From the location of stream of money forms (inside the abstraction, historical procedure of formation reasonably-priced family members and social budget and banking structures expressed by using them) comparing exclusive definitions of budget and credit, the paradox end appears: credit is the private occasion of budget. And truely, from the position of motion of the money forms, price range represent the system of formation and usage of the price range of coins manner. Very frequently such movements are fulfilled without returning, but every so often, it is feasible to present loans from the finances for the investment projects of other wishes. Also, whilst a manufacture or businesses use their coins finances and we imply the budget of business challenge, such utilization can be found out as within the manufacture or enterprise (there may be no problem about returning or no longer returning of the utilization), so gratis below conditions of returning. This modern day is known as business shape due to transmitting the resources to others, however even in this occasion, it’s miles the detail of monetary machine of the manufacture and company.

From the point of coins means movement, main individual of credit is the process of formation and utilization of the budget of coins means below the conditions of returning and, regularly, taking the value-percentage. If gating the credit score value doesn’t take vicinity (even within the terrific occasions), consistent with the motion shape, credit becomes a private occasion of budget, as from the net monetary price range (therefore from the country finances) the loans which endure no pastimes can be used. If gating credit score value takes vicinity, by means of the appearance form, credit is discussed to be financial modification.


From the ancient factor of view, price range (in particular in the kind of the kingdom budget) and credit (beginning with usury, later commercial and banking) were growing otherwise for thinking about credit to be the part of price range. Though, from the genetic-historical factor of view, preceding loaners, earlier than giving loan, needed amassing the permanent capital now not returning, that is the internet financial basis. The banks analogously wanted awareness of the important very own capital for influxing the clients’ approach and for getting better percentage fee underneath the situations of returning. Herewith, precisely on the economic foundation, within the sort of economic fund (which later partially becomes mortgage fund) part of the financial institution capital seems to be the reservation (coverage) part of the fund, which by nature is economic and now not mortgage. So notwithstanding the critical differences between budget and credit score shape the genetic-historic factor of view, credit seems to be formed from finances and represent their amendment.

From the vital position of expressing low in cost members of the family of budget and credit score, we meet with cardinal distinctions among those two categories. Which in general expressed by means of the difference of the movement bureaucracy notwithstanding they’re returnable or now not. Finances express relations in the factors of distribution and redistribution of social product and a part of the country wide wealth. Credit expresses distribution of the appropriate value most effective in the phase of percent given for loan, at the same time as in step with the loan itself, a best a temporal distribution of cash assets takes region.

Herewith, there is lots of commonplace between the price range and credit score as from the essential factor of view, so in step with the form of movement. At the same time, there is a tremendous difference among budget and credit as inside the essence, so inside the shape too. According to this, there should be a type of normally affordable category, so one can remember price range and credit as a complete cohesion, and in the bounds of this category itself, the separation of the particular essence of the finances and credit score might take location.

Funding of the cash approach is common to the researched reasonably priced classes. It takes place in any separate system of price range and credit score, which have been touched upon at some point of the analyses of defining price range and credit. Word mixture “funding of the cash resources (fund formation)” reflects and defines exactly essence and shape of budget friendly category of greater general man or woman, those of price range and credit classes. Though within the in in your price range texts and exercise, it’s far very uncomfortable to use a termini, which consists of three words. Also, “unloading” with an information hardens significantly its influxing into the circulate even in the situations of its strict substantiation and thoroughness.
In the discussing context we don’t forget:

1) extensive and slender understanding of reasonably priced category of the budget;

2) discussing price range in slender knowledge below popular conventional which means;

three) discussing price range, as funding of the cash approach, in wide information, which issues price range – in narrow that means and credit score – in entire meaning. Termini “investment” and its equivalent “fund formation” are used by us as the practical structuring of cash manner, which is primarily based on poles – accumulation of money assets (collecting) and its utilization for definite cause within the way of financing and crediting.
We have mounted a new termini – “finance-investment sphere” (FIS). Analyses approximately interrelation of finances and credit score made via us provide us an opportunity of proving, that inside the given termini, the word “financial” is used with the that means of investment coins assets, its useful structuring. In this manner we bear in mind at the identical time monetary, credit and investments’ most economical categories.

