How Libertarianism Fails

From American Thinker.com:

Modern libertarianism is founded on ideas of the prevalence of individual rights, privacy, and respect for private property and the absolute negation of coercion and involuntary restrictions toward sovereign individuals.  Traditionally, compulsion is associated with the institution of the state, which libertarians consider a necessary evil.

However, we should not forget that the emergence of the state logically follows from the libertarian philosophy itself.  It recognizes that humans are lawful owners of their bodies and consciousness and varying in their physical and mental abilities.  At the same time, all humans are born free and equal before the laws of the land; they are endowed with natural rights in their pursuit of happiness.  The delicate interplay of nature and nurture results in a whole pallet of skills that differentiates people in their commercial undertakings.  It feeds the specialization and division of labor at different levels, from the primitive division between the sexes to the global division of labor.

As social beings, humans strive for self-organization, which they carry out by stratification of society and imposition of rules that minimize violence within a community.  The emergence of power that establishes and enforces a set of behavioral rules and norms prevents a total war, with everyone against everyone for scarce resources and others' property.

Therefore, the urgent problem of protecting private property and the sovereign life of an individual creates an institution of defense and justice, which eventually becomes a state.  In other words, the state is the making of economic necessity.  However, the appearance of the state has one significant side effect: the state becomes a factor in the economy.  This is primarily due to the fact that the state has the exclusive right to taxation, control over imports and exports, the ability to incite wars for territorial gains, and superiority in international affairs.  The question is not whether a state should exist.  The crux is how much of the state is allowed in private life and economy.

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1. Libertarianism works well if all economic partners are friendly and honest and adhere to all its provisions.  That is why it is easier to follow its tenets within the boundary of a nation rather than between countries.

2. Libertarianism does not show a good solution at times of war or acute social unrest, where vital decisions must be produced quickly, and all resources must be concentrated on and managed by the authority rather than by the market forces.

3. Libertarianism has weak solutions in some extreme points, such as the maximal concentration of capital that leads to the monopolization of industries or unchecked international divisions of labor.

Libertarians envision an ideal situation where one country produces "bread" and another "butter" and happily trade with each other.  This division of labor is fair and economically beneficial for both countries.  The citizens of both countries enjoy high quality and low prices of goods.  Libertarianism works just fine in case of the division of labor between friendly democratic countries, which have similar economic capabilities and cultural and moral values.  However, in the expression "division of labor," the key word is "labor."  It assumes that the "division of labor" does not lead to a sharp decrease or even disappearance of the opportunity to perform labor in one country and, on the contrary, a rise of employment in another.  The jobs are supposed to remain in both countries.  The division of labor is optimal when both counterparts keep employment on a high level.  [read more]

A very good analysis of libertarianism.

Another article on libertarianism: “Libertarians: Chirping Sectaries” by Russell Kirk.