Libertarians generally argue that the state is wrong in controlling private property except where necessary to prevent direct violations of negative liberty on the grounds that private property is necessary for adequate freedom. However, private property can be used as a means of social control just as national sovereignty can, often to similar extents of control with similar origins, for private property are more alike than different except as a matter of scale.
Basically, the relevant similarities between the state and private property over land are so great that private property is effectively like a small scale state, and states are like property on larger scales even though states, like corporations I'd add, are controlled by many individuals.
It's therefore special pleading for libertarians to treat the state as if it had little or no right to control it's territory while treating treating owners of corporations and other private assets as possessing near absolute rights.
Consider some of the following similarities between private property and national sovereignty:
1.Origins: In the case of national sovereignty, an individual or group may find and claim territory as sovereign by finding it, stealing it, or bargaining for it. Likewise, individuals and groups may attain private property in the same manner. Also, private property may expand as state territory may expand.
2. Hierarchy: Just as sovereign state territory operates under a particular hierarchy with rules designating and regulating authority, so does private property. Private property could be controlled by a single individual or through complicated procedures and bylaws. Consider corporate stockholder conventions, corporate bylaws, and more generally, freedom of contract as examples of private hierarchy and institutional rules.
3. Control: Like sovereign states circumscribe personal conduct within their boundaries, so do private property owners within their property (e.g., a mall may restrict speech on its territory just as the state may limit speech within its territory). Even abstract institutions such as corporations and government agencies limit behavior of those operating within the institution or using the institution (e.g., a corporation may control its employees as a government agency does. Also, a government agency may stipulate the conditions and terms under which a citizen may use its services just as a corporation may). Further, the state regulates private property within its borders just as landlords and gated communities regulate the behavior of their tenants and their properties.
4. Interchangeability: Private property may become public property (e.g., through sale or confiscation) while public property may become private property (e.g., through privatization, sale, and, perhaps rarely, through force [e.g., consider past cases of mercenaries and private armies. The Dutch East India Company once had its own army]).
Please note that the previous list of similarities apply equally well to land as it does to more abstract entities (e.g., corporations share the same similarities listed above as agencies though their aims may vary).
Even today, overlap frequently exists between the private and public sectors. Privatization (e.g., school voucher programs, private prisons, private police, military contractors, etc.) and the use of public domain in service of business interests are examples of such overlap. Even where these sectors do not clearly overlap, striking similarities sometimes exist between private and public entities. For instance, oil companies act as keepers of the commons by claiming ownership over natural resources. One might also consider the case “innovators” who patent natural phenomena such as human genes (though one might reasonably argue that patents are still necessary to motivate discovery in such cases just as private property might be necessary to motivate oil drilling. However, I’m unsure of whether such incentives are truly necessary and would need to conduct more research before developing a sufficiently certain conclusion).
Private property does not obviously maximize personal liberty, at least private property as libertarians wish it to be defended from state intrusion. Privatization inevitably leads to corporatism when not reigned in. Once corporations are in power, they, like monopolies, have every incentive to raise prices and lower overhead costs. Rent seeking among business interests would only be worse once they operated all major government functions (e.g., tax collection, prisons, military, police, education, etc.). Libertarians obviously don't intend rent seeking to occur, but that would be the long-term consequence of full privatization in a libertarian state.
Further, even negative liberty requires physical resources in order to accomplish certain goals; negative liberty is valued not inherently but because of what ends it is used to accomplish.
Scale is what characterizes the primary differences between private and public institutions (while the private sector does not have its own dedicated police force, it can count on public law enforcement). “Scale” here refers quantitative differences in such features as land area, number of parties involved and relative authority (e.g., a landlord controls his apartments in which tenants live, but the larger and more powerful state regulates the landlord’s property).
In summary, private property and state institutions are more alike than different except as a matter of scale.