Definition of Libertarianism
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This article is part of the Basic Course on Libertarianism and the Austrian School of Economics -> Module 2: Libertarianism and its ethical foundations
Last updated: 2026-09-23
Definition
Liberalism (libertarianism) is a comprehensive social, legal, and institutional philosophy whose absolute core is individual liberty, Private Property, and voluntary peaceful cooperation.
Liberalism places the human being and their conscious actions at the center of inquiry. It defends that the rights to life, liberty, and private property are prior and superior to any state decree, rejecting Collectivism and Political Constructivism, which treat individuals as malleable matter for the ends of a central elite.
The relationship between liberalism and the Austrian School of Economics is one of profound complementarity.
While liberalism establishes the normative framework (a society of free and prosperous people), Austrian economics provides the scientific and methodological foundation (Methodological Individualism, Subjectivism, and Praxeology (human action)).
Ludwig von Mises (1881-1973) masterfully united these ideas in his work, demonstrating that private property and the Free Market are not mere political preferences, but the only possible technical basis for Economic Calculation and social coordination.
Liberalism rests on the recognition that the information relevant to life in society is Dispersed Knowledge in the minds of millions of people. Therefore, it opposes Statism and Keynesianism, arguing that the free market and the Price mechanism operate as a Spontaneous Order infinitely superior to any attempt at Central Planning.
Historical origin
It originated in 17th-century England as a reaction against absolutism, the divine right of kings, and mercantilist barriers. The Glorious Revolution of 1688 and English parliamentarism served as its political laboratory.
Its intellectual pillars are:
- John Locke (1632-1704): natural rights to life, liberty, and property; government by consent; the right of resistance when power becomes tyrannical.
- Montesquieu (1689-1755): separation of powers so that no single entity concentrates legislation, execution, and adjudication.
- Adam Smith (1723-1790): the economic order is not planned from a center; it arises from voluntary exchanges, division of labor, and prices. "Laissez-faire" is not moral indifference: it is distrust toward privileges granted by the State.
In the 19th century, classical liberalism was associated with constitutionalism, free trade, and the critique of legal monopolies.
Enduring Principles
Beyond its variants, classical liberalism typically upholds:
- Political and methodological individualism. The subject of rights is the individual person, not the class, nation, or "the people" as a metaphysical entity.
- Equality before the law, not equality of outcomes. The law must be general and abstract; not an instrument to reward or punish groups.
- Private property, including in the means of production. Without it, there is no serious Economic Calculation nor a private sphere protected from power.
- Rule of law and limited government. The State exists to protect life, liberty, and property, not to direct society.
- Freedom of contract, trade, speech, religion, and association, provided the equal rights of others are not violated.
- Tolerance and the secularization of political power. The State does not impose a religious or ideological orthodoxy.
The liberty it defends is, in essence, negative: the absence of arbitrary coercion. It promises neither equal outcomes nor collective "emancipation" designed from above.
What Liberalism is Not
It is not conservatism (it can be reformist against inherited privileges).
It is not unlimited democracy (the majority cannot overrule individual rights).
It is not moral "anything goes" (it demands rules of non-aggression and contract enforcement).
And it is not a guarantee that market outcomes will please everyone: it promises a framework of voluntary cooperation, not an egalitarian outcome.
In short: liberalism, in the tradition running from Locke to Mises and Hayek, is the doctrine that civilization is sustained when individuals can dispose of themselves and their property under general laws, not when a political center allocates resources, truths, or destinies.
The remaining debates—how minimal the State should be, what to do about externalities, how to address immigration or education—are applications and internal tensions within that premise, not its abandonment.
Short Definition
Liberalism is the unrestricted respect for the life projects of others, based on the non-aggression principle, and the defense of the right to life, liberty, and private property. Definition formulated by Alberto Benegas Lynch (h). This definition encapsulates the entirety of the idea of liberalism.
Names Attributed to Liberalism
Libertarianism, liberalism, libertarian, minarchism, anarcho-capitalism, classical liberal, etc. What does each one mean?
The original name was liberalism (19th century), and it was a name that the American left co-opted (so to speak) at the beginning of the 20th century.
Thus, in the United States, the term libertarian emerged to signify something else and distinguish (in English) liberal from libertarian. It must be kept in mind that in the US, "liberals" are on the left and have nothing to do with classical liberalism.
This is not the case in the rest of the world, where the words libertarian, liberal, liberalism, libertarianism mean practically the same thing; all are grouped under the liberal or libertarian ideology.
However, within libertarian ideology itself, there are different branches, some more radical, others more conservative. We summarize them below, from most radical to most conservative:
Explanation in a Diagram
David Nolan was an American activist and politician who created this chart in 1969. The diagram illustrates where liberalism and other political ideologies are positioned. As can be seen, liberalism is at the top right vertex, and it is the option that offers the greatest degree of personal and economic freedom.
Branches of Each Ideology
- Under totalitarianisms, we have: Communism, Fascism (or Extreme Nationalism), Religious Theocracy.
- On the right, from greater to lesser freedom: Liberal Conservatism, Traditional Conservatism, Nationalism.
- On the left, from greater to lesser freedom: Social Democracy, Marxism-Leninism, Anarcho-Communism (maximum personal liberty, zero economic liberty).
