Finally, the Rand Paul furor, we have an issue in politics worthy of sustained, serious attention – How should people who act badly be dealt with? More particularly how should people who discriminate based on irrelevancies such as race, sex, national origin, physical impediments, etc., be treated? Should they be punished and forced to do the right thing? Should they be ignored and left to rot with their evil souls. Should they be ostracized and boycotted?
Since free men and women may not be forced to stop doing the wrong thing unless it involves violating other people's rights, there are limits to what may be done to them. Sadly this point is often overlooked by even the most earnest reformers who want to make others good. It cannot be done and may not be tried with violence, coercively. Human goodness must come from the heart, as it were, voluntarily. Otherwise it isn't really goodness. At most it could amount to being well enough behaved, like a child whom parents threaten to punish for misconduct.
But there are also many, many options available to respond to misconduct that has an impact on others without quite violating their rights. Strictly speaking no one's rights are violated when one discriminates against them without a valid reason, say for being black or a woman or coming from Somalia. No one is owed patronage from anyone – I don't have to buy something from you even if you are selling it at a good price and it is a fine product or service. Such an interaction, too, must be voluntary on both sides. And even if I invoke stupid reasons for avoiding dealing with you, you aren't due anything from me except, perhaps, an apology for my oversight.
In a free market place, however, when you enter it and do not state any preconditions others must meet to deal with you – to eat at your restaurant, shop at your store, rent a room at your motel, go watch a game at your stadium – you are extending an offer to anyone who can pay and behaves in a civilized fashion. But if certain prerequisites are in play, you can restrict those with who you will do business, provided these are fully disclosed and people considering doing business with you can find out before they enter your premises. That is the reasonable understanding of one's going into business, opening a store or shop or eatery. No irrelevant criteria can stand in the way of commencing business, not unless these are stated up front.
This would mean that if one wants to exclude blacks or whites or women or some other identifiable group of customers or traders from engaging in trade with one, that condition would have to be knowable to any prospective customer. Many institutions operate this way already – no women are allowed into the Roman Catholic priesthood; a bridge or ping-pong or bowling club or tennis tournament requires certain qualifications from those who would join it. And while these may be valid, sometimes they aren't – is it really valid for Roman Catholics to have their policy of celibacy for the clergy or mightn't it really be an insidious thing after all, once closely considered? But in a free society what matters is that they choose to have that practice and it doesn't violate anyone's rights – no one has a right to become a member of the RC clergy unless admitted by the RC administration.
If, however, you go on record with offering your goods and services for trade without specifying any conditions, you would be violating an implicit promise – understood by the reasonable person standard – to people whom you would bar from this. And that could be legally actionable.
Moreover, if you did make an announcement, such as "No blacks or women or 7 feet tall people served here," you would alienate a great many potential customers and so it is not likely that anyone with a modicum of rationality will try to do business that way. Still, one could. And that is what freedom means, among other things, that you can be an ass so long as you do it peacefully.