This post from Stephen Franks points to a real problem with the possibility of a liberal, neutral state with a substantial role to play:
I’m glad the ban [on Federal funding of stem cell research] has been reversed, though I think that not spending a fervent minority’s tax money on something they believe to be wicked can be a legitimate compromise, as long as the research itself is not banned.
Stephen also mentions the superstitious concerns of anti-GE environmentalists and Maori (the native people of New Zealand) spiritual types affecting policy. I have no problem calling these people superstitious and don’t think they should be able to impose their beliefs on me. Of course, we can’t just legislate against superstitious concerns affecting policy, since the evaluation of whether a belief or value is mere superstition can only be subjective. I find reverence of the ‘natural’ and belief in omnipotent invisible friends absurd, but accept that others feel similarly about my reverence of the ‘voluntary’ and belief that humans are unusually intelligent apes. Unless some agent is given the authority to legislate truth, there is no way to eliminate superstition from government decision-making.
Liberalism minimally requires that the state remain neutral between competing conceptions of the good life, which each include a combination of descriptive and normative claims. When the state does anything, it is implicitly favouring some conceptions of the good life over others. Federal funding of stem cell research favours a scientifically orientated worldview over the religious, and I find it fairly objectionable that people are forced to contribute to activities they find immoral. Of course, funding other medical research but not that involving stem cells favours the religious worldview over the scientific: public research presumably crowds out private and thus reduces total stem cell research. When government does a lot, the refusal to engage in one activity favours the alternative.
Any state action is subject to collective choice: one decision must be reached for all. Consequently, every sphere in which government intervenes becomes politicized. When the government funds medical research, the debate around bioethics becomes much more salient, because each person is arguing for how we, rather than I or one, should behave. It is impossible to live and let live when we must act jointly, since the majority will have its way and the minority will be forced to comply. In most cases, a neutral position will not even exist in theory, nevermind be the result that actually emerges.