Gandalf the. . . Libertarian

Sooner or later every beloved literary character falls victim to some ideologue who tries to shoehorn him into a pet philosophy. My goal here is far more modest: to observe the character of Gandalf as consistent with Tolkien's philosophy of nature. I have chosen the appellation libertarian mostly out of desperation, libertarianism being the only recognizable philosophy with any principled and pervasive antipathy toward the use of force. Tolkien's own opposition to force included the political as well as natural.

"The modern world meant for [Tolkien] essentially the machine. . . He used ["machine"] very compendiously to mean. . . almost any alternative solution to the development of the innate and inherent powers and talents of human beings. The machine means, for him. . . the wrong solution: the attempt to actualize our desires, like our desire to fly. It meant coercion, domination, for him the great enemy. Coercion of other minds and other wills. This is tyranny. But he also saw the characteristic activity of the modern world is the coercion, the tyrannous reformation of the earth, our place." – Christopher Tolkien

We see in Middle Earth, then, tyranny in the obvious form of Sauron's political control of the free peoples, but also from Saruman, and it is in fact this tyranny which is more instructive insofar as it is multifaceted.

1. He controlled the land via his industrious machines.
2. He sought political domination, by way of the One Ring, to order all things according to his special wisdom. 
3. He through his extraordinary powers of persuasion sought to coerce people for his own ends. Tolkien calls him subtle in speech but we might appropriately call him in Greek δεινός/deinos, or great and terrible with respect to speech.
4. He assumed political authority in heading the White Council. 

In each instance Gandalf is opposed to Saruman.

1. Where Saruman controlled the land, Gandalf was itinerant.
2. Where Saruman sought the One Ring, Gandalf rejected it. Moreover, while he possessed the ring Narya, its power and purpose were not domination but of preservation and rekindling hearts, Gandalf's mission.
3. Where Saruman seeks to persuade Gandalf finds common cause and mutual self-interest (if that's not too libertarian for you) as in the case of the quest for Erebor.
4. Gandalf refused to head the White Council, rejecting political means and preferring to have "no ties and no allegiance" except to those who sent him.

Most different of all, though, Saruman studied the "devices of Sauron of old" and the Rings of Power, their making and history. Even though he earlier sought to learn with the purpose of destroying evil, Tolkien describes Saruman's "desire of mastery" as having grown great. We cannot say for certain whether only the knowledge itself corrupted him, but surely knowing the arts of evil contributed to his downfall. Elrond's statements that, "The very desire of it corrupts the heart. Consider Saruman." and, "Nothing is evil in the beginning. Even Sauron was not so." suggest the corrupting influence of power. As soon as one ponders the ways of domination, they work their way into once noble plans.

We should pause on that for a moment, the perversion of noble plans. It is facile to say that "power corrupts" and "plans go awry," but think of how truly sad it is to fall from grace, to see the flame of the good die. How pitiful for a skilled and brilliant spirit tasked with the highest good, a sacred good, to have fallen to the uttermost depths of lust and tyranny and to have perverted himself and his trust. Howard Shore brought out the gravity of Saruman's fall in his score to Gandalf's confrontation with the fallen wizard in Peter Jackson's 2001 film adaptation. Jackson, not without reason, played the scene for a laugh with the dueling geezers, but Shore picked up on the profane thread of Saruman's transformation, the unholy perversion of the good.

In contrast, Gandalf tried to fulfill his limited role of "messenger" to the peoples of Middle Earth and to move, "all living things of good will to valiant deeds." Indeed Gandalf seems to be reminding Saruman of his mission when, after Saruman confesses his plans to rule with the ring, Gandalf responds that he has only heard such folly from the emissaries of Mordor, suggesting that Saruman's proposal is the very antithesis of their mission. It was not the wizards' job to to coerce, either Sauron directly or the free peoples to oppose Sauron, but to kindle, that is to cultivate, the good which would by nature oppose evil. In contrast to Saruman's obsession with means, Gandalf brought purity of purpose and, instead of a desire to oppose force with might, a faith in the agency of the good and meek.

Consider Gandalf's proposal to Elrond that Merry and Pippin be permitted to go with the ring-bearer instead of some great elf lord:

this quest may be attempted by the weak with as much hope as the strong. Yet such is oft the course of deeds that move the wheels of the world: small hands do them because they must, while the eyes of the great are elsewhere. . . it would be well to trust to their friendship rather than to great wisdom.

How striking, to put all hope not in force, not in conscripting men to fight Sauron nor in matching the Dark Lord in might, but in a bond of love and fealty. To venture slightly off-canon, in his film of The Hobbit, writer-director Peter Jackson gives Gandalf a few lines which seem to sum up the wizard, and libertarian, philosophy:

Saruman believes that it is only great power that can hold evil in check, but that is not what I find. I've found it is the small things, everyday deeds of ordinary folk, that keeps the darkness at bay, simple acts of kindness and love. Why Bilbo Baggins? Perhaps it is because I am afraid, and he gives me courage. 

No grand plans, no machines and spies and lies and craft. No system of force, just people doing good. And how beautiful that Gandalf should take courage, what he was meant to kindle, from Bilbo, in whom the wizard awoke something Tookish and adventurous, some spirit willing to take a personal risk for the good.