I would divide libertarians into two categories. The first is the moralistic libertarian, who believes that it is immoral to invade anybody else's liberty. Why? They cannot explain, because liberty is taken to be a fundamental good. This kind of libertarian, if pressed, must admit that he would support liberty even if it made everybody unhappier *and* everybody less virtuous using "virtue" in any conventional sense.
The second kind of libertarian is the practical libertarian, who believes that limitations on liberty generally make people less happy and virtuous, and so are bad. In this view, liberty is merely instrumental, but nonetheless crucial. This approach can be grounded either in happiness-- people are happier if they are allowed to use heroin -- or virtue-- people are more virtuous if they have more scope for making decisions.
Note that one and half of these two kinds of libertarians are moralistic--- believing that restricting liberty is immoral or that it reduces virtue. Those libertarians cannot object to moralizing generally-- only to the particular morality chosen.
The remaining kind of libertarian is the utilitarian one. I find this the most sensible of the positions. This kind of libertarian, however, while not moralizing directly, cannot object to moralism either. The reason is that morality and immorality affect happiness. Suppose John's son engages in homosexuality, and John feels bad about it. This is genuine unhappiness, and any sort of utilitarian must accept it as such (except the directly moralistic utilitarian who says that certain sources of utility or disutility don't count). Thus, even though the utilitarian imposes no morality himself, he reckons people's moral utilities and disutilities into his calculations. For more on this, see my "The Economics of Desecration: Flag Burning and Related Activities," Journal of Legal Studies (June 1998) 27: 245-270 or ``Of Sex and Drugs and Rock'n Roll: Law and Economics and Social Regulation,'' Harvard Journal of Law and Public Policy 21: 71-81 (Fall 1997).
At a deeper level, even the moralistic or virtue-maximizing libertarian must confront this problem, because it boils down to property rights. Who has the right to control whether John's son engages in homosexuality? One choice is John's son; another is John. We can assign the right to either one of these two, but whichever choice is made, somebody's freedom is restricted because they are not allowed to make that homosexuality decision. We cannot say that it is obvious that this right should belong to John's son and not to John, because no human society in the history of the world has ever allocated rights that way. Rather, the commonsense way of allocating the right is that either (a) John owns it for his son's first 20 years or so, and John's son owns it after that; or (b) neither one of them own it, because the society bans homosexuality altogether. One may still argue it is right for John's son to own it, but one cannot say that something nobody ever thought of before 1800 and that hardly anybody agrees with now is self-evident.
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