The political tradition that takes individual liberty — specifically, the liberty of persons and their legitimately acquired property from coercive interference — as the paramount political value, and concludes that the legitimate powers of the state are therefore narrow: the protection of persons and property against force and fraud, the enforcement of contracts, perhaps the provision of a small number of genuine public goods, and little else. The term settled into its present American meaning in the mid-20th century, displacing the older European liberalism from which it largely descends, as that older word migrated in the United States toward its current center-left reference.
The tradition divides internally. Natural-rights libertarians in the Lockean line — Robert Nozick's Anarchy, State, and Utopia (1974) is the canonical contemporary text — argue that individuals have inviolable moral rights (self-ownership, acquired property) that any redistributive or regulatory state necessarily violates, whatever its ends. Consequentialist libertarians — Milton Friedman and much of the Chicago School — make a pragmatic case: free markets produce better aggregate outcomes than political direction, so minimizing state interference is the empirically best policy even if no moral rights are at stake. Friedrich Hayek's epistemic argument — that decentralized prices convey dispersed knowledge in ways no central authority can replicate — sits between the two. Anarcho-capitalists (Murray Rothbard, David Friedman) extend the argument to hold that even the minimal state is unjustified and that markets can supply law and defense. Left-libertarians retain the emphasis on self-ownership but reach egalitarian conclusions about the distribution of natural resources and inheritance.
Libertarianism's cultural influence on American political life — through think tanks (Cato, Mercatus), legal movements (the Federalist Society on the property-rights side), Silicon Valley, and one wing of each major party — has been considerably greater than its electoral performance would suggest. Its critics, both liberal (Rawls, Dworkin, Sen, Elizabeth Anderson) and conservative (Sandel, MacIntyre, Taylor), have argued that its picture of the freestanding self-owning individual and the neutral state that merely protects private exchanges misdescribes both persons and the conditions under which actual markets operate — and that its characteristic policy program, applied consistently, would dismantle much of what modern citizens have understood themselves to be citizens for.