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In Adam Smith’s conception, it is the ‘invisible hand’ of the free market that organises the seemingly chaotic and self-interested activities of human beings into a beneficent and productive social order. For Milton Friedman, ‘the organisation of the bulk of economic activity through private enterprise operating in a free market’ is ‘a necessary condition for political freedom.’ 15. In its daily operation, a free market serves three main purposes. It manages resource allocation by supplying answers for buyers and sellers to the basic economic questions of what, how, and for whom goods and services are to be produced. It provides price discovery by channelling competition and adjusting prices to reflect changes in supply and demand for different commodities. And specifically in terms of money, it arranges financial intermediation by matching the needs of ultimate lenders – or those in possession of surplus loanable funds – with those of ultimate borrowers – or those in need of liquid funds: interest rates, which are determined by the supply and demand of liquidity in the loanable fund market, play a crucial role in this process. BIS Review 35/1999  4  16. The philosophers are agreed that, in general, the less a government has to do with these various functions, the more efficiently the market can do its job: centralised, directive authorities, or ‘big government’, are anathema to true economic freedom; governments should, at most, play a minimal, instrumental role in fostering the conditions in which each individual has the freedom to make his or her own economic choices.