I know that the title is likely to be controversial, but it shouldn’t be. Minarchy and anarchy are, in effect, exactly the same.
Suppose that, through a series of Constitutional amendments, the size of the federal government was reduced to below pre-Civil War levels. For example:
Amendment 28
Article I
The Seventeenth Amendment is hereby repealed; and Senators of the United States shall from henceforth be appointed by the legislatures of the States which they represent.
Amendment 29
The Sixteenth Amendment is hereby repealed. The United States’ legislative, executive, or judicial bodies may not levy any tax upon individuals or commercial enterprises. No taxes shall be paid, except out of the treasuries of the States; and taxes paid by a State shall be proportional to that State’s representation in both houses on Congress.
Amendment 30
The right of any State to secede from the United States of America, by popular referendum in that State, is hereby affirmed as legally binding.
Amendment 31
The United States legislative, executive, or judicial bodies may not regulate interstate commerce; nor may the United States restrict trade with any foreign nation, except with a formal declaration of war against that nation.
If you analyze these possible Constitutional Amendments, you will see that is makes it impossible to apply taxes or regulations nationally; instead, provisions are made for taxes and regulations to be applied at the state and local level. In the mean time, communication, travel, and commerce is taking place on a global level.
When the federal government is severely weakened, it becomes extremely easy for individuals and businesses to escape taxes and regulations just be crossing state lines. States would have to compete to attract taxpayers. They would have to keep the air clean, keep the streets safe, and keep taxes low. They would have to provide more services for less money than the neighboring states; they would behave exactly like market entities.
Of course, we could try to “abolish all government” and then create a Libertopian paradise; but it seems more feasible to instead shatter the government into smaller governments that would have to compete for tax revenues in a free market.