The first recorded use of the term libertarian was in 1789, when William Belsham wrote about libertarianism in the context of metaphysics. As early as 1796, libertarian came to mean an advocate or defender of liberty, especially in the political and social spheres, when the London Packet printed on 12 February the following: "Lately marched out of the Prison at Bristol, 450 of the French Libertarians". It was again used in a political sense in 1802 in a short piece critiquing a poem by "the author of Gebir" and has since been used with this meaning.
The use of the term libertarian to describe a new set of political positions has been traced to the French cognate libertaire, coined in a letter French libertarian communist Joseph Déjacque wrote to mutualist Pierre-Joseph Proudhon in 1857. Déjacque also used the term for his anarchist publication Le Libertaire, Journal du mouvement social (Libertarian: Journal of Social Movement) which was printed from 9 June 1858 to 4 February 1861 in New York City. Sébastien Faure, another French libertarian communist, began publishing a new Le Libertaire in the mid-1890s while France's Third Republic enacted the so-called villainous laws (lois scélérates) which banned anarchist publications in France. Libertarianism has frequently been used to refer to anarchism and libertarian socialism since this time.
In the United States, libertarianism was popularized as a synonym for liberalism in May 1955 by writer Dean Russell, a colleague of Leonard Read and a classical liberal himself. Russell justified the choice of the term as follows:
||Many of us call ourselves 'liberals.' And it is true that the word 'liberal' once described persons who respected the individual and feared the use of mass compulsions. But the leftists have now corrupted that once-proud term to identify themselves and their program of more government ownership of property and more controls over persons. As a result, those of us who believe in freedom must explain that when we call ourselves liberals, we mean liberals in the uncorrupted classical sense. At best, this is awkward and subject to misunderstanding. Here is a suggestion: Let those of us who love liberty trade-mark and reserve for our own use the good and honorable word 'libertarian'.
Subsequently, a growing number of Americans with classical liberal beliefs began to describe themselves as libertarians. One person responsible for popularizing the term libertarian in this sense was Murray Rothbard, who started publishing libertarian works in the 1960s. Rothbard described this modern use of the words overtly as a "capture" from his enemies, saying that "for the first time in my memory, we, 'our side,' had captured a crucial word from the enemy. 'Libertarians' had long been simply a polite word for left-wing anarchists, that is for anti-private property anarchists, either of the communist or syndicalist variety. But now we had taken it over".
In the 1970s, Robert Nozick was responsible for popularizing this usage of the term in academic and philosophical circles outside the United States, especially with the publication of Anarchy, State, and Utopia (1974), a response to social liberal John Rawls's A Theory of Justice (1971). In the book, Nozick proposed a minimal state on the grounds that it was an inevitable phenomenon which could arise without violating individual rights.
According to common meanings of conservative and liberal, libertarianism in the United States has been described as conservative on economic issues (economic liberalism) and liberal on personal freedom (civil libertarianism) and it is also often associated with a foreign policy of non-interventionism.
Although libertarianism originated as a form of left-wing politics, the development in the mid-20th century of modern libertarianism in the United States led several authors and political scientists to use two or more categorizations to distinguish libertarian views on the nature of property and capital, usually along left–right or socialist–capitalist lines, Unlike right-libertarians, who reject the label due to its association with conservatism and right-wing politics, calling themselves simply "libertarians", proponents of free-market anti-capitalism in the United States consciously label themselves as left-libertarians and see themselves as being part of a broad libertarian left.
While the term "libertarian" has been largely synonymous with anarchism as part of the left, continuing today as part of the libertarian left in opposition to the moderate left such as social democracy or authoritarian and statist socialism, its meaning has more recently diluted with wider adoption from ideologically disparate groups, including the right. As a term, libertarian can include both the New Left Marxists (who do not associate with a vanguard party) and extreme liberals (primarily concerned with civil liberties). Additionally, some libertarians use the term "libertarian socialist" to avoid anarchism's negative connotations and emphasize its connections with socialism.
The revival of free-market ideologies during the mid- to late 20th century came with disagreement over what to call the movement. While many of its adherents prefer the term "libertarian", many conservative libertarians reject the term's association with the 1960s New Left and its connotations of libertine hedonism. The movement is divided over the use of conservatism as an alternative. Those who seek both economic and social liberty would be known as liberals, but that term developed associations opposite of the limited government, low-taxation, minimal state advocated by the movement. Name variants of the free-market revival movement include classical liberalism, economic liberalism, free-market liberalism and neoliberalism. As a term, libertarian or economic libertarian has the most colloquial acceptance to describe a member of the movement, with the latter term being based on both the ideology's primacy of economics and its distinction from libertarians of the New Left.
