Given the existence of the international state system, what should a libertarian foreign policy look like?
The answer, as is so often the case, begins with Murray Rothbard, who did not merely tell us what a libertarian foreign policy ought to be—he also tried to explain why governments actually behave as they do.
Perhaps the most striking example of his methodology is displayed in his Wall Street, Banks, and American Foreign Policy, for in it Rothbard did something that remains unusual in discussions of foreign affairs: rather than treating “American foreign policy” as the expression of a unitary national interest, he identified the people and institutions actually making policy and examined the interests they brought to the process. His analysis of American foreign policy therefore combined a normative libertarian critique of state power with an empirical investigation of the political and economic forces that shaped state action.
Justin Raimondo was later to develop this same insight explicitly under the name “libertarian realism.” In two particularly important essays, “Why Governments Make War” and “Looking at the ‘Big Picture,’” Raimondo argued that understanding foreign policy requires looking beyond official claims about the “national interest” and asking who actually makes policy, what institutions they operate within, and what incentives shape their decisions.
What follows is therefore best understood not as an attempt to invent a new school of foreign-policy thought, but as a theoretical refinement of a distinctly Rothbardian-Raimondian insight.
The term Libertarian Realism itself is not new. Nor is this usage identical to every contemporary invocation of the phrase. Aaron Sobczak’s “Realism as a Libertarian Foreign Policy,” for example, argues that libertarians should adopt a restrained-realist approach to foreign affairs. There is considerable overlap with the approach developed here, particularly in its skepticism toward interventionism and its attention to political incentives. But the direction of analysis is different. Sobczak begins with libertarianism and asks what a realist libertarian foreign policy should look like. The approach developed here begins with libertarianism as a normative theory and combines it with realism and public choice as explanatory theories of state behavior.
Nor is it identical to the more recent proposal to make “Libertarian Realism” a synthesis of American conservatism adapted to a multipolar world. That formulation combines libertarian economics with geopolitical realism and, under some circumstances, strategic protectionism. It is a proposed program of political economy with a geopolitical raison d’être. The Libertarian Realism discussed here is instead a method for analyzing foreign policy decisions.
The distinction can be stated simply: libertarianism supplies the normative standard; realism supplies the empirical perspective; public choice supplies the mechanism.
Libertarianism tells us what government ought to do. Realism reminds us that governments operate in a world of competing states, uncertainty, limited information, and constraints on political power. Public choice asks what happens when the people making foreign policy are treated not as disinterested servants of some objectively identifiable “national interest,” but as ordinary human beings responding to incentives.
This distinction is important because “national interest” is often treated as though it were itself an explanation. A government acts because the national interest requires it; therefore, whatever the government does must somehow represent the national interest. But this merely restates the official justification.
A public-choice approach asks a different question: whose interests are actually being advanced, and what incentives produced the policy?
This does not require assuming that policymakers are corrupt, stupid, or dishonest. A president can sincerely believe that a war is necessary while also benefiting politically from supporting it. A bureaucrat can sincerely believe that a larger budget is necessary while benefitting professionally from the expansion of his agency. A defense contractor can sincerely believe that a weapons system is necessary while profiting from its production.
Public choice does not require us to determine which motive is “really” operating inside an individual’s mind. It asks instead what the institutional structure rewards, what it penalizes, and what predictable outcomes emerge when individuals pursue their interests within that structure.
This matters enormously for foreign policy because the costs and benefits of intervention are rarely distributed evenly.
A new weapons program can generate billions of dollars in revenue for a relatively small number of corporations and concentrated employment in particular districts and states. The benefits are immediate and highly visible to those who receive them. The costs are dispersed across millions of taxpayers and consumers.
The typical American has little reason to spend hours studying a weapons contract worth billions of dollars. A defense contractor whose revenue depends upon that contract has every reason to do so—and every incentive to lobby for it.
The same logic extends to the broader foreign-policy establishment. Think tanks, advocacy organizations, consultants, universities, government agencies, and lobbying firms all operate within institutional incentive structures of their own. Funding relationships do not prove that an organization’s analysis is dishonest, nor do they establish that a donor dictated a particular conclusion. But they do create relationships that can affect which questions receive attention, which experts are rewarded, and which policy arguments acquire institutional resources.
The crucial point is that none of this requires a conspiracy.
A weapons manufacturer does not have to secretly control Congress. A think tanker does not have to consciously deceive the public. A bureaucrat does not have to be corrupt. Each participant can simply pursue his own interests within the institutional rules of the system, and the aggregate result can nevertheless be a foreign policy that systematically favors intervention, military spending, sanctions, and threat inflation.
This is where Rothbard and Raimondo offer something particularly valuable. Their approach refuses to treat the state as an abstract actor possessing interests independent of the people who operate it. “American foreign policy” is not literally a person. It is the product of decisions made by presidents, cabinet officials, legislators, bureaucrats, financiers, contractors, lobbyists, intellectuals, and other actors operating within institutions and responding to incentives.
Foreign policy is particularly resistant to ordinary market discipline. If a private company makes a bad product, consumers can stop buying it. If an entrepreneur wastes his capital, he bears much of the loss. Government foreign policy works differently. The costs of failure can be enormous while being dispersed across the population.
A war can cost trillions of dollars without bankrupting the officials who authorized it. A sanctions regime can impose enormous costs on American businesses without sending the policymakers who designed it into bankruptcy. An intervention can end in disaster while the careers of those responsible remain surprisingly intact.
These incentives can produce what might be called an interventionist bias: a political system in which certain interpretations of international events and certain policy responses are systematically rewarded.
This does not mean that every warning about a foreign threat is false. It does not mean that every intervention is unjustified. It means that analysts and historians should ask why some warnings acquire political power while others do not.
The normative side of the theory is equally important. The libertarian case begins with natural law and the non-aggression principle. The initiation of force against another person is morally illegitimate. Applied to foreign affairs, this means that the fact that someone lives beyond America’s borders does not make his rights less worthy of respect. Foreigners are not morally transformed by geography.
This does not make libertarian foreign policy pacifist. Individuals have a right to defend themselves against aggression, and government may legitimately exercise that defensive function to the extent that it is acting on behalf of those individuals. But defense is different from intervention.
The United States does not acquire a moral entitlement to overthrow foreign governments, redraw borders, police distant regions, or impose economic sanctions simply because doing so might produce a desirable outcome. Before government uses force, therefore, there is a burden of justification: there must be a genuine threat, the response must be defensive and proportionate, and its purpose must be the protection of people against aggression rather than the pursuit of an abstract conception of global order.
Libertarian Realism therefore asks two questions of every foreign-policy decision.
First: Is this policy justified? That is the libertarian question. It is answered through natural law, individual rights, private property, and the non-aggression principle.
Second: Why was this policy pursued? That is the realist and public-choice question. It directs attention away from official rhetoric and toward power, institutions, concentrated benefits, dispersed costs, information, bureaucratic interests, and the individual incentives of decisionmakers.
These questions must be kept distinct. Moral judgment is not an explanation of political behavior. Saying that a war was unjust does not explain why policymakers chose it. Conversely, explaining why policymakers chose a war does not make the war just.
Libertarian Realism as foreign policy thus tells us what American foreign policy ought to be while simultaneously explaining why it is so often otherwise.
