A commenter on my Propertarianism piece asks "isn’t this the moment when Libertarianism is totally proved wrong?" On reflection I think that deserves an answer.
Many libertarians predicted the crash very accurately. Ron Paul and the hardcore Austrians have been totally proved right. I would be pretty smug around now, except that I had thought they were a bit loony on the whole money & credit thing.
To a libertarian, "libertarianism" is the stuff they talk about at length, in their ineffective folk activism. To a non-libertarian, "libertarianism" is whichever bit of that actually gets practised. The difference between the two was largely what my post was about.
Of course, everyone whose policies have failed always claims that they failed because they weren't carried out thoroughly enough. Russia wasn't communist enough, James II wasn't royalist enough, insufficient threats were made against Saddam Hussein, and when the threats failed insufficient military force was used.
For such excuses to have even the possibility of being worthwhile, one has to say not only why the right policies failed, but also why it is that next time they are tried, they will work better.
For what it's worth, the economy has failed because it wasn't deregulated enough, because the state wasn't sufficiently separated from the financial markets, etc. etc. etc. But it's not worth much, because next time libertarian idealists get into bed with big business interests to attempt to deregulate the economy, exactly the same thing will happen. So, yes, inasmuch as libertarianism means "anti-statists getting into bed with big business interests to attempt to deregulate the economy", which is pretty much what it does mean to outsiders, it has indeed been proved wrong.
Again, that was my point, which is why I initially didn't think this response needed to be made. But I might as well repeat myself a little if it makes things clearer.
What I was primarily addressing was that because the only approach that has put libertarians anywhere near political power has failed, and will fail again, other approaches must be considered. Ron Paul got 10% of the Republican Primary vote. Bob Barr got 0.4% in the presidential election. There is a fundamental reason why libertarianism cannot win elections - political parties are built on patronage, and libertarianism is incompatible with patronage. You cannot win a political struggle on a promise to grab power and not use it.
The best that can me done is to make more people (not necessarily a majority) understand that all governments impose bad policies in order to stay in power. That would not solve the problem, but perhaps limit the bad effects in future. It also fits very well into a Marxist or other far-left viewpoint. The left is not much closer to power than are libertarians, but it does have much greater impact on the culture, through its strong position in education and the media. Ideas leak from the left into the mainstream all the time, and this one could too.