Freehold by Michael Z. Williamson. I am at heart a libertarian, but in all fairness this book is sorta like libertarian porn. Because libertarian societies have difficulties coexisting with non-libertarian societies (we have a lot of people in current society who take and don't give, and any change from that will not be peaceful) Michael simplifies things and allows a libertarian society to come about with the introduction of star travel.
Basically a bunch of like minded libertarians founded Freehold and let it grow into the society we see in the first 2/3's of the book. But then the libertarian's favorite bad guy, the UN (the biggest, most bureaucratic and ineffective government out there) comes in and messes things up.
The whole story is told from the perspective of Kendra Pacelli, a member of the UN Peacekeeping Force who is set up and forced to flee to Freehold. She is slowly introduced to the Freehold society (and by proxy the reader, of whom some of these concepts is quite foreign) and to it's military.
It really is a fun read and is a nice dream.