One of my standard quips about limits of libertarianism is that it's often silently predicated on a specific underlying culture.   In other words, a "live and let live" set of formal policies requires very strong set of informal cultural norms in order to deliver cohesive, productive behavior.  

Sans that culture, you have to clamp down pretty hard with formal policy.  To take one extreme, Somalia might be a libertarian country in a strict, formal sense due to its almost non-existant formal government.   BUT, clearly, the end result isn't quite an ideal and there's clearly something else separating it from pre-NewDeal America...  In short, Libertarian Government is a luxury of conservative culture (or, perhaps more accurately, classically liberal culture).

A fascinating small scale case study of this effect was recently described by the WSJ when they examined Finnish schools which are (paradoxical to many) both highly productive and strikingly unregulated -

High-school students here rarely get more than a half-hour of homework a night. They have no school uniforms, no honor societies, no valedictorians, no tardy bells and no classes for the gifted. There is little standardized testing, few parents agonize over college and kids don't start school until age 7.

Yet by one international measure, Finnish teenagers are among the smartest in the world. They earned some of the top scores by 15-year-old students who were tested in 57 countries. American teens finished among the world's C students even as U.S. educators piled on more homework, standards and rules. Finnish youth, like their U.S. counterparts, also waste hours online. They dye their hair, love sarcasm and listen to rap and heavy metal. But by ninth grade they're way ahead in math, science and reading -- on track to keeping Finns among the world's most productive workers.

IQ is certainly one avenue for explaining this but I tend to come down hard on the side of culture.   Before a Finnish student even starts school, he/she has already baked in some pretty heady expectations -

...What they find is simple but not easy: well-trained teachers and responsible children. Early on, kids do a lot without adults hovering. And teachers create lessons to fit their students.

...Finnish high-school senior Elina Lamponen saw the differences firsthand. She spent a year at Colon High School in Colon, Mich., where strict rules didn't translate into tougher lessons or dedicated students, Ms. Lamponen says. She would ask students whether they did their homework. They would reply: " 'Nah. So what'd you do last night?'" she recalls. History tests were often multiple choice. The rare essay question, she says, allowed very little space in which to write. In-class projects were largely "glue this to the poster for an hour," she says. Her Finnish high school forced Ms. Lamponen, a spiky-haired 19-year-old, to repeat the year when she returned.

...Once school starts, the Finns are more self-reliant. While some U.S. parents fuss over accompanying their children to and from school, and arrange every play date and outing, young Finns do much more on their own. At the Ymmersta School in a nearby Helsinki suburb, some first-grade students trudge to school through a stand of evergreens in near darkness. At lunch, they pick out their own meals, which all schools give free, and carry the trays to lunch tables. There is no Internet filter in the school library. They can walk in their socks during class, but at home even the very young are expected to lace up their own skates or put on their own skis.

While Finland writ large is unlikely to be the setting for a lesson in libertarian government, the school system presents a pretty nice case of what makes it possible.

[a previous blogpost on a similar topic...]