- Under liberalism, we explain them below:
Branches of Liberalism
1. Anarcho-Capitalism
The most radical ideology, anarcho-capitalism is a philosophy that advocates the total abolition of the State and the organization of society through free markets, private property, and voluntary contracts.
It proposes that all functions traditionally associated with the State (security, justice, infrastructure) be provided by private firms in a competitive market.
Thinkers in this school include: Murray Rothbard, David Friedman.
Key characteristics:
- Absence of the State: There is no government; everything is resolved through voluntary agreements and markets. Taxes do not exist.
- Private property: It is the fundamental pillar. Everything, from roads to courts, can be privatized.
- Individual liberty: Maximum individual liberty, as long as the property or rights of others are not violated.
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Non-aggression: Central principle prohibiting the use of force, except in self-defense or defense of property.
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Practical example:
- Everything the State provides can be replaced by numerous insurance companies, and citizens are free to hire those with the best reputation.
- Police and armed forces would be replaced by private security agencies contracted by individuals or communities.
- Education and healthcare would also be private (in Argentina this model has existed for years).
- Hundreds of insurance companies would offer coverage for: disability, retirement, prenatal disabilities, etc. In Argentina, private retirement was successful when it existed under the name AFJP.
- Justice would also be private, where multiple arbitration and justice firms could deliver a verdict; citizens could choose the most reputable judicial firm. In such cases, justice would be extremely fast and effective.
- Taxes would be ZERO; taxes do not exist.
2. Minarchism
The term "minarchism" originated as a sort of jibe among "anarchist" and "anarcho-capitalist" theorists; it is a blend of the words mini and anarchism—that is, neither pure "anarchism" nor full "classical liberalism," but an "almost" anarchism.
Minarchism defends a minimal State, strictly limited to essential functions in which it is competent: Justice, (Internal) Security, and (External) Defense.
Minarchism protects individual rights (life, liberty, property) through the police (domestic), courts of law, and military defense (foreign).
Everything else must be handled by the private sector (especially through open competition among insurance companies). Some prominent thinkers of this branch include: Robert Nozick, Ayn Rand.
Key characteristics:
- Limited State: A government exists, but solely to guarantee security, justice, and defense against foreign aggression. Taxes are extremely low (ideally under 10% in total).
- Private property and markets: Strong emphasis on the free market, with a State acting as an arbitrator to resolve disputes.
- Individual liberty: Promotes individual liberty, but accepts a minimal degree of state coercion (minimal taxation) to finance basic functions.
- Practical example: A minarchist government might maintain an army and a judicial system, but would not intervene in education, healthcare, or economic regulation, unless the life, liberty, or property of citizens are threatened.
3. Classical Liberalism
Liberalism (in its classical sense) defends individual liberty, free markets, the rule of law, and limited government, but not necessarily a minimal one.
Unlike anarcho-capitalism and minarchism, classical liberalism may accept a State with broader roles, such as providing public goods or regulating certain aspects of the economy, provided liberty is preserved.
Notable thinkers in this branch include: John Locke, Adam Smith, Friedrich Hayek.
Key characteristics:
- Moderate State: Accepts a government with broader functions than minarchism (e.g., public education, infrastructure, limited regulation). Taxes are not low, as the state must be financially sustained.
- Individual liberty and markets: Defends personal liberty and capitalism, but may tolerate state interventions to correct market failures or guarantee equality of opportunity.
- Rule of law: Emphasis on clear and just laws that protect individual rights.
- Practical example: A liberal government might fund public schools or regulate monopolies, maintain a largely free market, and attempt to lower taxes to a minimum, though constrained by the cost of maintaining the state.
Comparative Table
| Aspect | Anarcho-Capitalism | Minarchism | Classical Liberalism |
|---|---|---|---|
| Role of the State | None; everything privatized. | Minimal (security, justice, defense). | Moderate (may include public goods). |
| Taxes | None. | Minimal, only for essential functions. | Moderate, to finance public goods. |
| Individual liberty | Maximum, no state coercion. | High, minimal state coercion. | High, but with possible state intervention. |
| Private property | Absolute, everything is privatizable. | Central, protected by the State. | Central, but with possible regulation. |
| Services provided by the State | None | Security, Justice | Most |
Important
In practice, anarcho-capitalism remains theoretical, as there are no pure historical examples and it has never been implemented to date. Minarchism is also more of an ideal than a reality, although some countries with small governments (such as Switzerland in certain respects) approximate it. Classical liberalism shaped the founding institutional frameworks of countries like the United States and the United Kingdom.
Completing the Nolan Chart with the Mentioned Branches
Note:
- Social democracy appears twice because it covers a broad spectrum in the center-left, at times offering more or less individual liberty.
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Fascism:
- While it differs from communism by rejecting the idea of "class struggle" and replacing it with "nationalism," it does not seek the total abolition of property, but rather its total control by the State. In this sense, it destroys both the individual and economic freedom of people.
- For Austrian economists, the relevant axis is not left-right, but interventionism vs. free market. Fascism, Nazism, social democracy, and communism are all variants of statist collectivism. The difference is merely one of degree and rhetoric.
This article is part of the Basic Course on Libertarianism and the Austrian School of Economics -> Module 2: Libertarianism and its ethical foundations
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Last updated: 2026-09-23
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