One non-coercive tool for promoting virtue is the "bully pulpit". Like any tool of government, it can be (and often is) abused, but it is appropriate for there to be some public statements about the character we the people aspire to have.
Anyhow, that is one reason why I am not a libertarian. Yet at the same time, I would want someone with libertarian habits to always be on hand to ask (to paraphrase the WW2 slogan), "Is this law really necessary?" Even the most well-intended law may be (or become) too burdensome, intrusive, or punitive.