There has always been tension within the libertarian movement in terms of methodology and philosophical foundations. On one hand, we have the field of praxeology constituting Austrian economics, represented by Ludwig Von Mises, which adheres to a subjective theory of value. On the other hand, we have the field of objective ethics as represented by Ayn Rand, and in many ways in Murray Rothbard's natural law position. There has also been a conflict between a utilitarian and deontological approach to libertarianism.
Ayn Rand, mistakenly in my view, rejected praxeology (or least some vital aspects of it) because of the subjective element within it. She also tried to expand objectivism into some areas that aren't really objective, more in the realm of preferance. On the other hand, Ludwig Von Mises's views, since they were rigidly restricted to the narrow confines of praxeology, could be said to over-emphasize subjectivism at the expense of other considerations. Mises was, in my view, too skeptical towards the idea of natural law and objective ethics.
Praxeology need not be in conflict with natural law/natural rights and objectivist ethics. Properly understood, they can be considered complimentary to eachother. They are two component parts of a larger system. The fact that some things are indeed subjective does not necessarily entail a contradiction of objective ethics, and the fact that objective reality exists and can be discovered through reason does not necessarily erode the factors of interpretation and error. Praxeology does not have to lead one towards ethical subjectivism, and objectivism and natural law theories do not have to lead one towards authoritarian moralism.
Precisely what is objective and what is subjective needs to be defined. Reality and existance are objective. Human judgement of reality and existance can be prone to error, but the existance of error does not mean that reality and existance are subjective or that it is impossible to discover truth about them. All attempts to argue against existance reaffirms existance by performative contradiction. Furthermore, the truth objectively exists no matter what people's judgements may be. Someone can be convinced that the sky is purple or that apples fall upwards, but that would not make it true, no matter how much they wish that it were so.
Thus, the radical subjectivist idea that reality is determined by our perceptions, that our minds create the material world around us or that "life is just an illusion", must be rejected. All philosophy and science, which is by definition the quest for knowledge, must implictly accept that truth exists and is capable of being discovered through reason, and it must implictly accept that reality is determined by natural phenomen that may very well be beyond our control. A philosophy that rejects such things can hardly be considered a philosophy at all, since a quest for knowledge or love of wisdom becomes utterly pointless.
On the other hand, the hard determinist position is troublesome. Hardcore determinists seem to think that nature, particularly psysiology, predetermines our actions in the absolute, and thus they conclude that there is no such thing as "free will". But people's deliberate and free choices do determine the course of reality, the future, in various ways. That is, the will does have an effect on reality to the extent that one chooses between means to a desired end. Since there are multiple possible means to any given end, the future is not pre-determined in terms of what means people will persue. Causality does not eliminate free choice. It merely means that choices have consequences.
How is truth discovered? Truth is discovered when a conflict between one's ideas and hard facts are resolved in favor of the hard facts, when one's ideas are modified as such. Noone is born with any specific knowledge of truth because life has not been experienced yet. This is not to say that every human is born as an absolutely blank slate so much as that their capacity to discover truth is considerably hampered in the early stages of life and is restricted mostly to mere biological functions. While people's mental and physical abilities are predetermined biologically, their application of those faculties are not. Truth is discovered through experience and the application of logic.
Since existance is an objective fact, it becomes necessary to define different things that exist. Different things have different properties. For example, a rock exists, and a rock has specific properties. Objective scientific truth is discovered when such properties are properly identified. Life entails specific properties that a rock does not possess (such as biological reproduction and conciousness). A human being is specific form of life, and thus also has specific properties. Each form of life shares some very basic properties, but they all also vary in their properties. In either case, truth about human nature is discoverable by properly identifying the properties that are common to all human beings.
A doctrine that Ludwig Von Mises often wrote in opposition to is scientism. Scientism is not to be confused with science itself. Scientism the notion that the only way to reach truth is through empiricism and statistical testing such as is commonplace in the natural sciences. But this is not so in the social sciences. That is, there is no rational way to predict and plan human behavior with absolute accuracy because there are so many variables and so much diversity. And there are many areas outside of human behavior that are also not exactly predictable. In either case, statistics compiled with respect to human behavior can be very misleading, particularly because it is impossible for the compiler of the data to really know the intentions or preferances of all of the people involved. This is because preferance is subjective.
More specifically, what is subjective is people's demand as consumers. Questions such as what brand of car or clothes to buy, which type of music is better, which industry to invest in, are utterly subjective to the individual. Happiness is subjective because different stimuli or economic ends happen to please some people while displeasing others. This does not mean that truth is subjective. It means that people's mere preferences and asthetics are diverse and subjective. Happiness and truth are two different concepts. It may bring you pleasure to do risky things. It would be preposterous to argue that the thing actually makes the person unhappy. It would be sensible, on the other hand, to argue that the risks are dangerous and may make you unhappy in the long-term, in the future.
Some followers of the philosophy of objectivism have jumped head first into absurdity by trying to argue for an objectivist asthetics and literally swallow Ayn Rand's opinions on everything from art to music as if it were objective fact. But such matters are within the realm of what makes people happy, not truth statements. There is a huge difference between a truth statement and a statement of what makes one happy. "I like capitalism" in itself is not a truth statement, it is a statement of preferance. "Minimum wage laws lead to unemployment for reasons X, Y and Z" would be a truth statement, since it is trying to logically argue that something is true. What brand of cigarettes is better, or wether or not to smoke them, is not based on any objective truth so much as what one's taste buds prefer and what one's budget is like. Since this varies from individual to individual, it is subjective.