Let’s sum up center effects of discussing the new idea – “finance-funding sphere” and discuss its funding consisting elements. The concept “investments” changed into delivered into the local comparatively cheap science from the West. In the Soviet economical technology they for a long term used within the region “investments” the termini “capital placement”, which expressed the usage of the commercial elements in the sphere of actual business sports during attention of capital initiatives. From one glance, this termini in its idea is same to the “investments”, therefore it is viable to use them as synonyms. Though the termini “investments” and “making an investment” have the advantage towards the termini “capital placement” from linguistic and philological factors of view, because they are expressed with one phrase. This is not most effective budget friendly and comfortable inside the procedure of running with the termini “funding” itself, but additionally it offers an possibility of termini formation. More concretely: “investment procedure”, “investment area”, “finance-investment sphere” – some of these termini are much more proper. Changing local reasonable termini with overseas ones is useful, if it clearly matters (through retaining parallel utilization of the native termini for the inheritance). Though we must no longer change native cost-efficient termini into foreign ones all together, whilst via ordinal conventional language smooth to give an explanation for personal and slim concrete procedures and factors get their very own termini. The “movement” of those termini is accredited in the slim expert bounds, however their “spitting out” into the low-priced technology may additionally turn cost-effective language into the tangled slang.

Let’s speak termini – “funding” and “capital placement’s” utilization in the competitively priced literature. Investments are placement of finances into the principle and move capital for the purpose of having income. “Investments in fabric property – are the placements of funds into the mobile and real estate (land, homes, furniture and so forth). Investments in financial belongings are the placements of budget into the securities financial institution debts and different financial units”.

We do not meet with the termini “investments” in the earlier reasonably-priced dictionary, however we meet the mixed termini “investment policy” – the union of the economic decisions, which guarantee important directions of the capital investments, the sports in their attention in the determinant suburbs, on which the attaining of deliberate rates of improvement of the society production is depended, balancing and effectiveness, getting increasingly manufacturing and profit of the national earnings for each lost Ruble”. For today, in the most actual definitions, the capital investments are bounded best through economic means, whilst no longer simplest monetary, however additionally the investment of herbal, cloth-technical and informational assets takes area. Labour assets take an real location within the investment method. They themselves satisfy this or that funding procedure.

  • A tremendous facet of the mentioned definitions is that they join funding policy and capital placements (investments):
  • – reasonably priced improvement according to the important thing instructions to the awareness;
  • – offering high quotes of reasonably priced growth;
  • – elevating a cheap effectiveness, which is expressed:
  • a) with the aid of developing the throw off of the production and national income for every lost Ruble;
  • b) by enjoyable the department shape of the investments;
  • c) with the aid of enhancing their technological structure;
  • d) by means of optimization in their further manufacturing shape.

Compared with such definition of the investments (capital placement) the definition of investments inside the dictionary attaching the “Economics” seems to be unimproved: “investments – the fees of gathering production and commercial means and growing material reserve”. In this definition modern prices (manufacturing prices) are blended with the funding (capital) price. Also, not the investment fees however (even though the investments are observed by means of the best charges) precisely advancing. It differs from the fees via that the way (method) are put by using returning the advanced values, additionally, underneath the conditions of increase, to which the concept-superior capital is corresponding. The advancing may be found out within the money, herbal-material and informational forms. Except the termini “investments”, there are two greater termini associated with the investment. They are proven beneath.

“Human capital funding” – any interest supplied for rising the people labour productivity (inside the manner of developing their qualification and developing their skills); at the costs of enhancing the people’ education, health and elevating the mobility of the operating forces”. It is very useful to use the cited termini, even though it desires one correction: the human capital investments do now not difficulty handiest workers, but additionally the servants, representatives of every sort of labour.
“Investment commodity, capital items – a capital.”

In the reliable manuals of political financial system of the reformation time the capital investments are mentioned as “charges for creating new foremost finances and widening, reconstruction and renewing the energetic ones”. In this definition the investments (capital placements) for the duration of separation of the bureaucracy (types) of further production of the primary budget are bounded simplest with the aid of major finances (without will increase the flow price range and coverage reserves):

a) creating new ones;

b) widening;

c) reconstruction;

d) renewing.

Also, the idea of the economic amassing appears, on the charges of a widening of primary, move funds and additionally coverage reserves takes location”. You’ll meet the definitions of investments from “the route of economy”: the investments are referred to as “placements of fund into the fundamental capital (primary manner of manufacturing), reserves, additionally different not pricey items and approaches, which request a lengthy-termed influx of fabric and cash method. “According to the division of capital into physical and cash bureaucracy, the investments too ought to be divided into cloth and coins investments”.

They apportion funding commodity, to which belong industrial and nonindustrial constructing gadgets, automobiles purposed for changing or widened technical park and the furniture, growing reserves and others. “They name the total investments of production an funding product, which is directed towards retaining and growing the simple capital (fundamental means) and reserve. Total investments include elements. One of them is known as the depreciation; it represents important investment resources for repayment of renewal till the extent of before industrial usage, wearing out and repairing of the primary approach. Second consisting part of the entire investments is represented with the aid of net investments – capital investments for the reason of growing primary manner”. Depreciation is not a compensation useful resource of wearing the simple budget out, however it is the useful financial source of such sources. Human capital investment is “a selected form of investments, usually in training and fitness safety”.

