17.1 Introduction
With the rise of liberalism as a theory of the welfare state in the 20th century, state functions increased manifold. The fight for classical liberalism was not given up, however. After the Second World War, theorists whose allegiance lay with early classical liberalism produced a new movement known as Libertarianism, which became popular in the USA and England in the 1960s.
The libertarian movement received large-scale academic attention with the appearance in 1974 of Robert Nozick’s Anarchy, State and Utopia (Harvard philosopher), frequently bracketed with Rawls’s A Theory of Justice. It influenced the Thatcher/Reagan administrations of the 1980s.
Etymologically: libertarianism means free will or free advocacy of liberty. It is the most radical form of individualism and advocates pure capitalist economy as the surest expression and defence of individuality.
Why a new term? According to Martin Masse: liberalism since the end of the 19th century took up a new meaning — in the UK, liberal parties are only a little more moderate than socialist parties in using state power; in the USA, a “liberal” became a left-winger advocating wealth redistribution and supporting big government that taxes, spends, and creates bureaucratic programmes. This “liberalism” aims at creating a tyrannical state that tramples on individual freedom in the name of collectivist utopia — it has nothing to do with classical liberalism. Libertarians are more coherent and radical than traditional liberals in their defence of personal liberty, market economy, and opposition to state power.
17.2 What is Libertarianism?
Libertarianism takes the idea of liberty to its extreme, proposing to make liberty the only interest that a state may properly have with respect to its citizens.
Key exponents: F.A. Hayek, Karl Popper, Talmon, Milton Friedman, Isaiah Berlin, M. Rothbard, Robert Nozick, Ayn Rand.
Core beliefs:
- Individual freedom is the fundamental value underlying all social relations, economic exchanges, and the political system.
- Voluntary cooperation between individuals in a free market is always preferable to coercion exerted by the state.
- The role of the state is not to pursue collective goals — not to redistribute wealth, “promote culture,” “support agriculture,” or “help small firms.” The state should limit itself to the protection of individual rights.
- Supports formal equality before the law, but worries little about inequalities between rich and poor — such inequalities are inevitable and can only be reduced by encroaching on personal freedom and reducing overall prosperity.
- The best way to fight poverty is to guarantee a system of free enterprise and free trade, and let private charity (more effective and morally better justified than state wealth-transfer programmes) come to the rescue.
- The only way to ensure personal freedom is to guarantee the inviolability of private property and limit as much as possible the size of government and the scope of its interventions.
- Opposed to collectivist ideologies of all types — left or right — that stress the primacy of group, nation, social class, ethnic group, or religious community. It is up to individuals themselves to determine which groups they wish to belong to.
Two types of libertarianism:
| Type | Position |
| Anarcho-capitalists | Advocate complete disappearance of the state and privatisation of even basic state functions — including police (replaced by private security agencies), army, and courts. Private firms would provide all services individuals need in a pure free market |
| Minarchists | Maintain that government may appropriately engage in police protection, enforcement of contracts, national defence, foreign relations, justice, and protection of private property and individual rights. All remaining functions should be privatised |
17.3 Political Theory of Libertarianism
Key concepts of libertarian political theory have roots in ancient China, Greece, and Israel — developed by 17th–18th century thinkers (Locke, Hume, Adam Smith, Jefferson, Paine) and reinvented in the 20th century by neo-liberal thinkers (Oakeshott, Hayek, Milton Friedman, Robert Nozick).
17.3.1 Individualism
Libertarianism sees the individual as the basic unit of social analysis. Only individuals make choices and are responsible for their actions. It emphasises the dignity of the individual — entailing both rights and responsibility.
Libertarianism is the most radical form of individualism short of outright anarchism — sometimes described as “anarcho-capitalism.” The near-anarchism of some doctrines is qualified by the fact that the libertarian defence of capitalism would legitimise a degree of economic inequality that true anarchists could not abide.
Ayn Rand — leading expression of the libertarian ideal of individualism (though sometimes extreme and unrepresentative):
- The individual is the basic unit of society, the prime focus of moral concern, and the sole source of human creativity.
- The root cause of modern troubles is altruism — the moral position that man should place the welfare of others above his own — which destroys the supreme value of individuality.
- Altruism is a vice; selfishness is a virtue — not petty self-indulgence but accepting full personal responsibility for one’s life and fate.
