Summary
Some libertarians argue that the implications of libertarianism for foreign policy are unclear.  In this chapter, Rothbard argues that libertarianism implies strict “isolationism”:

Pending the dissolution of States, libertarians desire to limit, to whittle down, the area of government power in all directions and as much as possible… In foreign affairs, the goal is the same: to keep government from interfering in the affairs of other governments or other countries. Political “isolationism” and peaceful coexistence–refraining from acting upon other countries–is, then, the libertarian counterpart to agitating for laissez-faire policies at home. The idea is to shackle government from acting abroad just as we try to shackle government at home. Isolationism or peaceful coexistence is the foreign policy counterpart of severely limiting government at home.

But couldn’t one government’s military actions increase human freedom?  Not in a morally permissible way.  Suppose, he asks, that the imaginary nation of Walldavia tries to defend the freedom of Belgravia against an invasion from Graustark?  It’s still wrong:

[W]hen Walldavia, or any other States, leap into the fray [they] are themselves expanding and compounding the extent of the aggression, because they are (1) unjustly slaughtering masses of Graustarkian civilians, and (2) increasing tax-coercion over Walldavian citizens. Furthermore, (3) in this age when States and subjects are closely identifiable, Walldavia is thereby leaving Walldavian civilians open to retaliation by Graustarkian bombers or missiles. Thus, entry into the war by the Walldavian government puts into jeopardy the very lives and properties of Walldavian citizens which the government is supposed to be protecting. Finally, (4) conscription-enslavement of Walldavian citizens will usually intensify.

After laying out this hard-line, Rothbard defies Cold War orthodoxy.  The U.S. is no hero: “empirically, taking the twentieth century as a whole, the single most warlike, most interventionist, most imperialist government has been the United States.”  And despite its monstrous domestic policies, Rothbard argues that the Soviet Union’s foreign policies haven’t been all that bad.  Lenin pioneered the theory of “peaceful coexistence,” and…

As time went on, furthermore, this policy was reinforced by a “conservatism” that comes upon all movements after they have acquired and retained power for any length of time, in which the interests of keeping power over one’s nation-state begins to take more and more precedence over the initial ideal of world revolution. This increasing conservatism under Stalin and his successors strengthened and reinforced the nonaggressive, “peaceful coexistence” policy.

What about the Nazi-Soviet pact and the Red Army’s later occupation of Eastern Europe?  Rothbard’s unimpressed.  The Nazi-Soviet pact was merely an attempt to restore Russia’s pre-WWI borders, and its post-war expansion was just a byproduct of the Soviets’ defensive war against the Nazis:

[I]n order to defeat the invaders, it was obviously necessary for the Russians to roll back the invading armies and conquer Germany and the other warring countries of Eastern Europe. It is easier to make a case for the United States being expansionist for conquering and occupying Italy and part of Germany than it is for Russia’s actions–after all, the United States was never directly attacked by the Germans.

While he condemns the later Soviet invasions of Hungary and Czechoslovakia, Rothbard insists that the broader world should not feel threatened by them:

Their only use of troops has been to defend their territory in the Communist bloc, rather than to extend it further. Thus, when Hungary threatened to leave the Soviet bloc in 1956, or Czechoslovakia in 1968, the Soviets intervened with troops–reprehensibly, to be sure, but still acting in a conservative and defensive rather than expansionist manner.

Rothbard closes the chapter with a defense of multilateral disarmament:

Not only should there be joint disarmament of nuclear weapons, but also of all weapons capable of being fired massively across national borders; in particular bombers. It is precisely such weapons of mass destruction as the missile and the bomber which can never be pinpoint-targeted to avoid their use against innocent civilians…If it is illegitimate for government ever to employ such weapons, why should they be allowed to remain, fully loaded, in their none-too-clean hands?

Critical Comments
Rothbard’s deduction of isolationism from libertarianism is basically correct.  The main slippage is his insistence that libertarians focus on limiting the crimes of their own government.  What if your own government is relatively benign, and another government is murdering millions?  Mightn’t it make more sense for libertarians to focus their protests on the greater evil, even if it is further away?

In purely consequentialist terms, too, isolationism deserves a lot more credit than it gets.  WWII, widely seen as the proof of the necessity of an active foreign policy, left half of Europe under Soviet rule, and put Mao Zedong, the century’s greatest murderer, on the Chinese throne.  Is that what counts as “American success”?  In a similar vein, it seems likely that the U.S. wouldn’t have to worry about terrorism if it had simply stayed out of the Middle East altogether.

When it comes to his Cold War revisionism, though, Rothbard let his hatred of the U.S. government blind him to the relative benevolence of U.S. foreign policy and the absolute malevolence of the Soviet Union. 

When I was eighteen years old, I met Rothbard and challenged him on these questions.  He basically told me to go read some actual history.  I followed his advice, reading most of his favorite New Left historians.  I wasn’t impressed.  Furthermore, the more I read about the history of the Communist movement, the more I realized that Lenin and Stalin really did command an international totalitarian conspiracy of unthinkable proportions.  I particularly recommend Franz Borkenau‘s World Communism and Burnett Bolloten’s The Spanish Civil War: Revolution and Counterrevolution.

The most absurd omission in Rothbard’s U.S.-U.S.S.R. comparison, though, is that he pays zero attention to how the two countries acted in victory.   Doesn’t that have anything to do with who deserves to be named the century’s biggest imperialist?

While it’s true that the U.S. can be a truly barbarous combatant, abject surrender to American occupation leads to amazingly good results.  The American occupation of Germany and Japan clearly paved the away for the most libertarian policies these countries had ever known, not to mention peace and prosperity.

On the other hand, Soviet occupation almost invariably led to mass murder, mass deportations, wide-scale slave labor, collectivization, famine, and other horrors.  Abject surrender was no protection, as the citizens of the Baltics learned in 1940-1.  To say that sovietizing Eastern Europe was all part and parcel of rolling back Hitler’s invasion is absurd.  The creation of the Soviet bloc may have been opportunistic, but it was still a clear-cut case of an “expansionist” foreign policy.

To be blunt, the main thing decent people around the world have had to fear from the U.S. is that they’ll get killed in the crossfire if their government or fellow citizens resist.   The main thing decent people around the world had to fear from the U.S.S.R., in contrast, was that they would experience the standard treatment the Soviets dealt to everyone under their control.