Analytical vice, that is.
The libertarian vice is to assume that the quality of government is fixed. The libertarian also argues that the quality of government is typically low, and this is usually the bone of contention, but that is not the point I wish to consider. Often that dispute is a red herring.
If the quality of government is fixed, the battle is then "government vs. market." Not everyone will agree with libertarian views, but libertarians are comfortable on this terrain.
But sometimes governments do a pretty good job, even if you like me are generally skeptical of government. The Finnish government has supported superb architecture. The Swedes have made a good go at a welfare state. The Interstate Highway System in the U.S. was a high-return investment. In the area of foreign policy, we have done a good job juggling the China-Taiwan relationship. Or how about the Aswan Dam for Egypt? You might contest these particular examples but I assure you there are many others.
The libertarian approach treats government vs. market as the central question. Another approach, promoted by many liberals, tries to improve the quality of government. This endeavor does not seem more utopian than most libertarian proposals. The libertarian cannot reject it on the grounds of excess utopianism, even though much government will remain wasteful, stupid, and venal. More parts of government could in fact be much better, and to significant human benefit and yes that includes more human liberty in the libertarian sense of the word.
Libertarians will admit this. But it does not play a significant role in their emotional framing of the world or in their allocation of emotional energies. They will insist, correctly, that we do not always wish to make government more efficient. Then they retreat to a mental model where the quality of government is fixed and we compare government to market.
It is possible to agree with the positive claims of libertarians about the virtues of markets but still think that improving the quality of government is the central task before us. One could love markets yet be some version of a modern liberal rather than a classical liberal. This possibility makes libertarians nervous, thus their desire to fix the quality of government in advance of making an argument. (For one example of this, see Glen Whitman’s commentary.)
Libertarianism and modern liberalism differ in many regards, and usually I am closer to the libertarian point of view. But I am also a contrarian by nature. If you want to make me feel more like a modern liberal, just go ahead and commit The Libertarian Vice.
To be fair, here is my post on the modern liberal vice.
Addendum: Here is a look at drug policy from both libertarian and liberal points of view.