There is a simple answer. Personally I am a libertarian but I am not against minimal taxes. If we had a 1 percent sales tax, that went for funding government, and that it. I would be happy.

To answer your question though, you just do not have a standing army during peace time, and go with B. It doesn't matter if people create their own militia's. In fact that is a good thing. If you got half a dozen militia's in a state, they are all going to defend the area if it gets invaded.

Or everyone just buys there own gun. They say something like half the people in the US own one or more gun already. I am pretty sure, this is how laughing man expects a pure anarchist government to work. If everyone owns their own gun, then you do not need police or an army, as everyone can defend them self. If you get invaded everyone has a gun and can just join the voluntary militias and fight it out. Some guy starts causing trouble, you round up a posse and go catch him. Same thing works in a libertarian or anarchist government. The only real difference in that case, is what you do after wards, because there are no jails or anything in a pure anarchist government.

The basic difference between anarchy and libertarian is that a libertarian believes that a little organization will help everything run more smoothly. Taxation isn't theft however. Libertarianism believes in personal responsibility, and a fair and reasonable tax that is voted and agreed upon can exist.