Philosophy generally approaches economics as a moral science. It analyses the current state of science and its abstract values pursued by economists and methodologists. Economic philosophy is also concerned with questions of welfare and rationality as well as with the nature of social phenomena. Throughout the history of economy and trade, the most progressive philosophers tried to explain the correlation between retailers and consumers.
The free market economy was discovered yet in the eighteenth century by classical philosopher Adam Smith. He concentrated mainly on the relations within society and noticed how craftsmen and consumers successfully interacted with each other. Businesses knew which amount of goods they shall produce to satisfy their consumers. Smith called this mechanism the “invisible hand” which makes the market function. The philosopher had researched the labor market and drawn conclusions concerning the accumulation of wealth in businesses and growth of productivity in the labor.
Positive views on capitalism and free marked expressed by Adam Smith were dismissed by Karl Marx, the German philosopher of the nineteenth century. According to Marx’s views, the capitalist model of society is detrimental and will inevitably result in a revolution of the working class. Unlike Smith, Marx saw exploitation of labor in the relations between business people and their employees which can benefit to the society only on the short-term scale.
Views of notable British economist John Keynes concerned the role of the government in stimulating the free market, and they were greatly appreciated during the Great Depression. The temporary collapse of economy demanded urgent actions, and Keynes proposed to provide jobs for people who ended up unemployed. The role of governmental spending was huge and it helped to boost the economy as fast as possible.