I've seen this term or some variant around here, and it makes no sense to me. Someone want to explain how this crazy ideology came about?
You might have seen my explanation of the term to Scarecrow Akhbar, who conducted one of his trademarked escapes from the thread at that point. As Red Dave noted, socialists' usage of the term "libertarian" actually predates capitalist use of the term that renders "libertarian socialism" a seeming oxymoron in America. For example, the term "libertarian" was first used in print in an 1857 letter by the French anarcho-communist Joseph Dejacque, who later published
Le Libertaire, Journal du Mouvement social from 1858 to 1861. The later French anarchists Sebastian Faure and Louise Michel then founded
Le Libertaire in 1895, which ought to illustrate the term's early usage by anarcho-socialists, largely in an attempt to circumvent anti-anarchist laws. Conversely, the U.S. "Libertarian" Party has only existed since 1971, which means that socialist usage of the term predates its misappropriation by American capitalists by more than a century. As noted by Murray Bookchin, the current American definition of "libertarianism" is merely
"the specious identification of an anti-authoritarian ideology with a straggling movement for 'pure capitalism' and 'free trade.' This movement never created the word: it appropriated it from the anarchist movement of the [nineteenth] century. And it should be recovered by those anti-authoritarians . . . who try to speak for dominated people as a whole, not for personal egotists who identify freedom with entrepreneurship and profit."
However, even apart from the historical definition of the term, we can make an even more dramatic claim that capital and libertarianism are actually incompatible and that "libertarian socialism" is really the
only variety of libertarianism (and socialism, to some extent) that can exist. For example, most libertarian socialists would posit that capitalism is necessarily inimical to the maximization of liberty because of the authoritarian elements inherent in wage labor, which include the hierarchical conditions of the workplace and the effectively oligopolistic seizure of the financial class over the means of production which serves as the basis for the nature of wage labor in capitalism. Such a state of affairs wherein a tiny elite control such expansive resources would rightfully be condemned as authoritarian in nature were it manifested through the vessel of a state. Hence, we'd argue that libertarian socialism is a redundant term because
legitimate libertarianism cannot exist without socialism and legitimate socialism cannot exist without libertarianism. But because "libertarianism" is understood as a laissez-faire capitalist philosophy in this country, we have to use the term "libertarian socialism."
But how would it actually work? I can't picture socialism without government.
That idea is actually based on another misconception about socialism, namely that the authoritarian state capitalism implemented in the USSR and similar countries was a manifestation of it. However, libertarian socialists do not acknowledge this state capitalism as a legitimate implementation of socialism on the grounds that elite party control of the means of production was the norm, rather than the public control of the means of production that socialism necessitates. There are actually few modern socialists that advocate strong government control (the failure of state socialism indicated the folly of that), and will advocate some form of broadly democratic socialism (democratic market socialism is popular, for example) or the more radical libertarian socialism. Libertarian socialists will favor either minimal or no government, which is related to the aforementioned fact that "libertarianism" and "libertarian socialism" were terms first used by anarchists, and anarchism is of course a socialist philosophy that diverged from Marxism some time ago. As put by Peter Kropotkin:
Anarchism, the no-government system of socialism, has a double origin. It is an outgrowth of the two great movements of thought in the economic and the political fields which characterize the nineteenth century, and especially its second part. In common with all socialists, the anarchists hold that the private ownership of land, capital, and machinery has had its time; that it is condemned to disappear; and that all requisites for production must, and will, become the common property of society, and be managed in common by the producers of wealth. And in common with the most advanced representatives of political radicalism, they maintain that the ideal of the political organization of society is a condition of things where the functions of government are reduced to a minimum, and the individual recovers his full liberty of initiative and action for satisfying, by means of free groups and federations--freely constituted--all the infinitely varied needs of the human being.
Libertarian socialism is primarily anarchist in nature, but is also minarchist, just as American "libertarianism" is understood also. That is, all anarchists are libertarian socialists, but not all libertarian socialists are anarchists. For example, council communists, left communists, Luxemburgists and other libertarian Marxists (Anton Pannekoek, etc.) would be examples of libertarian socialists who are not anarchists. Similarly the economic theory of "participatory economics" proposed by Michael Albert and Robin Hahnel is "libertarian collectivist" in nature, but can feasibly be implemented in either minarchist or anarchist society.