- Altruism plays upon the morbid guilt feelings of the donor and keeps the recipient in a state of childish subservience. The ethics of altruism is always gratuitous — it preaches that someone has a prescriptive right to a free ride on someone else’s back.
17.3.2 Individual Rights and Liberty
Central to libertarianism: the individual should be free from the interference of others. Personal liberty is the supreme moral good. One’s liberty can justifiably be restricted only if one consents to the restriction.
Each individual has natural negative rights — at least to life, liberty, and property. No one can justifiably harm, restrict freedom, or take property without consent. These rights apply against the whole world — all people in the world have the correlative duty not to interfere with the right-holder’s life, liberty, and property. Rights are inherent in the nature of human beings — not granted by the government or society.
Distinction between negative and positive rights:
- Negative rights: only require others to refrain from action (e.g., “do not kill the right-holder”).
- Positive rights: would also require others to do something to help (e.g., actively save the right-holder’s life).
Libertarians hold that people have no basic positive rights — all positive obligations must be voluntarily assumed. Nozick: “Side constraints (equivalent to negative general rights) upon action reflect the underlying Kantian principle that individuals are ends and not merely means; they cannot be sacrificed or used for achieving other ends without their consent.”
Liberty is defined as negative liberty — absence of imposition by other people, specifically those impositions caused by intentional actions. This echoes:
- Hobbes: “absence of external impediments”
- Locke: “not harming them in respect of life, health, liberty or property”
- Kant: “acting only on maxims that can coexist alongside the freedom of the will of each and all”
- Rawls: “each person has an equal right to the most extensive basic liberty compatible with a similar liberty for others”
The natural baseline for liberty is one’s own body — the right of self-ownership. Each person would be regarded as “owning himself” — able to do what one wants with oneself, while needing others’ consent before acting upon them. For libertarians, liberty is not a value but a condition of action — a necessary condition for acting at all.
A sufficient reason to reject any moral rule or principle of distributive justice is that it restricts someone’s freedom without his consent. Hence Hayek rejects plans to expand government and Nozick’s primary objection to Rawls is that Rawls’s two principles restrict individual liberty without consent.
17.3.3 Civil Society
Order in society need not be imposed by a central authority — the great libertarian insight is that order in society arises spontaneously, out of the action of thousands or millions of individuals coordinating with others to achieve their purposes.
The most important organisations in human society — law, language, money, and markets — all developed spontaneously without central direction. Civil society is another example of spontaneous order.
Civil society = all natural and voluntary associations in society: family, churches, schools, clubs, fraternal societies, condominium associations, neighbourhood groups, partnerships, corporations, trade unions, and trade associations. The key characteristic is that participation is voluntarily chosen. The associations within civil society are created to achieve particular purposes, but civil society as a whole has no purpose — it is the unintended, spontaneously emerging result of all those purposive associations.
Ernest Gellner: modern civil society requires “modular man” — instead of a man entirely absorbed by a particular culture, modular man “can combine into specific purpose, ad hoc, limited associations, without binding himself by some blood ritual.” He can form “links with others which are effective even though flexible, specific, instrumental.”
Key libertarian distinction (Bauz): between associations that are coercive (the state) and those that are natural or voluntary (everything else). Society is an association of individuals governed by legal rules — not one large community or family. Membership in a group need not diminish one’s individuality; it can amplify it — freeing people from limits they face as lone individuals and increasing opportunities to achieve their own goals.
17.3.4 Political Economy and the Problem of Redistribution
Libertarianism claims the only economic order that respects individual freedom is the free market. The free market is freedom in action — its heart is the voluntary bilateral exchange. Any distribution occurring in the operation of a free market is just — at no stage has anyone’s right been violated and all exchanges were voluntary.
Hayek: rules of conduct in a society are evolving; they survive because they are useful. The market has survived the test of time — the most successful societies were market-based. The market is superior to other economic systems because it:
- Information and coordination: handles human ignorance by passing information through the price mechanism in coded form, indicating where profits can be made and resources efficiently used — without assuming any specific goals.
- Prices: the price system pulls together all information about what each person wants, how much they value it, and how it can best be produced — enabling producers and consumers to work together to produce more of what everyone wants.
- Efficiency: competition between producers ensures the most efficient ones supply the consumer market.
- Technological innovation: producers seeking to expand market share can only do so by reducing prices through technological innovation — automatically generating technological change.
