Libertarianism (i.e. absolute belief in the capitalist market and private property) doesn't work, because the markets don't reflect negative externalities like pollution, over-harvesting, misinformation, or antibiotics misuse. States need to exist to manipulate markets to reflect those things.
There are many industries where the profit motive is contrary to the public interest, like education, health, media, banking, prisons, military, drugs, junk food, gambling, etc. Either [a] the state should be the sole player in the industry (prisons, military), [b] the state should provide a public service in that industry to set a baseline for private competitors (education, health, media), [c] the state should impose regulations/taxation that prevent/discourage activity contrary to the public interest (banking, junk food, drugs), or [d] the state should outlaw the industry entirely (gambling (IMHO)).
There are many "markets" that are inherently monopolistic, or where private competition is nonsensical, like public spaces (parks, lakes, rivers) and public infrastructure (roads, telecoms, trains, airports).
Companies and markets are only good at medium-term thinking (at best). Google employees avoid thinking about the kind of society they're creating for their grandchildren, but that's the job description of elected representatives (in accountable governments).
Finally, but most significantly, there's that whole thing about capital accumulating to the top. Income and capital gains taxation is in the public interest, because equality and a well-financed state is in the public interest.
I feel like many Americans tend towards libertarianism because they feel that their governments are unaccountable, unrepresentative and corrupt. I think the problem in the US is the size and power of its government - not the concept of government itself. I think the federation of the US should be abolished (as in, all federal law). States could sign up to federal institutions/programs (central bank, defense, immigration, ...) when and how they please.
Personally, I think any moderately-populated area should have a single level of government spanning no further than 2-4 km from its parliament (i.e. within walking distance). Each of these states can assume common administration of adjacent sparsely-populated areas. If the states agree to a common legislative process, there's no duplication of effort in passing common legislation, except for each parliament voting on it or amending it as they want, which is democratic!
Libertarianism really grates me, but I enjoy debating it because I see that libertarians want the same things I do: liberty and equality for everyone.