I think I heard that via Mike Gunderloy (Factsheet Five), something along the lines of “a Republican who smokes pot.”
Here’s what else he said about it as of 1991:
Libertarian: It has been said that a libertarian is just a Republican who does drugs. Most libertarians are in favor of free enterprise and a minimal (but nonzero) amount of government. There are some libertarians who are anarchists, and just to confuse things, anarchists used to call themselves libertarians. To confuse things further, there are the civil libertarians, who worry more about rights than about profits. Anyhow, the libertarian movement in America seems to have peaked, so you might not have to worry about this kettle of fish for much longer.
“libertarians: anarchists who want police protection from their slaves”
Technically most libertarian-capitalists aren’t anarchists as that would mean acknowledging that the working classes (slaves in this case) are equal to the owning classes, and that would result in an imagined loss of profits. Libertarian-socialist anarchists on the other hand will object to the existence of both the police and slaves.
I think I agree with what Kim Stanley Robinson is trying to say though.