The best books on Libertarianism

Capitalism and Freedom is the greatest exposition of the consequential case for libertarianism. In other words, Milton Friedman’s case for libertarian policies rests not on moral assumptions or “natural” rights but on showing that capitalism is important because it has positive consequences – it enables human prosperity and flourishment.

Perhaps as importantly, Capitalism and Freedom shows that economic freedom is a necessary condition not just for economic prosperity but for personal and political freedom. Thus, free markets are not only compatible with democracy (contra what many people claim), but a necessary condition for protecting democracy and personal freedoms.

This book’s outlook is probably the closest to the one articulated in my book. It is also the most recent one on the list, making it an easy read.

Hayek is an exponent of the Austrian School, a tradition that has deeply influenced many libertarians. The Road to Serfdom was a best-seller exposition of classic liberal and libertarian ideas. Written during WWII, at a time when socialism and central planning were fashionable, Hayek warns policymakers of the danger of tyranny stemming from government control and central planning. In a sense, he anticipates Friedman’s claims that central planning and democracy were incompatible.

Many criticize Hayek’s warnings as exaggerated: the latter part of the 20th century witnessed substantial growth in Western states’ budgets, transfers, and regulations, but no lapse into outright tyranny. Nevertheless, the government’s expanded reach over this period has limited freedom in many dimensions, with recent proposals from the right and left both threatening further harm. Thus Hayek’s predictions are not only a timeless and concise libertarian exposition of the role of government and the strengths of free markets but also a warning that freedom advocates must remain constantly on guard.

Bastiat was a 19th-century French economist, writer, and politician. Economic Sophisms is a collection of short and enjoyable essays illustrating the case for free trade and attacking some economic misconceptions. Many of the essays’ themes and arguments are relevant today, and Bastiat’s critiques of big government are often witty.

In one essay, Bastiat presents a “candlemakers petition” to the parliament for protection against the unfair competition of sunlight, which was flooding the market with a superior product at virtually zero price. Modern critiques of zero price “monopolists” (e.g., Facebook or Google) should take note!

In What is Seen and Not Seen Bastiat introduces the “parable of the broken window” to show that economic resources are fundamentally scarce: resources expended on one activity are not available for others. Centuries later, many policymakers are yet to grasp this insight.

This book offers the first detailed defense of using free markets, rather than government, to allocate resources – a core tenet of libertarianism. Smith addresses numerous examples, but his most fundamental insight is that markets, rather than being guided by orders or commands from government, operate as if “an invisible hand” is matching buyers and sellers, leading to an outcome that no planner could have achieved.

Today many people have heard about the law of supply and demand. But the idea that markets, under no one’s authority, could organize production – let alone do it better than if someone had planned it – is deeply counterintuitive. Smith’s explanation for how markets achieve this feat was groundbreaking.

Readers should probably focus on the first chapters of Book I to see Smith’s account of the division of labor and markets.

Locke’s Second Treatise on Government is the first book to present a coherent liberal theory of the State. Many of its core ideas are now common-sense: that the legitimate end of government is to preserve and enlarge the freedom of its subjects; that sovereigns should be held accountable to the law; and that individuals have a natural right to life, liberty, and property even in the absence of government.

This is a short and readable book that reminds us how much the liberal tradition initiated by Locke is, at least rhetorically, embedded in much of contemporary discourse on democracy and politics.

This book is also of paramount importance to libertarians because it presents one of the first articulated arguments for private property as a means to create wealth.