- Competition: through competition, society discovers how things can be produced at least cost. Markets reward honesty (people are more willing to do business with the reputable) and civility (people prefer courteous partners and suppliers).
Ludwig Von Mises: without mutual benefit from cooperation and division of labour, neither feelings of sympathy and friendship nor the market order itself could arise. The market IS cooperation.
Nozick’s Entitlement Theory — the libertarian theory of distributive justice:
Central theme: if everyone is entitled to the goods they currently possess (their holdings), then a just distribution is simply whatever distribution results from people’s free exchanges. Any distribution that arises by free transfer from a just situation is itself just. For the government to tax these exchanges is unjust. The only legitimate taxation is to raise revenues for maintaining background institutions needed to protect the system of free exchange (police and justice system).
Three principles of entitlement theory:
- Principle of Transfer: whatever is justly acquired can be freely transferred.
- Principle of Just Initial Acquisition: how people come to own things initially.
- Principle of Rectification of Injustice: how to deal with unjustly acquired or transferred holdings.
Formula: “from each as they choose, to each as they are chosen.”
Two arguments for why the claim of peoples’ entitlement should be accepted:
- Free exercise of property is more attractive: if something is legitimately acquired, one has absolute property rights over it — the effect of free transfers may be a massively unequal distribution, but people have rights over their incomes.
- Self-ownership: individuals should be treated as “ends in themselves.” “Individuals have rights, and there are things no person or group may do to them without violating their rights.” As Nozick writes: “seizing the results of someone’s labour is equivalent to seizing hours from him… This process whereby they take this decision from you makes them a part-owner of you.”
Nozick on the welfare state: “There is no such thing as ‘society’ except in the minimal sense of being an aggregate of individuals. There are only individual people with their own individual lives.” State intervention = appropriation of both one’s resources and one’s self. The welfare state is a threat to the liberty and independence of individuals.
Redistributive taxation is inherently wrong — a violation of the people’s right. Libertarians are opposed to any redistribution scheme. Hayek and Friedman: only proportional taxation is fully consistent with libertarian requirements — preventing redistribution of wealth from the wealthy to unpopular minorities and removing a major area of arbitrariness from public policy.
17.3.5 Rule of Law and Limited Government
Libertarianism is not libertinism or hedonism. It proposes a society of liberty under law — individuals are free to pursue their own lives so long as they respect the equal rights of others. The rule of law means: individuals are governed by generally applicable and spontaneously developed legal rules, not by arbitrary commands; those rules should protect the freedom of individuals to pursue happiness in their own way.
Hayek (The Road to Serfdom): warned that adoption of welfare/socialist policies would bring totalitarian government in the long run. Any tolerable future for Western civilisation would demand that socialist ideas be abandoned and classical liberalism restored. The state is the greatest enemy; any interference with private property is an assault on individual rights.
Milton Friedman: competitive capitalism promotes political freedom by separating economic power from political power — enabling each to offset the other.
Ralf Dahrendorf: “There is no such thing as benevolent government. Government is an unfortunate necessity. It is always and by definition liable to encroach upon individual liberties. There is a need for less government.”
Nozick (Anarchy, State and Utopia) on the minimal state: the state should be limited to the narrow functions of protection against force, theft, fraud, and enforcement of contract. Any more extensive state will violate persons’ rights. “The minimal state is inspiring as well as right.” The state must not use its coercive apparatus to get some citizens to aid others.
Nozick argues that the state will arise from anarchy even though “no one intends this” — individuals in the state of nature would find it in their interest to allow a “dominant protective agency” to emerge with de facto monopoly of force. This would not violate anyone’s rights if it does not go beyond protection, justice, and defence. Justifying the minimal state: liberty must get absolute precedence over equality. He opposed progressive taxation and positive discrimination. The state is no more than a night watchman — protecting the inviolable rights of citizens.
Key summary: The libertarian concept of limited government acknowledges the state as a permanent necessary evil. The spontaneous process of society can only be beneficial against a background of legal institutions in which basic liberties are guaranteed for all.
17.4 Critical Evaluation
(i) On Natural Rights
Why these rights (life, liberty, property) and not others? Hammerton: there is no reason to believe these are natural, pre-existing rights independent of the laws of a society. In a libertarian society, those without property are unfree — they cannot act without others helping them and allowing use of their property. The libertarian view of what are legitimate rights cannot be accepted.
