"I don't consider government intervention in the market place ever to be effective or necessary. Any business is either worthwhile - in which case it will go ahead regardless of tax breaks - or not worthwhile, in which case the government has no business encouraging it."
This is just not true, and it does not promote useful debate when such a polarised view is adopted. As a business proposition, it is never going to be worthwhile to open public libraries in deprived areas - they just can't pay their way. It is never going to be worthwhile to carry out environmental improvements to farmland (as subsidised by REPS schemes and such like) because these improvements add nothing to farm profits. It is never going to be worthwhile to go into business in a market where there is a dominant player with deep pockets who can undercut you by selling below cost for long enough to put you out of business (a practice which government - by its interference in the market - makes illegal).
I'm not lobbying for anarchy nor am I pretending that
free markets are the natural order of affairs. Of course few private enterprises will engage in ventures considered to be unprofitable. However, charitable institutions, religious organisations or the government sometimes decide to fill that gap and fund an unprofitable venture they deem worthwhile from tax revenue or donations. So they build a library in a disadvantaged area. No harm done.
If the government decided that the reason for a dearth of private libraries in disadvantaged areas was that books were overpriced and took measures to force the price lower, this would be interfering with the market. It would also cause a shortage of books and a black market for books at the non-government set price. Similarly, if the government decided to incentivise private library building in disadvantaged areas by providing tax breaks to private library builders, this can only be seen as interfering and usually has unforeseen consequences (rampant over-building for one).
As for environmental improvements to farms being unprofitable, this is as a result of an externality. Polluting the environment - say publically held rivers, or the air, is a cost borne by everyone but the benefits (increased profit/production, lower cost etc.) are accrued directly by the farmer. Hence the incentive to pollute. The solution is simply to try and remove these negative externalities to avoid a "tragedy of the commons" effect, with regard the environment.
I am totally against any below cost selling bans (I thought these were no longer illegal?). The threat of a new entrant can often be enough to keep costs down even in cases where there is only one provider - Ryanair is a good example of this in practice.
The free market does not deliver effective policing. The free market does not deliver effective fire brigade services (though of course fire brigades were originally a private sector endeavour). The free market does not deliver universal education (though in fairness I have seen some well-reasoned arguments that it could). The free market does not deliver effective competition in many areas where it is clear that the greater good would be served by ensuring such competition.
I am of the personal perhaps unsurprising opinion that the government would be best getting out of the education game. The enforced one-size-fits-all solution provided is nothing short of barbaric. I've only every seen what could be described as a private police force in operation once when I lived in the US, and it seemed to work as well as any other. I'm not sure it is necessarily the most desirable prospect but I think it could be made to work. I'm not quite clear what you mean by "
the free market does not deliver effective competition in many areas where it is clear that the greater good would be served by ensuring such competition" - surely competition is always desirable? Perhaps you could illustrate with an example?
In short, is quite obvious that there are some markets where government intervention is both necessary and desirable. It is also quite obvious that there are markets where government intervention is neither necessary nor desirable. The 'government interference in the market' type issues which deserve reasoned debate may therefore be loosely categorised as being:
1. Markets where government do not interfere enough, and where it is argued that they should do more.
2. Markets where the government interfere too much and where it is argued that they should do less.
I'm not advocating the government should stand idly by while the Coca-cola factory arms itself and forces the residents of Louth to increase their Coca-cola consumption at gunpoint. The rule of law must be respected. However, the government has no business getting involved in price-fixing, or attempting to "direct" individual markets through taxation policy.