1. Introduction

At first glance, nationalism and libertarianism are like oil and water. In the popular understanding, the former is thought to prioritize collective identity and the national interest, while the latter puts the freedom and rights of the individual first. In his writings, however, Jesús Huerta de Soto, a contemporary economist of the Austrian School, attempts to fuse the two. By reconceiving the nation as a "spontaneous order" separated from the state, he envisioned a libertarian international order.

2. Summary of Huerta de Soto (2023), "A Theory of Libertarian Nationalism"

While Huerta de Soto values the ways in which nationalism has served to overthrow communism and to resist centralization, he points out the danger that, when combined with "interventionism," it gives rise to war and oppression. Using the insights of the Austrian School, he defines the nation as a "subgroup of civil society," a "spontaneous order" constituted by language and culture. Like the market, the nation is a dynamic process that constantly changes, competes, and overlaps, and so attempts to fix it to particular geographical borders are said to generate conflict.

To make peaceful cooperation among nations possible, Huerta de Soto proposes the following "four basic principles."

1. The principle of self-determination: the freedom of each social group to decide which political group (state) it belongs to.
2. Complete free trade: the elimination of protectionism.
3. Freedom of migration: without subsidies from the welfare state or the immediate granting of voting rights, and on the premise of respect for private property rights.
4. A non-state monetary system: a currency system that politicians cannot manipulate, such as the gold standard.

According to Huerta de Soto, if these principles are met, nationalism produces healthy competition. And the role of the state in this system is limited to giving legal form to these four principles. Specifically, he argues that higher political organizations such as the EU or the Spanish state should have the authority to set ceilings on regulation and taxation for lower regional governments (such as Catalonia) and to prevent interventionism (the oppression of citizens) by regional governments.

3. A Critique of Huerta de Soto (2023)

De Soto's theory is useful in that it conceptually separates the nation from the state, but its logical structure contains serious flaws that cannot be overlooked.

(1) A biased understanding of nationalism and the arbitrariness of "National Socialism"

First, Huerta de Soto underestimates the aspect of "individual liberation" that nationalism has historically played. He views the nation objectively, as if it were a unit of competition in a market, and takes existing modernist conceptions of the nation (Catalonia, the Basque Country, and so on) as given premises, but he overlooks the dynamism by which nationalism freed individuals from the traditional status system and formed autonomous subjects.

He also criticizes nationalism that engages in protectionism and regulatory intervention by calling it "National Socialism." This is a powerful piece of rhetoric that clearly evokes Nazism, a political label used to equate today's interventionist regional nationalisms with totalitarianism. This usage carries too heavy a critical connotation and lacks objectivity as an analytical concept for discussing the harms of economic interventionism.

(2) Confusing the political group with the state

When discussing self-determination, Huerta de Soto confuses the "political group" with the "political state." He treats self-determination as people choosing "which political state they want to be included in," but this lacks any imagination of forms of governance other than the coercive apparatus of the "state," or of the possibility of political associations that do not form states. In the end, his theory is developed on the assumption that the existing system of sovereign states is self-evident.

(3) The paradox of "coercion for the sake of freedom"

The greatest point of criticism lies in the paradox that, while professing libertarianism, he ends up endorsing the strengthening of state power as the means to realize it. Huerta de Soto argues that, in order to prevent regional governments from running out of control (interventionism), higher state organizations should have the authority to set and monitor ceilings on regulation and taxation.

This is nothing other than "centralization in order to enforce freedom." This addendum, which preaches spontaneous order and competition yet ultimately relies on top-down restrictions by a higher political authority, is far too statist. The meanings of "voluntary cooperation" and "non-coercion" carried by the four principles themselves are damaged by this addendum, and libertarian nationalism is transformed into a theory that justifies management by a "good dictator."

4. The Horizon of Libertarian Nationalism

Huerta de Soto's theoretical failure lies in his attempt to realize the ideals of libertarianism "by means of the state apparatus." Today, to overcome the barrier between nationalism and libertarianism, the "four principles" Huerta de Soto presented need to be redefined not as coercive legal regulations imposed by the state, but as a ground.

As Mises said, "the only true national self-determination is the freedom of the individual against the state and society"; the core of libertarian nationalism lies not in the rights of the collective but in the rights of the individual. The kind of "ceilings on interventionist regulation set by a higher state" that Huerta de Soto wished for may appear to protect freedom in the short term, but in the long term it carries the risk that this power will be turned against it.

To establish a true libertarian nationalism, rather than relying on "monitoring" by the EU or central governments, we need the resolve to pursue complete decentralization and the freedom to secede thoroughly, and to entrust matters to "competition" in the strict sense, in which regions that adopt bad policies are naturally weeded out by the outflow of residents and capital. Freeing Huerta de Soto's four principles from being tools of statist management, and placing trust in the dynamism of spontaneous order itself: this is the rightful horizon of libertarian nationalism.

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