(ii) On Freedom as “Absence of Coercion”
In a libertarian society, one’s guaranteed freedom is determined by the amount of property one has. Someone with no property has no guaranteed freedom; someone with more property has greater guaranteed freedom. Thus a distribution of property is a distribution of freedom — by the libertarians’ own definition. Though they want everyone to have an equal sphere of guaranteed freedom, the market does not guarantee anyone any freedom at all. Critics also argue: there is no harm in taxing the wealthy to prevent the poor from starving, since the resulting restrictions of freedom on the wealthy can be very small indeed.
(iii) On Freedom as “Absence of Initiation of Force”
Force can be initiated to protect property rights, and property rights can be violated without initiating force (copyright violations). This definition leads back to the consequence that property rights determine the extent of guaranteed freedom. Given the libertarian claim that property rights are absolute, freedom and property become one and the same — what Hammerton calls “Propertarianism.” Moreover, non-coercion is not an absolute good — other values override it; for instance, coercion to secure justice is not wrong; coercion to secure innovation when the alternative is non-innovation is also legitimate.
(iv) On Anti-Statism
Anti-statism rests on no foundations other than libertarian principles themselves. The state uses the type of coercion that libertarians oppose, but that is not inherently wrong — the state can also end the type of coercion libertarians tolerate, especially in the free market. The fundamental task of the modern liberal democratic state is to innovate — in contravention of national tradition, against the “will of the people,” and in defiance of market forces and logic. To enforce privatisation itself would require the exercise of state power — creating the paradox of a functionally libertarian state imposing libertarian policies on non-libertarians.
(v) On Redistribution
Egalitarians (like Rawls) argue that though a person is a legitimate possessor of his talent, talent is a matter of brute luck — hence the right over talent does not include the right to accrue unequal rewards. Those who are naturally disadvantaged have a claim on those with advantages. Redistribution programmes restrict the self-determination of the well-off only to a limited degree, while giving real control over their lives to those who previously lacked it. Nozick’s account of the minimal state fails because it contains no theory of taxation — hence other libertarian scholars (Hayek, Friedman) insist that taxation should be according to general rules, uniformly applied, with proportional taxation fully consistent with libertarian requirements.
(vi) The Libertarian Image vs. Reality
Critics identify five contradictions:
- They believe in non-coercion, yet in reality legitimise economic injustice by refusing to define it as coercion.
- They depend upon the moral autonomy of the individual, yet in reality demand the individual accept the outcome of market forces.
- They believe in political freedom, yet some form of libertarian government imposing libertarian policies on non-libertarians would be necessary.
- They condemn existing states as oppressive, yet use the political process in existing states to implement their policies.
- They boast of the benefits of libertarianism, yet claim the right to decide for others what constitutes a “benefit.”
Overall assessment: libertarianism is a part of the Anglo-American liberal tradition — “a legitimation of the existing order, at least in the United States.” It legitimises primarily the free market and the resulting social inequalities. “Libertarianism is a legitimation for the rich.” Libertarians may in reality be conservative — not truly interested in the free market or non-coercion as such, but in their effects; they may want to prevent innovation, reverse social change, or return to the past.
17.5 Summary (Key Takeaways)
- Libertarianism = radical individualism + pure capitalism + minimal state. The “New Right” political philosophy influencing Thatcher/Reagan administrations in the 1980s.
- Individualism: the individual is the basic unit of social analysis; only individuals make choices; dignity entails both rights and responsibility.
- Individual Rights: natural negative rights to life, liberty, and property — inherent in human nature, not granted by government or society.
- Spontaneous Order: order in society arises spontaneously; law, language, money, and markets all developed without central direction; civil society is another example.
- Free Markets: necessary for free individuals to survive and flourish; government intervention in economic choices should be minimised; markets generate information, efficiency, innovation, and cooperation.
- Minimal State: government is a dangerous institution; must be limited to protection against force, theft, fraud, and contract enforcement. Nozick’s entitlement theory: just distribution = whatever results from free exchanges. Formula: “from each as they choose, to each as they are chosen.”
- Rule of Law: individuals governed by generally applicable, spontaneously developed legal rules — not arbitrary commands.
- Key critics: rights are not natural (Hammerton); freedom without property is meaningless; anti-statism rests on no foundations beyond libertarian principles themselves; redistribution is not inherently wrong; libertarianism is ultimately a legitimation for the rich and the existing order.