While both historical libertarianism and contemporary economic libertarianism share general antipathy towards power by government authority, the latter exempts power wielded through free-market capitalism. Historically, libertarians including Herbert Spencer and Max Stirner supported the protection of an individual's freedom from powers of government and private ownership. In contrast, while condemning governmental encroachment on personal liberties, modern American libertarians support freedoms on the basis of their agreement with private property rights. The abolishment of public amenities is a common theme in modern American libertarian writings.
According to modern American libertarian Walter Block, left-libertarians and right-libertarians agree with certain libertarian premises, but "where [they] differ is in terms of the logical implications of these founding axioms". Although several modern American libertarians reject the political spectrum, especially the left–right political spectrum, several strands of libertarianism in the United States and right-libertarianism have been described as being right-wing, New Right or radical right and reactionary.
All libertarians begin with a conception of personal autonomy from which they argue in favor of civil liberties and a reduction or elimination of the state. People described as being left-libertarian or right-libertarian generally tend to call themselves simply libertarians and refer to their philosophy as libertarianism. As a result, some political scientists and writers classify the forms of libertarianism into two or more groups to distinguish libertarian views on the nature of property and capital. In the United States, proponents of free-market anti-capitalism consciously label themselves as left-libertarians and see themselves as being part of a broad libertarian left.
Left-libertarianism encompasses those libertarian beliefs that claim the Earth's natural resources belong to everyone in an egalitarian manner, either unowned or owned collectively. Contemporary left-libertarians such as Hillel Steiner, Peter Vallentyne, Philippe Van Parijs, Michael Otsuka and David Ellerman believe the appropriation of land must leave "enough and as good" for others or be taxed by society to compensate for the exclusionary effects of private property. Socialist libertarians such as social and individualist anarchists, libertarian Marxists, council communists, Luxemburgists and De Leonists promote usufruct and socialist economic theories, including communism, collectivism, syndicalism and mutualism. They criticize the state for being the defender of private property and believe capitalism entails wage slavery.
Right-libertarianism developed in the United States in the mid-20th century from the works of European writers like John Locke, Friedrich Hayek and Ludwig Von Mises and is the most popular conception of libertarianism in the United States today. Commonly referred to as a continuation or radicalization of classical liberalism, the most important of these early right-libertarian philosophers was Robert Nozick. While sharing left-libertarians' advocacy for social freedom, right-libertarians value the social institutions that enforce conditions of capitalism while rejecting institutions that function in opposition to these on the grounds that such interventions represent unnecessary coercion of individuals and abrogation of their economic freedom. Anarcho-capitalists seek the elimination of the state in favor of privately funded security services while minarchists defend night-watchman states which maintain only those functions of government necessary to safeguard natural rights, understood in terms of self-ownership or autonomy.
Libertarian paternalism is a position advocated in the international bestseller Nudge by the economist Richard Thaler and the jurist Cass Sunstein. In the book Thinking, Fast and Slow, Daniel Kahneman provides the brief summary: "Thaler and Sunstein advocate a position of libertarian paternalism, in which the state and other institutions are allowed to Nudge people to make decisions that serve their own long-term interests. The designation of joining a pension plan as the default option is an example of a nudge. It is difficult to argue that anyone's freedom is diminished by being automatically enrolled in the plan, when they merely have to check a box to opt out". Nudge is considered an important piece of literature in behavioral economics.
In the United States, "libertarian" is a typology used to describe a political position that advocates small government and is culturally liberal and fiscally conservative in a two-dimensional political spectrum such as the libertarian-inspired Nolan Chart, where the other major typologies are "conservative", "liberal" and "populist". "Libertarians" support legalization of victimless crimes such as the use of marijuana while opposing high levels of taxation and government spending on health, welfare and education. The term "libertarian" was adopted in the United States, where the word liberal had become associated with a version that supports extensive government spending on social policies. "Libertarian" also refers to an anarchist ideology that developed in the 19th century and to a version which developed in the United States that is avowedly pro-capitalist.
According to polls, approximately one in four Americans self-identify as "libertarian". While this group is not typically ideologically driven, the term "libertarian" is commonly used to describe the form of libertarianism widely practiced in the United States and is the common meaning of the word libertarianism in the United States. This form is often named "liberalism" elsewhere such as in Europe, where liberalism has a different common meaning than in the United States. In some academic circles, this form is called "right-libertarianism" as a complement to "left-libertarianism", with acceptance of capitalism or the private ownership of land as being the distinguishing feature.