Somalia shows us how anarchism (well, almost) doesn't work. The thing is, most libertarians are not anarchists or even minarchists. The most prominent current example, Ron Paul, would cut government drastically, yes, but he's never advocated eliminating the treasury or even the FDA.
There seems to be this popular perception that libertarians are "extreme". Well, they're a bit unusual, but basically their philosophy is just liberal socially and conservative fiscally. They aren't anarchists by any means.