Hoppe's description of Hinduism in 'Economy, Society and History' is not fully accurate. Very much in contrast to the insane depth that his guru Rothbard goes into while taking about subjects like this. But that's okay.
He is criticized for attributing cultural conditions to the development of libertarian ideas. And that's not okay.
Tradition, religion and culture needs to be challenged by Reason, all day everyday. (And so does History).
I would modify or add to Hoppe's points the following:
I'm from Tamilnadu and my points are going to be centred around Tamil society.
Tamilnadu has been undergoing a century-long challenge and reform to its caste system, kickstarted by the spread of Rationalist ideas.
The caste system is an atrocious monstrosity. The sooner it is gotten rid of, the better.
(Side bar: Some cultural customs, like the belief in determinism, which involves the practice of using horoscopes to make decisions, still persist among people. That hinders entrepreneurial progress also. But as long as it doesn't become a part of government policy, it's fine. To be honest, it's hilariously not that different from drawing lines on charts to make investment decisions. Or using statistical aggregates to plan the economy, which is indeed a part of economic policy all over the world, sadly.)
State policies like affirmative action, wealth redistribution, etc. has unsurprisingly failed at addressing the caste system. It's only made things worse by amplifying caste-based tensions. The reformers were largely liberals who became liberals after it got corrupted by socialist and egalitarian ideas.
State policy that inculcated libertarian principles, e.g. 1991 liberalisation, opening up of imports and exports, making private property universal, removing the barriers to the private production of goods and services, partial privatization of health and education, defense of self-ownership and natural rights and introduction of contract laws, have helped.
Bottom-up organic reforms like voluntary abandonment of caste-based surnames, the spread of rationalist ideas through media and literature, widespread cultural shifts that made 'going back to the old ways' a non-starter in serious political discussions have played a major role in Tamil society shedding the ideas that held its people back from economic advancement.
Tamil people having one of the highest household gold holdings, not only in comparison with other Indian regions, but also regions all over the world, would have helped a lot with being resilient to Socialist planning that occured from 1947 - 1991 and the crony capitalist regulatory capture that has occured since 1991 - present day.
Tamil society has also had religious doctrines that are distinct from the rest of India, which are conducive to rationalist and libertarian ideas.
Tamil Shaivism does not explicitly advocate for a caste system. It is a doctrine, when interpreted properly, that helps people look inward.
I've personally never found it difficult to whole-heartedly embrace libertarian ideas while also keeping my religious predispositions intact. That's got to amount to a good deal in this argument.
The Siddhar tradition and its epistemology, part of the Tamil Shaivite school, is not at all well-known among 'mainstream' Hindu thought. It is low-key, but incredibly influential in Tamil society. That's the right combination and I hope it stays that way. Even if people attempt at making it popular, only those who have good gurus would be able to grok it. And those who do grok it won't go about waging wars, expropriating property and pursuing conquest and subjugation. They simply take care of themselves, their lives and their families and if possible, bring about a positive impact to their society.
This tradition constitutes social power.
Social power is not the same as state power.
Which brings me to the point about intellectuals and opinion moulders, whom Libertarians have rightly pointed out as the legitimizers of the state and engineers of consent.
And boy have they legitimized and engineered many kings and states for centuries. They are at fault for the feudal caste system, customary laws, decline in economic freedoms, parasitic wealth extraction and many other socially destructive phenomena commonly attributed to the state.
The point:
There's nothing inherently corrupt in Hinduism and its epistemology, if understood with the right guidance.
It's the intellectuals and opinion moulders who have corrupted it.
Rothbard would've understood this.
If someone tells me that a religion has not been corrupted this way, they are not seeking truth, but rather propaganda.
Monarchs and their intellectual allies corrupted Hinduism and Indian culture. And so have democratic caretakers and their bureaucrats.
Monarchy was a god that failed long ago in India.
And so is democracy.
Neither is preferable.
No state is the best state.