“Self-determination of peoples” is a relatively new international law principle which has gone through numerous changes in its history, making it an elusive concept. The principle has received interest the last 30 years, prompted at first by the Soviet breakup, more recently by growing nationalist movements, and most recently by states’ totalitarian measures enforced in the name of combating COVID-19. Important issues concerning the future of self-determination’s status in and impact on the international system remain. This paper outlines and analyzes the history of self-determination using a three-phase framework. In Phase One, the principle was a non-legally binding political principle. In Phase Two, the principle became legally binding but was limited to the decolonization context. In Phase Three, the principle becomes a universally accepted human right that some judges and jurists argue has become a peremptory norm of international law (jus cogens), which no state can violate under any circumstances. This historical inquiry reveals that the principle has always been asserted and argued against by states with the goal of maintaining or gaining power for themselves. This paper then summarizes the principle’s modern incarnation as a human right under international law, whereby “peoples” – i.e., the entire population of a state’s territory – have the right to both “external” and “internal” self-determination. “External” self-determination is the right of a people to have a state with independent international status. “Internal” self-determination means that the people in the state must be free to pursue their economic, social, and cultural development, while having adequate ability to participate in government. Self-determination and secession are often paired together, but current international law does not directly allow or disallow secession. This paper then delineates theoretical issues the modern incarnation of the self-determination principle poses for statism and the international system, including: how to define “peoples” under the principle; what the relationship of the principle to states’ sovereign territorial integrity should be; how to redraw state boundaries after a successful secession; whether radical self-determination leads to violent conflict; and what is the relationship of unfettered secession to liberal-democratic theory that much of the international system is based upon. Then, this paper applies Austro-libertarian theory to these issues, arguing that: the principle relies on an unfounded collectivist conception of rights; the international system slavishly adheres to the incoherent concept of states’ sovereign territorial integrity; the principle, when its inconsistencies are removed, must theoretically justify unfettered secession; and the conflation of democracy with both liberalism and government by consent keeps properly understood self-determination from being achievable in fact. This paper concludes that the modern self-determination principle’s theoretical deficiencies and inconsistencies present a catch-22 dilemma for the international system. Either self-determination must be extended to take supremacy over state territorial integrity, or it must be rejected explicitly and entirely. Either choice, or trying to split the difference between them, incentivizes delegitimization of statism and the international system.