Who discounted what? Smith wasn't a proto libertarian nor was he libertarian. He's not a predecessor in any sense whatsoever. He's the father of modern capitalism just as Locke is the father of Liberalism. Libertarian ideas derive from their work not vice versa. In addition to that, Libertarian arguments and theories can be applied to the past to see how logically sound they are. Your original assertion that Libertarian ideas can't be discredited because the term didn't appear until 1950s was a fallacious argument. Just as your comparison of Libertarian ideas and their influence by conflating them with the influence of Locke and Smith. That's a disjointed comparison that has no bearing on your claim, which by the way, I didn't disagree with. Libertarian ideas and school of thought have certainly had their influence especially in America. That's completely different from me claiming that there are no Libertarian countries, that is, countries that strongly reflect Libertarian ideas, values, and theoretical framework. Those countries simply do not exist.
Tell me. When was the last time US National Debt was 0$ or even anywhere close to that? Debt needs to be paid back... government debt does not work the same way as your family's checking account. Europe can easily, easily pay for a big and powerful military without compromising their living standards. Just as American can easily afford a universal healthcare system. The issue isn't the money, it's the political will, special interests, and what we all simply describe as "politics". The idea that we are short on money is misleading. People are short on money, a government that has access to quite literally limitless capital resources doesn't. Stop trying to talk down to me from a position of authority when your knowledge on the subject is superficial at best.And then you go in circles by again failing to understand that debt needs to be paid back.
You're a funny little man, you are.
A classical liberal isn't a libertarian. I suggest you study the period of great intellectuals like Locke, Smith, Hume, Mills, Spencer, Mises, and many more. Mises and today's various "shades" of Libertarianism is far more individualistic and anti-state than Locke and Smith's theories on the relationship between state power and individuals. Mills is between Mises and Locke. Spencer is closer to Mises than to Mills. This is ultimately a very simplified model, but the point is that if Locke was reincarnated and brought up to date, he would have a lot to disagree on with people like, I don't want to say it, but Ron Paul. Quite frankly, I can't think of anyone off the top of my head. I'm at work waiting for a Judge.
These are not free markets and you will hear people from all kinds of different spectrums agree. From the most mild libertarian to the Marxist. America is a mixed economy that allows competition and property ownership, while at the same time having a large amount of social spending. The Government is responsible for a huge amount of healthcare spending as well as education, national defense, and basic services. All of these things are emulated by the most successful countries on Earth. You are under a delusion if you think we live in a free market, we don't. It is strictly a mixed market economy. There are many sectors where the government owns things, holds a monopoly, and determines who gets access to what resources, just as there are many sectors where the government has almost no presence in.America is a free market, the U.K. is a mixed economy, but mostly still unregulated. Even the Royal Mail had to be privatised, we're learning economic planning doesn't work the hard way, the NHS is next.
In Soviet Russia, Venezuela etc and other socialist countries, people have very little personal freedoms, as everything belongs to the state. Cuba is the only mildly successful full socialist model I know of, and even then you literally can't rent out a spare room without government approval.
Letting the free market decide doesn't lead to ruin. It is the difference between North American prosperity, and the post-Guavra etc mess South America is in. It is the basis of the Western world's prosperity.
So no, stop propagating the lie that they are successful solely because of the free market. America is successful because of a number of factors, not the least of which is an incredible geographic and demographic advantage over all of her peers that no other country can realistically match. The calculus is evening out on that but the historical advantage holds.