I believe that the government that governs best governs least, but I would not call myself a through-and-through, principled libertarian. I’d prefer that the federal government be severely limited in its powers. Generally, I believe that governmental powers should be no greater than inversely proportional to a government’s scope. I believe such a notion is compatible with subsidiarity.
Power can be regarded as the antithesis of liberty. For every power that a governing body has over a person, that person has lost some amount of liberty. Such an arrangement may be either voluntary or involuntary. Scope can be conveniently, though imperfectly, defined by the number of people proximately affected by a government’s policies, with particular importance placed in those people directly affected (i.e., the governed). Scope could also be thought of in terms of locality.
The narrower the scope (i.e., the smaller the population or the smaller the locality) of a governing body, the more power can be entrusted to it. Why? Because of competition. If a neighborhood’s rules about lawn care are too strict, a club’s by-laws too silly, or a town’s laws too Puritanical for your tastes, you are free to leave. The larger and less avoidable a governing body is, the less power should be entrusted to it. Why? Because one’s ability to leave is limited by practicalities. At the highest level (i.e., the whole planet), leaving is obviously an impossibility. The national level isn’t much better, because there are substantial costs (financial, emotional, etc) incurred by emigrating. Furthermore, the greater the scope of a governing body, the more diverse those governed are likely to be. Thus, in order to be equitable, the laws with which the body governs must be broadly representative.
Under such a scheme as I’ve outlined, people retain a great deal of freedom, including the freedom to associate in ways that limit their freedom. This scheme is compatible with subsidiarity because as scope increases, power decreases. That is, each level of government handles only those tasks that lower levels cannot or should not handle, and only those that are of universal concern to those governed.