Political libertarians are a motley lot in terms of their moral philosophies. There are three dominant strands – utilitarians like Milton Friedman, deontologists like Robert Nozick, and teleologists like Ayn Rand – but I’ve also met egoists, postmodernists, and Rawls-style egalitarian consequentialists. In debates over moral foundations, Randians often ally themselves with the deontologists in support of “natural rights” (a bit of a misnomer, as deontologists prefer not to locate the source of rights in “nature” but in reason).
Critical Review editor Jeffrey Friedman, a utilitarian, used to say that rights libertarians are more dogmatic than utilitarians on questions of social science. He was extremely skeptical of the line of argument, commonly found in Rothbard, that libertarian policy X is justified on the grounds of both liberty and utility. What are the chances that the world just happens to line up in such a way that perfect justice and liberty also maximize social welfare in every instance? He calls himself a “post-libertarian” in part because he believes that the empirical evidence is unsettled as to the frontiers of the proper (i.e., utility-maximizing) roles of government. And he believes that it is a mark in favor of utilitarianism as a moral philosophy that rights libertarians are extremely reluctant to admit that any of their policy conclusions might not maximize social welfare.
Now, I would make several points in response. First, I doubt that other ideological camps suffer any less from this “Pollyanna syndrome” (justice and social welfare are always perfectly compatible), even though they are also, in the main, non-utilitarian. Indeed, I suspect it is characteristic of libertarians that they are likely to subject their philosophical foundations to critical analysis, however flawed or partial. (Would you ever see a post like this on NRO or ThinkProgress?)
Second, deontological underpinnings ought to make one less dogmatic on social science, not more. After all, if one is committed to a certain political ideology, it is far less threatening to that ideology to admit that, say, the market cannot adequately handle health care if one is a natural-rights libertarian than if one is a utilitarian libertarian. I suspect that the observed correlation going the other way (rights libertarians tending to be more dogmatic on social science) is actually related to some kind of selection effect. People who are more dogmatic in general mental outlook might tend to be attracted to natural-rights views. There is also the matter of intellectual training. Deontologists tend not to be economists; economists are overwhelmingly consequentialists of some kind. Thus, when most deontologists try to engage empirical social science, they are usually not very good at it. (And when economists try to engage moral philosophy, they are usually quite bad at it. Amartya Sen excepted, of course.)
Third, if one interprets social welfare in the limited sense of Pareto optimality, it is quite clear why liberty and social welfare are potentially perfectly compatible. Points inside the Pareto frontier can be remedied, in principle, by voluntary exchange, perhaps through contract. (Of course, there are situations of strategic interaction, like the Prisoner’s Dilemma, in which self-interested individuals choose a Pareto-inferior equilibrium when acting purely autonomously. But if there is an external enforcer of contracts, contractual exchange, perfectly compatible with rights as libertarians typically understand them, solves the problem.) Where utilitarianism is controversial, of course, is where it goes further than Pareto efficiency to justify transfers from some individuals to others in order to improve summed welfare. And it is precisely there that rights libertarians (potentially) part ways with the conclusions of utilitarian analysis.
Thus, it is unsurprising that libertarian and utilitarian analyses of paternalistic interventions (which are inherently antiutilitarian and antilibertarian) and government policies causing deadweight losses (like minimum wage and rent control) march in lockstep. The approaches may part company when it comes to solving market failures. For strong rights libertarians, the solution to market failure lies, in general, in voluntary contract, assuming the initial distribution of assets is just. For utilitarians, voluntary contract would be fine if available; otherwise, having government do it is fine too (assuming problems of government failure have been solved). Rights rule out possibilities that would otherwise have been available to improve social welfare. And a utilitarian might point out that the existence of transaction costs in contracting might make Pareto efficiency unattainable and force rights libertarians to endorse the loss in efficiency. Nevertheless, a sophisticated deontological libertarian would, I think, recognize the need to bite the bullet there and try to remain non-dogmatic on the social-scientific question of how often this bullet would need to be bitten.