Updating Libertarianism for the 21st Century  … A little while ago, I wrote that libertarianism — the small-government philosophy codified by Robert Nozick and others in the mid-20th century — is looking a little shopworn. As efforts to slash government yield diminishing returns, and empirical evidence piles up that many government interventions are very beneficial, the minimalist state envisioned by Nozick et al. doesn't seem up to the challenges of the 21st century.- Bloomberg

Bloomberg's Noah Smith, who famously has derided libertarianism in many articles, now has decided it would be a good idea to update it.

In this editorial, excerpted above, he announces an ally … a new libertarian think-tank, the Niskanen Center. His editorial builds on one recently posted at the Niskanen website by its vice president of policy, Will Wilkinson. You can see the initial editorial here.

Noah calls the longish essay "brilliant" and endorses the approach, which he claims is trying to find ways "to update [the libertarian] doctrine to address today's problems, while retaining and amplifying the useful parts."

More:

Instead of invoking airy axioms, Wilkinson begins with a hard-nosed look at the data. He confronts libertarians with a stark fact — the richer a country is, the more its government tends to spend.

This is true when we look at different countries, and also when we look at each country over time. Today, the top spenders include countries such as France, Denmark and Finland, while the small-government ranks include Sudan, Nigeria and Bangladesh.

… Wilkinson … says that whether government spending is a luxury good or a parasite, rich countries are almost never able to keep it low. Other than a few states like Singapore and Lichtenstein, every rich country chooses big government.

The basic thrust of the essay, and Smith's endorsement of it, is that to remain relevant in the 21st century, libertarians will need to be more pragmatic and less idealistic. Stop talking about eliminating government and concentrate on making "government spend more wisely."

Rather than promote "theories of unfettered markets," economists and other serious observers of the market should be "guided by pragmatism." Libertarians "should be diving into the gritty details of the regulatory state, or gathering evidence on how best to curb government's excesses."

Interestingly, despite his manifest contempt, Noah ends his article by suggesting that he hopes Wilkinson et. al. have a major impact on libertarianism because as "modernizers" instead of "purists," they can help the "ideology" stay relevant.

From a libertarian standpoint, this argument is surely a rehash of the one that took place long ago between Murray Rothbard and the Cato Institute.

At the time, Rothbard had hopes of turning the Cato Institute toward a robust, Misesian approach to free-maket economics. But Cato was in the throes of a coup by the Koch brothers. As a result, Rothbard resigned and concentrated on Mises.org with Lew Rockwell.

Mises and Rothbard were roundly ignored up until the expansion of the Internet era when their version of libertarianism exploded like a metaphysical supernova and virtually took over portions of the English speaking Internet.

While this was exactly what Cato and others had hoped to avoid (it was the realization of all the fears that had led to the suppression of Misesian economics in the first place), it's not hard to understand.

People want to be free. Misesian economics as taken to its logical conclusion by Rothbard and Rockwell became known as anarcho-capitalism.

There are certainly criticisms that be leveled at Rothbard, especially regarding his addiction to a full gold standard as the only non-criminal form of money, but generally speaking anarcho-capitalism provides a pretty good basis and justification for freedom.