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I mean, I think we've already created a society where humans aren't "from top to bottom" racist.
Humans will always be tribal, but I think that different circumstances can turn the dial of how much that tribalism affects their behavior in practice. Having a food-rich, water-rich society is a great starting point for interracial harmony. Adding men with guns forcing people not to act racist, and a set of societal institutions that are designed to brainwash people to be even less racist, and I think you've got the "best" possible form of sanding that bit of human nature off.
You can't change human tribalism, but you can make it less salient depending on how you constitute society.
So why is the inability to solve bigotry running from top to bottom of the entire society a point against libertarianism, but not against the system you support?
Because, I don't think most traditional libertarians support the "men with guns forcing people not to act racist" part of the equation, and I think that is a central part of how the idealized form of modern American politics actually works in practice.
I still call myself a "state capacity libertarian" or "liberaltarian" because I want the lightest touch version of this in practice. I'm fuzzy on it, but I think I'd limit it to, say, public schools, employment, banking, and housing. Men with guns can force people to not discriminate in those domains, and then we can leave the people free to discriminate everywhere else in society.
I'm pretty sure that the forced integration of hospitals, hotels, gas stations and public schools that happened at gunpoint in the United States is the only realistic way that could have happened. I'm open to being proven wrong on this point. I would love to be pointed to real world historical examples of oppressed, othered minorities being successfully integrated into wider society without the state forcing the issue.
Also, I think the problem of petty tyrants is not limited to racism. It is just one of the easiest to describe examples. I think even something as simple as, "I'm the black sheep of my family, and the pariah of this small town" can be a case where petty tyranny makes living a happy, fulfilling life difficult. The anonymity of a corporation like McDonald's or Walmart makes us "exile-proof." Even if I reach my lowest point, if I become the most socially hated and cancelled person, the wonderful thing about Capitalist Liberalism is that it shapes us into interchangeable cogs, and I can still get a job at McDonald's or Walmart, and become a part of the background radiation of other people's lives.
But in your system, if society is racist top to bottom, how are you getting "men with guns forcing people not to act racist" rather than "men with guns forcing people to act racist"?
I suppose humans are more fundamentally hierarchical than they are tribalist/racist.
As long as the person or people on the top stand to benefit from greater numbers of workers, and they don't personally suffer negative effects from things like immigration and ethnic diversity it is in their interest to encourage it. They command the people below them, who are also made better off in a number of ways from the increased number of workers, and on down through the system.
In this way, you only need a system where diverse races are in the rational self-interest of a smaller group of people at the top, and then they can use men with guns to force a culture that is conducive to their rational self-interest, which works because the hierarchy-minded people below them don't rebel enough to make that entirely untenable. There are going to be limits pushing against these things in various directions, and there's probably a Goldilock's zone where all of these varying aspects of human nature (rational self interest, hierarchy and tribalism) are balanced against each other and you have a relatively functional society. Outside of that Goldilock's zone, either people's tribalism overwhelms their hierarchical social instincts, or it starts to be in the rational self interest of the ruler to care only about the people tribally similar to themselves.
Okay, but the question you originally asked was:
So isn't the direct analogy here the people on the top being more racist, and therefore commanding the people below them to be more racist? If the dynamics of diversity and rational self-interest naturally result in people on the top imposing non-racism on the bottom, how does the nightwatchman state end up with government enforcers being racist/sectarian/whatever?
I think flatter hierarchies might be less likely to benefit from diversity/greater "foreign" populations.
The state as conceived by a libertarian is likely to be "small" and less populated, due to less government capacity for intervention. The liberaltarian state is big, but tries to find a balance with a bigger hierarchy and larger population.
And you don't think the chain of assumption that results in a liberaltarian state being naturally diverse, and a libertarian state being locked into racism, is a tad convenient for you? If a libertarian says "I don't think bigger states are naturally more prone to diversity than small ones", how is his explanation worse than yours?
So, to be clear, I don't think that a liberaltarian state will be "naturally" diverse, and I don't necessarily think libertarian states are locked into racism.
I think the two most important facts about human nature for this discussion are:
I think this is a mystery that needs to be explained. My preferred explanation is that we've created social technologies over the years that get us to larger societies. Think about how the Roman legions were structured, or a modern military. The chain of command limits the number of people you directly interact with most of the time, and allows for better organization and coordination.
I don't think humans are naturally "racist", but I do think we are naturally tribal. Racism is one form of social technology that gets us to a Super-Dunbar Society (at the cost of creating a racial underclass), but there are many other social technologies along these lines: Religion, Nationalism, Communism, Neoliberal Capitalism, Imperialism, etc.
My problem is a lack of imagination on some level. From a traditional libertarian perspective, I don't get how you get from a society that is using racialized thinking as one of its Super-Dunbar social technologies, to using a different basis that is more compatible with libertarianism.
I suppose it would be possible to switch to religion in principle, but I think that most universalist faiths push against libertarianism on a number of points, and any sufficiently secularized form of religion which doesn't probably isn't strong enough to actually unite a society into a libertarian arrangement. Most of the others just fail right out of the gate. The most potent forms of nationalism are off limits to the libertarian, communism contradicts it, imperialism violates the NAP, etc.
I think strict libertarianism by default kind of stalls out around the Dunbar level in most cases. Maybe with the right social technology it gets to city-state size, and can still be worthy of the name "libertarianism." But I think that at that size, in a world of non-libertarian countries the libertarian city state is in an incredibly precarious position. If they try to stay an open society, and let people think for themselves, then people are going to be exposed to the imperialist, religious and nationalist thinking of their neighbors, and I think there will always be a temptation to swap out the libertarian-compatible social technologies for something more potent.
My issue is not that I think that libertarianism is naturally racist. I think that if a libertarian city-state was using racism as one of its Super-Dunbar social technologies (perhaps as a way to avoid corruption by outside ideologies), it would be hard to switch it to something else using libertarian means.
By contrast, I think that liberaltarianism is more willing to make compromises with social technologies that actually enable Super-Dunbar numbers that allow for something bigger than a city state, while still retaining most of the benefits of libertarianism. The main one is imperialism - which allows liberaltarianism to reproduce itself generation after generation by forcibly brainwashing the populace to be as libertarian as possible, and thus somewhat avoiding the siren's song of other Super-Dunbar social technologies like Racism.
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