This subjective aspect of human choice is an important thing to keep in mind. People should not be forced into making particular asthetic choices, let alone uniformly. When the preferences of the consumer have been replaced by the preferances of the central planner, then one particular asthetic judgement is being forced onto the masses at large at their own expense. It becomes impossible to calculate the preferances of the masses at large even if one wanted to try to emulate them. It is impossible to universalize consumer preference. The individual consumer is the person who can determine best what their preferences are. Attempts to statistically measure and control demand through central planning are in vein.
Ethical subjectivism is a separate thing from asthetic subjectivism. Ethical subjectivism should be rejected and asthetic subjectivism accepted. Objective ethics refers more to questions of the just and unjust use of force (the means), while mere preference has to do with desired ends. One can reject the means that someone chooses on the grounds of objective ethics, while maintaining that the person's desired ends are subjective and/or irrelevant to wether or not the means are justified, or maintaining that one agrees that the ends are good. On the other hand, one can support the means that someone chooses on the grounds of objective ethics, while maintaining that you disagree with their desired ends on asthetic grounds.
The problem with ethical subjectivism is that it inevitably leads in the direction of hedonism and narcissism. In practise, it means that there are no real guidelines for determining proper or improper human conduct. Consequentially, any conduct that most people would recognize as being wrong (such as murder, theft and rape) is implicitly "justified" by ethical subjectivism. An objective ethics of some sort is needed to fix this problem. Logical consistancy is a prerequisite for a political or economic position to even potentially be valid.
This is also true of utilitarianism. Murray Rothbard's criticism of utilitarianism is a very important contribution to the libertarian paradime. Utilitarianism tends to attempt to "justify" things that can easily be seen as unethical as if they were asthetics. But asthetics is a subjective preference for ends, while questions such as wether or not to use force have to do with the means to ends. My desired ends may be to obtain wealth, but that would not necessarily justify stealing to obtain it. Utilitarians often attempt to justify the means by pointing to the ends, particularly short-term ends. The mere fact that someone "preferred" to use force (I.E. found it to be in their utility) can be sufficient enough for a utilitarian to support such an action.
It is impossible to consistantly apply a principle using only utilitarianism as a methodology. Any principle can be overturned so long as a somewhat convincing arguement is made that it produces utility to someone in some way; and in a "conflict of utilities" the "winner" is arbitrarily decided by the utilitarian's own judgement. The "utility" of a murderer is to kill someone else, and the action of murdering is the means to that end. At best, utilitarianism can be somewhat useful in terms of demonstrating the negative or unintended consequences of certain actions (which Ludwig Von Mises's version of utilitarianism could be said to represent), but it is horrible as the basis for an ethical system.
While it is considered antiquated by many, natural law and natural rights theory, as well as the broader implications of evolutionary theory, provides a fairly valid fundamental framework for an ethical system. Guidelines for human conduct can be discovered through reason by properly identifying human nature and its relationship to the physical world. Man can make mistakes in the attempt to do this, but that does not mean that it is subjective or undiscoverable, it means that further adaptation is necessary. Natural law is a "process" of naturalization by which human behavior adapts to a mode that is necessitated by one's environment. "Natural order" emerges when people have adequately adaptated. On the other hand, the further people are from adapting to natural laws the harder survival becomes and the lower the quality of life is. This lack of success could be said to be an incentive to adapt further.
It is through such a process that objective values are discovered and accumulated over time. The human race has learned, through trial and error, that certain modes of conduct are necessary in order for both the individual's well being and "society" to flourish. In short, man has a natural incentive towards social cooperation because the consequences of not engaging in lead to a decrease in well-being, even to the point of poverty and death. An important factor in this adaptation process is empathy. An individual learns to abstain from harming others by knowing what it's like to be harmed, by being able to live mutually with others. The more that humans evolve socially, the more that they are able to overcome their primitive impulses and interact with others in a mutually beneficial manner.
The practical universal outlawry of murder, theft and rape in the vast majority of the world is the sign of an adaptation to what could be called the natural law. They represent, or rather are based on, objective ethics that have been made obvious to people over the course of many years. Most people, in their everyday lives, do not engage in these actions. The human race can be said to be mostly adapted in this particular case. However, these very same actions, on the political level, have not yet been considered unethical by the masses of people. To this extent the human race has not yet adapted and therefore has alot of work cut out for it. Ethics on the political level always lags behind ethics on the personal level. That is, for most people there is always an ethical double standard with respect to standards of conduct for the average person vs. people with political power.
In summary, the following points stand clear:
1. Praxeology and objective ethics can be made compatible and harmonious.
2. Reality is real. Duh.
3. Truth is discovered, not pre-programed into our minds.
4. Statistical empiricism fails as a methedology in the social sciences.
5. Economic value and mere preferance for ends or happiness is subjective, and this does not have to conflict with objective ethics.
6. Ethical subjectivism ignores that our environment at least hints that we must adapt via particular modes of conduct, and it becomes bare hedonism in practise.
7. Utilitarianism ignores ethical considerations in the name of asthetics and subjective definitions of happiness, using "psychic utility" and "psychic harm" as the only standards of conduct.
8. Ethics and social organization are discovered and implemented in an evolutionary process and result from the universalization of principles to each individual.