Government has a limited set of tools to work with. For every carrot a government provides, it must somewhere obtain that carrot through the use of stick.

Government operates with the assumption that all resource managment is a zero sum game.

The free market assumes that new and greater value and resources can always be identified and cultivated.

Any "mixing" of these two polarized approaches yields varying degrees of success, but make no mistake, these two ideals are absolutely in opposition to each other. :)