Even the freest market sometimes needs government involvement to enable it to function effectively, although the extent and nature of that involvement is a matter of intense debate.

This was the message from Monetary Authority Chief Executive Joseph Yam in the latest posting of Viewpoint, on the authority's homepage.

Mr Yam said the free market is a simple theoretical argument based on many assumptions that, in practice, may not prevail or may even be far from the true situation.

And so, in practice, we do have free market results in which clearly the welfare of society is not maximised, he said - to the extent that the involvement of the government is required.

Hopefully, however, the objective and form of such involvement can be clearly articulated and justified, and not distorted by political or other lobby of self-interest, Mr Yam wrote.

He concluded that whether it is market oversight to ensure competitive fairness, or control against excessive monopolistic profits, or the protection of those not in a position to protect themselves, or assuming the role as an outright supplier, the intellectual justifications are essential if we do not wish the free market philosophy to be easily compromised.