If you have watched the Donahue episode with Friedman and that nut Ayn Rand from the mid seventies, the salient difference between them was the economist’s acknowledgment of differences in private and social costs, transaction costs, free-riders, and other problems that contractual systems have problems dealing with. The interventions advocated by libertarians or classical liberals all mitigate problems with writing perfect contracts and settling disputes and are designed to maximize aggregate present and discounted future utility. Any deviation from classical liberal principles would have to be a system that deals with inefficient contracts better than the stated exceptions.

(Don’t let the fact that I agree to more exceptions to the general rule fool you. I think that libertarian principles are the appropriate starting point for most policy analyses. We ought to always ask, “why regulate?”)