“Real investments are the investments in the reasonably-priced branches and also, they’re forms of least expensive activities, which give influx the will increase of actual capital, this is growing cloth values of the industrial means”. We can believe such definition with one specification that fabric and nonmaterial values too belong to the actual capital (wealth), therefore technology-discovering experimental-creation effects, various information, training of he employees and others. Such carrier as organisation of the excitable video games, also the provider of redistribution social wealth from one personal individual to every other (except charity).

“Financial investments constitute placement of finances into the shares, obligations, promissory notes, other securities and contraptions. Such investments, of path, do not give increases of the actual fabric capital, however they help getting profit, consequently at the fees of converting the direction of the securities within the time of hypothesis, or definition, therefore it follows that economic investments (if it isn’t always accompanied with the aid of real investments as a end result) do not increase real material wealth and real nonmaterial wealth. According to this context, the expression beneath is very vital: “we must distinguish monetary investments, which represent placement of the funds in the ways of promoting and buying the securities for the cause of having profit and monetary investments, which end up coins and real, moved to actual bodily capital.”

In the “affordable route” quoted earlier than lengthy and quick-termed investments are separated. Recognizing the life of the bounds between them, the authors ascribe quick-termed investments to “one month or greater” investments. If we get such conditioned standards, that we can call the investments which conquer the terms of a few months, long-termed ones, which may be very doubtful and we do not trust it. A long-termed man or woman of the fund placement is a significant feature of the investments (short-term does not integrate with the idea of investments). Principally, it would be better to point out quick compensative, center termed compensative and long-termed compensative investments:

  • – less then 6 months – short compensative;
  • – from 6 months as much as the year and a 1/2 – middle termed compensative;
  • – extra then the year and a half of – lengthy termed compensative.

We stopped on the definition of the investments in the capital work “inexpensive course” for the unique reason, as, in it, the writer tried to speak about the concept of investments systemically and pretty completely, herewith the e-book is published simply now. We’ll return to the dialogue the definition cost-effective class of “investments” in unique publications inside the following chapter. The definitions given here are pretty enough for having a belief of the level of lighting up the given category inside the comparatively cheap literature. What conclusions can be made in accordance the definition of the referred to cost-effective class in the posted works, except the made notions and specifications?

There is quite deeply, concretely and carefully described the idea of “investments”, one of a kind definitions within the comparatively cheap literature; however usually in every works approximately the investments mentioned by means of us until now, there is not opened the essence of investments as a cost-effective category. In each monograph , even though it has a name funding, as a cost-effective class , there’s given simplest the definition, concept of investments. But, as the Academician Vasil Chantladze explains, “a idea is a dialogue, which proves something approximately the distinguishing feature of the researched object. A concept out of a lot critical characteristic features represents simplest one, and vital in it’s far best – definition”.

But the categories are lots wider; it is “a key, the most fundamental idea of every technology”. Economical classes theoretically constitute actual, objectively existed productive members of the family. A class is the defining of events of existed characters, connections, family members of the goal world. Generally, any instructional method is fulfilled by way of the types, which provide opportunities for dividing the methods and activities semantically, for expressing the definitions of a topic and realize their unique peculiarities and reasonable relations of a cloth global. Our aim is exactly to substantiate investments – as a cost-effective class and additionally, as a monetary category inside the slender information.

Here we apply for some other manual thesis made via the academician Vasil Chantladze: “every economic relation is an economical one and every financial category is and cost effective one, however not each most economical relation and cost effective class is the financial relation and economic class”. In the method of defining the investments, it’s far crucial to soak up mind the perimeters of assets, expenses and incomes, because funding, from one aspect, is the end result of the manufacture’s hobby, and, from another one, – a part of profits, which, in this case, isn’t always used for usage.

Another occasion:

it is really useful to discuss investments in two components: as a category of reserve and drift, on the way to replicate precisely the connection between “placement of budget” and “investments”. As we’ve mentioned above, now not long in the past, in the famous Soviet literature the principles of “the location of funds” and “investments” were regularly occurring to be the synonyms and concerned to be investment of assets for in addition manufacturing of the principle finances and formation of the turnover price range. We meet with such information of the concept of “funding” (here, they separate three types of the investment expenses: investments in the basic capital of investments, investments in the residence building and investments inside the reserves) in the current cost-efficient courses and it’s miles usually used on the macro level at some stage in a statistical examine of low-budget methods. In this concrete occasion investment is the category of reserve.

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Harlan J. Whelan
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