Noah Smith: “I owe the libertarians an apology”

by Stephan Kinsella on June 9, 2025

A few years back I appeared on a podcast, Venture Stories Podcast by Village Global, alongside fellow guest Noah Smith. ¹ Amusingly, one reason I was invited on the podcast was that they confused me with the Irish economic journalist Stephen Kinsella. ² (Also somewhat amusing was they cut my derisive reference to Alexandria Ocasio-Cortez as “Occasional Cortex.”)

In any case, Smith recently published “I owe the libertarians an apology,” subtitled “It turns out there are worse monsters than the market,” which he discusses on a recent EconTalk episode with Russ Roberts, Two Cheers for Libertarianism and Econ 101 (with Noah Smith).

ChatGPT’s summary and analysis of the discussion and article is below.

On Jonah Goldberg’s Youthful Phase
I hereby expel Bill Maher from the libertarian movement
Tabarrok’s not looking too good either right now: Tabarrok and Murphy: Why Are US Drug Prices So High? (forthcoming)
Nor lots of other so-called “libertarians” who are pro-IP ³

Summary and Analysis of “I Owe the Libertarians an Apology” – EconTalk Discussion (May 20, 2025)

Main Participants

Russ Roberts: Host of EconTalk, classical liberal economist
Noah Smith: Economist, blogger at Noahpinion, known for center-left, technocratic economic views

Background: The Apology Essay

In his essay “I Owe the Libertarians an Apology”, Noah Smith reflects on his earlier dismissiveness toward libertarian ideas. He acknowledges that, despite their flaws, libertarian principles played a crucial stabilizing role in postwar American political life by championing economic liberty, constrained government, and global openness. Smith contrasts the relative sanity of libertarian-influenced conservatism (e.g., Reaganomics) with today’s Trump-era economic nationalism.

Key Themes and Takeaways from the Podcast

1. Noah’s Critiques of Libertarianism (Before His “Apology”)

Smith originally faulted libertarianism for:

Neglecting defense and industrial policy: He argues that public investment in manufacturing is necessary for national survival in times of war.
Underestimating non-state power: Private actors—churches, employers, communities—can wield coercive power that harms vulnerable individuals. Libertarian focus on state power overlooks this.
Ignoring identity and cultural cohesion: Libertarianism lacks tools to address tribalism, national identity, or collective belonging—issues central to modern politics.

Roberts partially agrees, especially on libertarianism’s blind spot around non-state social power and national identity, though he defends the power of “exit” and market-based correction.

2. What Changed Noah’s Mind

Smith came to appreciate:

The inframarginal importance of libertarianism: While not always front-and-center, libertarian norms and rhetoric undergirded a functional political economy.
The unique nature of the American right: Unlike other nations, U.S. conservatives once emphasized economic liberty—a rare historical anomaly largely forged by Reaganism.
The consequences of libertarian decline: With economic liberty now sidelined by culture wars and right-wing populism, Smith sees Trump-era conservatism as economically incoherent and potentially damaging.

3. The Rise of Trumpism and Decline of Market-Oriented Politics

Both Roberts and Smith observe:

Free-market rhetoric has collapsed: Political discourse has shifted away from fiscal, trade, and monetary policy toward cultural conflict and identity.
Trumpism fills the void: With the loss of libertarian-influenced conservatism, Republicans have embraced protectionism, immigration restriction, and industrial subsidies.
Rand Paul as the last remnant: Smith sees only Rand Paul as carrying the classical liberal flame, albeit with little influence.

4. Economic Ideas and Policy

Smith and Roberts agree:

Econ 101 remains useful, though oversimplified: The supply-and-demand model is a stylized, abstract tool—not “true,” but powerful for framing trade-offs (e.g., housing prices, minimum wage effects).
Empirics should matter more: Smith urges greater integration of empirical reasoning into introductory economics. He believes data-informed models help clarify real-world complexity.
Empirical humility: Both express skepticism about overconfidence in empirical results due to identification problems, endogeneity, and model fragility.

5. National Identity and the Political Shift

Smith argues that Reagan’s libertarianism never addressed the deep tribal and identity needs of voters. In the 2010s, this void was filled by populist nationalism.
Roberts notes that libertarians and classical liberals are often ambivalent about borders and national identity, which alienates many voters.
Smith believes FDR and Reagan successfully forged inclusive national narratives during moments of crisis—something lacking today.

Noah’s Final Reflection

Smith admits he underestimated:

The stabilizing role of libertarian rhetoric in post-WWII America.
The political economy that sustained market liberalism: coalitions, rhetoric, and institutional norms that now appear fragile or broken.
The dangers of ignoring identity politics: Cultural narratives may overwhelm economic reasoning in democratic societies.

Integrated Reflection

Smith’s “apology” is not a wholesale conversion to libertarianism but a recognition of its prior function in restraining worse impulses. His nuanced critique aligns with observations by Russ Roberts: even if libertarian policies were never fully implemented, their influence fostered guardrails—both rhetorical and institutional—that Trumpism has now overrun.

This conversation reflects a broader intellectual moment: the fading of neoliberal consensus and the return of industrial policy, national identity, and populist realism. While Smith doesn’t join the libertarians, he gives them credit for helping create a system that—until recently—mostly worked.

Libertarian Rejoinder (Implied but Not Present)

From a realist-libertarian perspective (e.g., Hoppe or Kinsella), one might argue:

The U.S. was never libertarian—its “free market” was riddled with cronyism, militarism, and central banking.
Reaganism was rhetorically libertarian but substantively statist (see deficits, Cold War spending, corporatism).
The crisis is not libertarianism’s failure but its marginalization by state-led ideologies that both left and right now embrace.

Let me know if you’d like this distilled into bullet points or compared more explicitly with Hoppe or Kinsella’s views.

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Noah Smith: “I owe the libertarians an apology”