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Neolibertarianism is a political philosophy combining elements of libertarian and conservative thought that embraces incrementalism and pragmatism domestically, and a generally interventionist foreign policy. Neolibertarianism holds that the best form of national government is one that promotes capitalism and strong national defense policies, including the use of pre-emptive military engagements if necessary. It also holds that the federal government should concern itself with these issues above all others, while leaving nearly every other issue to more local political entities: state/provincial and municipal governments, communities, and individuals. Neolibertarians are sometimes described as "pro-capitalist conservatives" or "libertarians who support the War on Terror."

The term neolibertarian is undergoing a shift in meaning post-9-11 and post-Iraq War. Originally it indicated a libertarian who embraced the alliance with the New Left, whereas now it is often used to describe a libertarian who favors an interventionist foreign policy, as opposed to an isolationist course of action. In this sense the term is related to neoconservative.

To describe neolibertarians, Dale Franks says this: [1]

When given a set of policy choices,
  • The choice that maximizes personal liberty is the best choice.
  • The policy choice that offers the least amount of necessary government intervention or regulation is the best choice.
  • The policy choice that provides rational, market-based incentives is the best choice.
In foreign policy, neolibertartianism would be characterized by,
  • A policy of diplomacy that promotes consensual government and human rights and opposes dictatorship.
  • A policy of using US military force solely at the discretion of the US, but only in circumstances where American interests are directly affected.

Putting a different spin on it, the website "Neo-Libertarian" says that neo-libertarianism: [2]

...means making a political commitment to combat the initation of force and fraud by the most effective and moral route possible; paleo-libertarians deal in words and thoughts, while neo-libertarians commit themselves to expanding freedom from the rhetorical world to the real world. It's the difference between saying something for freedom and doing something for freedom.
Moreover, it's a commitment to the universality of freedom; just as calling oneself 'The Government' cannot legitimately add to one's natural rights, drawing an invisible line on a map and calling it 'The Border' cannot legitimately subtract from one's natural rights. People in foreign lands have the same natural rights as people in the house next door; neo-libertarianism is about finding the most practical ways to stop infringements against the liberty of those around the globe, including the use of force if necessary, just as we would use local police and courts to stop infringements of liberty next door.
Put more succinctly: Individuals are the only morally significant unit of political economy. Individuals are imbued with infinite liberties circumscribed only by the rights of others to not be coerced or defrauded. The central right of humanity is the right to resist an agressor, even if you aren't the victim.

A common critique of neolibertarians is that their core beliefs contain in themselves an inconsistency -- how can a government powerful and interventionist enough to fix problems abroad be trusted not to try to "solve" problems at home? Historically, there are no known examples of a State with "big" government abroad and limited government domestically. Critics often quote Randolf Borne: "War is the health of the State." Neolibertarians typically respond to this criticism by saying they support military engagements that remove impediments to capitalism and only in the most extreme situations. This is an area where neolibertarians and neoconservatives slightly differ. Where neoconservatives strongly support the building of democratic governments in the wake of militarily defeated governments, neolibertarians are more concerned with letting capitalism operate after any military victory. If capitalism is allowed to operate, they argue, the former subjects of militarily defeated governments will naturally arrange governments (whatever the form) which are, if only out of political expediency, more friendly to their subjects' newfound economic freedoms and therefore much less likely to jeopardize the benefits which neolibertarians believe capitalism offers.