Those who favor limited government shouldn’t ignore the virtue factor. American politics is awhirl. Donald Trump’s transformation of the right is the clearest sign of it. But the left is reborn, too—in outraged opposition to the new president and with the example of Bernie Sanders pointing his young admirers toward democratic socialism. Any ideology that fails to adapt to this radically altered environment will die. Can libertarianism, a philosophy at odds with Sanders’s democratic socialism as well as Trump’s populist nationalism, survive? Its formulas are well known: gun rights and gay...