Gah. After all these years, some of the long-term posters here don’t even seem to understand the first principle of libertarianism, let alone understand enough about it to be able to identify it.
Let’s get this straight: The primary purpose of government in a libertarian society is to protect the citizens from others using force against them. That automatically rules out Somalia or any other anarchistic ‘failed state’. BY DEFINITION.
Saying that Somalia is libertarian because the government has broken down is like saying that Nazi Germany was Communist because it had a big strong government. It’s nothing more than a cheap slur.
The libertarian conception of ‘force’ includes imposing costs on people without their permission (i.e. market externalities like pollution), fraud, contract violation, etc. So in a libertarian society you still have a government with police forces, law courts, and a military. People are free to enter into contract with each other, but the government will have a role in adjudicating those contracts and settling disputes. People who defraud others, or threaten them, or con them will still be breaking the law.
And because Libertarians believe in paying for the services they receive, they also understand that they are collectively responsible for paying for this level of government through what taxation might be required.
I would argue that the closest thing to an attempt to set up a libertarian society was probably the U.S. federal government at its founding. The constitution is a very libertarian-leaning document - its main purpose is to define the rights of individuals and the relatively small sphere of activity restricted to the government. No, it wasn’t perfectly libertarian, and the U.S. never reached that ideal and in fact began diverting from it almost immediately.
Hong Kong is often mentioned as a libertarian example because the British governor of post-WWII Hong Kong took a very deliberate ‘laissez-faire’ approach to governing. Many of the social and economic structures in Hong Kong arose dynamically out of the interactions of the people without a government plan. Opening a business in Hong Kong required little more than filling out a one-page notification to the government. The movement of people and capital was pretty much unregulated, as were wages and working conditions. The social safety net was tiny or nonexistent.
It’s true that no purely libertarian state has existed, just like no pure communist state has ever existed - probably because the nature of man won’t allow for such purity of action across large populations. But here’s where the libertarians and communists differ:
Communists use the lack of purity as an excuse for failed communist states - if only it had been PURE, it would have worked! The glorious vision of true communism was destroyed by flawed people, and must be given another chance. In other words, if it’s ‘true’ communism it doesn’t count, and the failure of almost-communist states cannot be held against communism.
Against such an attitude, it’s entirely fair to point out that pure communism is impossible, and therefore if purity is necessary for success, communism itself fails as a philosophy of government.
Libertarians do not require purity for success. They would argue that countries that move towards that ideal will realize better outcomes for the people. There is no requirement for purity to achieve a good outcome - smaller government is better than bigger government, more freedom is better than less freedom, the more autonomy we give people to sort out their own affairs, the better off they and the rest of us will be.
In that case, there is no need to demand an example of a ‘pure’ libertarian state in order to justify the philosophy. We can simply look at trends and see if the libertarian path seems to be a good one to start traveling.
For example, we can look at Canada when its government was 53% of the economy and contrast it with the Canada that had government at 35% of the economy. We can compare U.S. states that have large intrusive government against states that have smaller government. We can look at the transition of the former communist republics and look at the outcomes of those that embraced the market over those that attempted to maintain more social planning. We can look at the various states in Europe and compare their outcomes against the sizes of their governments.
Today, the Heritage Foundation publishes a list of countries ranked by economic freedom. You can read the 2011 study here: The 2011 Index of Economic Freedom. You can read the report to see their methodology, but it includes things like tax rates, business regulation, trade freedom, labor freedom, freedom from corruption, government share of the economy, etc.
IN 2011, only six countries were rated ‘free’. They were (in order):
Hong Kong
Singapore
Australia
New Zealand
Switzerland
Canada
(the U.S. ranked 9th, just out of the group of ‘free’ countries, and rated ‘mostly free’).
That doesn’t make those six countries libertarian, and it doesn’t include non-economic coercion by government or individuals. But it at least gives you some idea of what kinds of countries have smaller government footprints today. Somalia, they aren’t.