So does this mean that Ron Paul's libertarianism is merely a thin veneer covering a bedrock of tribalist white-supremacist paleoconservatism? Well, no, I don't think so. Sure, the tribalist white-supremacist paleoconservatism is there. I just don't think it's incompatible with libertarianism.
I have often remarked in the past how libertarianism - at least, its modern American manifestation - is not really about increasing liberty or freedom as an average person would define those terms. An ideal libertarian society would leave the vast majority of people feeling profoundly constrained in many ways. This is because the freedom of the individual can be curtailed not only by the government, but by a large variety of intermediate powers like work bosses, neighborhood associations, self-organized ethnic movements, organized religions, tough violent men, or social conventions. In a society such as ours, where the government maintains a nominal monopoly on the use of physical violence, there is plenty of room for people to be oppressed by such intermediate powers, whom I call "local bullies."
The modern American libertarian ideology does not deal with the issue of local bullies. In the world envisioned by Nozick, Hayek, Rand, and other foundational thinkers of the movement, there are only two levels to society - the government (the "big bully") and the individual. If your freedom is not being taken away by the biggest bully that exists, your freedom is not being taken away at all.
In a perfect libertarian world, it is therefore possible for rich people to buy all the beaches and charge admission fees to whomever they want (or simply ban anyone they choose). In a libertarian world, a self-organized cartel of white people can, under certain conditions, get together and effectively prohibit black people from being able to go out to dinner in their own city. In a libertarian world, a corporate boss can use the threat of unemployment to force you into accepting unsafe working conditions. In other words, the local bullies are free to revoke the freedoms of individuals, using methods more subtle than overt violent coercion.
Such a world wouldn't feel incredibly free to the people in it. Sure, you could get together with friends and pool your money to buy a little patch of beach. Sure, you could move to a less racist city. Sure, you could quit and find another job. But doing any of these things requires paying large transaction costs. As a result you would feel much less free.
Now, the founders of libertarianism - Nozick et. al. - obviously understood the principle that freedoms are often mutually exclusive - that my freedom to punch you in the face curtails quite a number of your freedoms. For this reason, they endorsed "minarchy," or a government whose only role is to protect people from violence and protect property rights. But they didn't extend the principle to covertly violent, semi-violent, or nonviolent forms of coercion.
Not surprisingly, this gigantic loophole has made modern American libertarianism the favorite philosophy of a vast array of local bullies, who want to keep the big bully (government) off their backs so they can bully to their hearts' content. The curtailment of government legitimacy, in the name of "liberty," allows abusive bosses to abuse workers, racists to curtail opportunities for minorities, polluters to pollute without cost, religious groups to make religious minorities feel excluded, etc. In theory, libertarianism is about the freedom of the individual, but in practice it is often about the freedom of local bullies to bully. It's a "don't tattle to the teacher" ideology.
Therefore I see no real conflict between Ron Paul's libertarianism and his support for the agenda of racists. It's just part and parcel of the whole movement. Not necessarily the movement as it was conceived, but the movement as it in fact exists.
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