No. Well yes, but it's confusing to say so, the point is in the location of the government in the "pyramid" if you will, it's the "top dog". If government is not such as to allow competition and is willing to enforce such position, and it's reach is far and wide, the rest of the environment is doomed. In such an environment, there will be no competition for government-like institutions, and they will suck forever and ever.
That is to say, there is no hope in those institutions getting better if you don't have the environment fixed first.
There is nothing fundamentally wrong with those institutions existing, since in a competitive environment they do not have the force to compel you. They may fool you with fashion and fads and reality distortions, but fundamentally they can not compel you with force. And that force to compel is something the government has and does use, in fact it asserts a monopoly on using such force.
If some government-like institution has such a force, you can dig down and see that the force is actually granted to it by the government. (this follows from the government's assertion of monopoly on such force)
Since most current governments allow some kind of limited competition, things do usually get a little better very very very slowly, speed depending mostly on the amount of competition allowed. Obviously culture has an effect on how bad it will get if the government's power is great etc. etc.
> "Now that works for most modern libertarians, but I think it would not work for Ayn Rand"
To me Ayn Rand is more like romance novels for libertarian leaning people. Her points are seductive but ultimately lack rigorous substance "in the real world", fun to read though (or watch the movies, or listen to, since there are some songs that have some quotes in the lyrics). So I don't really care if some argument would work on Ayn Rand or not. It is my understanding, from n = a small number, that similar positions are not rare. Very cautious attitude is also exercised towards other cult-ish stuff like stefbot.
> "More interesting are the libertarians who take a doctrinaire opposition to the government, but it really requires, as I said earlier, an anarcho-socialist vibe of ... those are already Initiation of Force in some fundamental sense"
To me, that has an anarcho-capitalist vibe, granted this is probably because of difference in social scenery. I do know that the anarcho-socialists have similar arguments, I'm mostly familiar only with Chomsky's. Btw. anarcho-capitalists are infuriating and interesting to talk to.
Wow that's a lot of text for a point that is so clear in my head. I hope it gives you a plausible explanation why some reject the government but not the government-like institutions.