Origin of finance

The origin of the word "finance" has a fascinating history. In this case, as in so many others Aristotle provided a canonical definition of the word over two thousand years ago: "And statesmen as well ought to know these things; for a state is often as much in want of money and of such devices for obtaining it as a household, or even more so; hence some public men devote themselves entirely to finance.

Aristotle, Politics, Book I . Aristotle's definition was confined those involved with the financing operations of the Sate but a form of finance involving commercial maritime and other sorts trade lending flourished in the ancient world. The connotation of the word began to change over time as it migrated from Latin into Old French ("finaunce") and Middle English ("finance"). In France of the 1700's, the word began to have a vaguely negative sense as it was applied to the activities of those involved with Court Finance, the so-called "rentiers". These financiers were vilified by various social theorists because they were alleged to provide no tangible social benefit through their lending activities to the State. The Royalty of that era would not doubt beg to differ as they would not have been able to finance their endless wars without the rentiers. In England, an opposite pattern was seen with the connotation of the word as it quickly came to be associated with a prestigious activity. This happened because those engaged in the activity of Court Finance organized themselves politically in order to protect their interests against arbitrary royal confiscation. As was seen on a number of occasions the refusal of the financiers of the Court in England to offer new loans to a sitting monarch would force a royal succession. The sense of the meaning of the word finance expanded and became even more positive as the old class of Court Financiers expanded into the burgeoning area of trade and other commercial finance. As early as 1800 in the English speaking world, the word began to more or less congruent with the modern understanding of the term.