Toward a New Financial Paradigm: A System-Activity Approach

This article argues that the dichotomy prevalent in modern financial theory between the domestic view of finance as "economic relations" and the Western view as "capital management" is a consequence of a fragmented understanding of the process itself. It is argued that the transition from the traditional understanding of financial activity and finance to a new paradigm requires a systemic representation of it, as a combination of cognitive and material activity. Finance is viewed as a virtual valuation of assets involved in economic circulation. This representation overcomes the discrepancy between traditional, fragmented understandings of financial activity and the general scientific principle of continuity. As a result, conceptual and universal graphical models of the process of activity and socioeconomic development with an anthropocentric focus have been constructed. From a scientific perspective, the obtained results advance economic theory and create the preconditions for the development of a wide range of research in new scientific areas. From a practical perspective, the research results will find wide application in education, as well as in the study of systemic financial risks.