Forgetting the public good
Rand's Objectivism is a polar reaction to Russia's totalitarian state control when she was a girl in the early 20th century. Objectivism asserts that "the proper moral purpose of one's life is the pursuit of one's own happiness (or rational self-interest), that the only social system consistent with this morality is full respect for individual rights embodied in laissez-faire capitalism." (Wikipedia: Objectivism)
People often invoke Adam Smith's observation of the Invisible Hand in justification of the premise "selfish behavior benefits everyone." However, this premise is an over-extension of Smith's idea. His use of the Hand was to observe that in spite of the selfish behavior of the rich, some benefit did still trickle to the poor. He did not believe that selfishness itself was a virtue, nor the mechanism through which the world should operate. (Spectrum Magazine: Adam Smith: Selfishness or Self-Interest?)
A republic is one of the most libertarian forms of government, due to its emphasis of personal rights and putting the power of government into the hands of people regardless of social standing or wealth. Yet the Republic in its very etymology is defined as promoting the good of the state: res publica "public interest, the state," from res "affair, matter, thing" + publica, fem. of publicus "public"
In Thucydides's "Funeral Oration of Pericles," he asserts the success of the Athenian state is its moderation between personal freedom and responsibility to the state:
"There, far from exercising a jealous surveillance over each other, we do not feel called upon to be angry with our neighbour for doing what he likes, or even to indulge in those injurious looks which cannot fail to be offensive, although they inflict no positive penalty. But all this ease in our private relations does not make us lawless as citizens. Against this fear is our chief safeguard, teaching us to obey the magistrates and the laws, [emphasis mine] particularly such as regard the protection of the injured, whether they are actually on the statute book, or belong to that code which, although unwritten, yet cannot be broken without acknowledged disgrace."
Jefferson's ideal government "which governs least" still governs. Abuses of the state do not imply the state itself is evil or unnecessary. We should not trust government to act unmonitored. The untried amoral faith of Rand should not overwrite our understanding of human nature. Like Thucydides and Jefferson, Libertarians should reject philosophical absolutist extremism and cultivate a deep ambivalence.