For the life of me I can't find the blag post where I read this, but I'm pretty sure it was a post that Bob Murphy at Crash Landing linked to. Anyway, it was some Statist economics blag, and a commenter gave what he thought was a perfect example of why complete and unmitigated freedom (i.e., what those crazy libertarians advocate) is harmful and impractical and needs to be checked by prudent government restrictions, lest other people suffer rights violations or damages to their well-being. He wrote something like this: Freedom of speech is a basic right that everyone has, but sometimes it can be used for harm, like shouting "Fire!" in a movie theater. So, clearly, complete freedom of speech can be used to violate the rights and safety of others, so that's why we have prudent limits placed on our freedoms by the wise government—so that "too much" freedom doesn't end up violating the rights and freedoms of others.
If my vague and idiocy-stunned memory serves me correctly, I am doing that Statist a huge favor by paraphrasing him with even that level of eloquence, clarity, and grammatical correctness.
But the point is that, once again, an actual understanding of the libertarian view of private property rights answers this dilemma perfectly. The answer is: The owner of the property can decide what behavior is allowed on the property, and if they forbid shouting "Fire!", then you can't do it! It's that easy, people.
It is also easy to pick out the particular brand of Statist who has never read a single essay or column about libertarian moral or property-rights theory, but who excretes lame attacks on his concocted libertarian straw-man on web pages read by other Statists who are too lazy, ignorant, or dishonest to call him out on it.
Shouting "Fire!" in a theater should be and would be forbidden by the owners/managers of the property, who obviously make rules that benefit them and their paying customers; the State has no business sticking its nose into the private affairs of individuals and businesses. It has no business sticking its nose into whether people shout "Fire!" because private property rights take care of the issue just fine. You can shout "Fire!" all you want in your own home, and you can shout it all you want in the homes or other properties of people who allow it. You can't shout it where the owner doesn't allow it. Their property, their rules. The property rights you have in your own body and the liberty you have to make decisions about what to do with your body extend only to the equal right of others to do what they wish with their property. Just as you can throw stones all you want until they go onto someone else's property, you can shout "Fire!" all you want until your voice reaches the property of someone who doesn't allow the shouting of "Fire!" on his property.
How much freaking clearer could it be? Your property rights extend only to the property of others. You have no more right to do anything to/on their property than they have to do to/on your property. You can't shout "Fire!" in their theater; they can't prevent you from shouting it in your home. The issue is not the First Amendment or freedom of speech. It is private property rights. In this way we can see how the universally equal and mutual expression of private property rights solves issues of safety, decency, and common sense just fine and obviates the need for State interference into the matter.