The twentieth-century movement holding that individuals own themselves and the fruits of their labour, that all legitimate relations between them are voluntary, and that the state is at best a narrowly bounded instrument for protecting rights — at worst an aggressor with better public relations.
It is distinguishable from classical liberalism less by doctrine than by self-consciousness. Where classical liberalism was the broad common sense of nineteenth-century reform, libertarianism formed as a deliberate movement in mid-century America, with institutions built to sustain it: the Foundation for Economic Education in 1946, the Mont Pelerin Society in 1947, the Libertarian Party in 1971, the Cato Institute in 1977. Its intellectual sources were three and did not agree — Mises and Hayek's economics, Rand's ethical egoism, and Rothbard's natural-rights absolutism — and Rand in particular regarded the movement as having stolen her politics while discarding its philosophical foundation.
Its internal argument runs along two axes. On extent: minarchists accept a state confined to courts, police and defence, while anarcho-capitalists hold that consistency requires abolishing it. On grounds: deontologists like Nozick and Rothbard argue from rights that hold regardless of consequences, while consequentialists like Milton and David Friedman argue that liberty simply works better and would abandon it if it did not. Bleeding-heart and left-libertarian currents have since argued that the tradition's own premises require far more attention to how existing property titles were acquired.
The standing objection is that libertarianism has a developed theory of state coercion and an underdeveloped theory of every other kind — that concentrations of private economic power, monopsony in labour markets and inherited advantage constrain real freedom in ways the framework registers only faintly. Its more serious contemporary work is largely an attempt to answer exactly that charge.