November 8, 2026
By Stephen Stofka
For several weeks, I have explored the dynamic between government and its citizens. Since the founding of this country, there has been a struggle to define the role of government and its limits. This week I examine libertarianism, an ideology that seeks to minimize the role of government in individual lives.
Republic v Democracy
There are two visions of government. The democratic version envisions government as a collection of politicians acting as agents who implement the will of the majority, the principal in this principal-agent dynamic. The republican vision recognizes the danger inherent in majority rule. In a constitutional republic, a set of rules, rights and responsibilities protects the minority from the tyranny of the majority. The constitution, not an electoral majority, acts as the principal.
Voters elect those politicians whom they think will enact their understanding of the constitution. Are politicians trustworthy agents? They have competing interests, including their own self-interest. Ideally, politicians should have only enough power to manage collective action problems like national defense, internal order, the administration of law and the building of common infrastructure.
Free At Last
In 1776, political leaders in the northern and southern colonies declared independence from British rule and created a compact called the Articles of Confederation. Under the Articles, each state had a high degree of autonomy and sovereignty. The federal government had no empowering legislation and each state, regardless of size or population, had the power to veto amendments to the Articles.
The Articles of Confederation created a compact between the thirteen states but not a union. During the seven year war for independence, the states did not honor their commitments to fund the Continental Army led by George Washington. In 1781, twelve states approved an amendment to give the federal government power to levy and collect taxes. Rhode Island, with less than 2% of the national population (Source), killed the amendment (Source). A requirement for unanimous consent hobbles an institution that tries to manage collective action problems. The newly formed nation needed a more effective structure.
Collective Action Problems
In the late 18th century, small farmers formed the majority of the population in the United States. Collective action problems were local, the building of a bridge across a river or the maintenance of roads during the harvest season. As small businesses with thin profit margins, farmers were keenly aware of the tradeoffs in managing these kind of problems. Higher taxes might pay for a bridge that would make it easier to get crops to market, but if higher taxes eliminated most of those slim profits, what was the point in building the bridge?
Businesses also solve a collective action problem by connecting the links in the supply chain. In the south, large landowners exported their cash crops to distant regional markets and other countries. In the north, small farmers and craft businesses lobbied for tariffs to protect them from large European exporters. In the south, large agricultural exporters lobbied against tariffs that made their products less competitive.
For this reason, James Madison, a chief architect of the Constitution, worried about competing regional interests, not political parties. Section 3 of Article 1 of the Constitution explicitly provided for the election of Senators by state legislatures. Article II, Section 1 of the Constitution left it up to the states to choose the electors in the Electoral College who chose the President. Most of the states did not choose their electors by popular vote (Source). In the first decades of the country’s founding, the people, the majority, had access to national government only through their state legislatures and House representatives. The power of the Executive branch was removed from the populist sentiments of the majority.
As the population urbanized in the 19th and 20th century, collective action problems increased to include public health and schools among other issues. In urban areas the solutions to these problems were expensive. Rural residents did not want to pay the taxes for improvements that would do little to better their lives. In many states, rural residents retained their political hold on state legislatures by ignoring census data. Libertarian principles align with these traditional rural sentiments. They believe that businesses are more effective than governments in managing collective action problems.
Atlas Shrugged
In Ayn Rand’s 1957 novel Atlas Shrugged, a group of powerful businessmen withdrew from a socialistic society that nationalized several key industries, including the railroads. The economy and society began to collapse under the weight of political patronage and the ideological idiocy of socialism. Ayn Rand had grown up in the Soviet Union until she was a teenager. The novel is a diatribe against centralized government under Communist rule.
The ideas and sentiments in the book are a foundation of Libertarian ideology. The rightful bounds of government power are national defense, the maintenance of domestic order and the preservation of private property. Domestically, government should adjudicate disputes between people. Let businesses and the marketplace manage other problems. Legitimate government institutions are the armed forces, the police and courts. No to Social Security. No to public education and welfare programs championed by those who believe in socialist government. What should be the limits of government? Not all Libertarians agree.
Socialist Compassion
Socialist societies provide a stark contrast to the Libertarian vision. In socialist societies, government acts as an insurance company, a custodial institution that protects its citizens from the inequalities of circumstance, heritage, and the talents each of us is born with. In that framework, citizens are charges to be cared for and guided by the elites who create policies and institutions for their benefit.
Those who advocate for a socialist government may be motivated by charitable feelings, but Libertarians regard those sentiments as oppressive measures by a political elite who impose their values, which they regard as superior, on others. Under the guise of compassion, a select few in society control the choices and property of the many. Compassionate aims are achieved through constraint of individual choice.
Elite v Elite
While Libertarians might champion their principles as non-elitist, the movement attracts several prominent elites. Elon Musk and Peter Thiel are both billionaires with a pioneer mentality. With little planning or research into government structures, Elon Musk thought he could cut out the dead wood in government with a chainsaw. He did little more than demonstrate his hubris and ignorance. This was the man whose driving vision helped create SpaceX and Tesla? Was he little more than an arrogant showman?
Thiel is a former founder of PayPal and the Chairman of Palantir, a data analytics company. Both SpaceX and Palantir rely on government contracts and funding, yet advocate a limited role for government. Evidently, the role of government includes space exploration (SpaceX) and assisting government surveillance of its citizens (Palantir). Political ideologies spring from the printed page but are voiced by people who must bargain with economic and financial realities.
Conclusion
The Libertarian Party first nominated a Presidential candidate in 1972. In more than 50 years, no candidate has attracted more than a sliver of the vote. Does than mean that the public has rejected the party’s principles? I don’t think so. Next week I want to explore how these principles of a limited government play a large role in policymaking. Also, how private industry aggravates common action problems as it tries to manage them. Hope to see you then.
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Photo by Emily Richards on Unsplash
Machiavelli Niccolò. (1983). The Discourses. (B. Richardson & L. J. Walker, Trans., B. Crick, Ed.). Penguin Books.