Here's the thing: Any of us who value liberty and freedom from government intrusion can understand the instinctive distrust of any law that allows government to dictate to private businesses whom they must serve. BUT there are instances where such laws are necessary, even in a free society.
Most of the time, they are not. In most cases, the market will do better than the heavy hand of government in ensuring that irrational prejudice doesn't carry the day.
Take the famous example (paraphrased here to the best of my memory) from Milton Friedman's Capitalism and Freedom. If the free market sets the price at which one buys potatoes, any smart businessperson will buy them from whoever offers the best quality at the lowest price -- regardless of race, religion, gender, etc. In contrast, if the government sets the price at 25 cents per barrel, there's no reason for people not to indulge their most irrational prejudices in deciding from whom to buy. The optimal model for eliminating discrimination is through the free choices of free people, using free markets.
But the problem is that sometimes that model breaks down. Sometimes, other, non-market motives override rational economic activity. That's why there are so many nepotism laws -- because (to continue with the Friedman example) -- someone might decide they'd rather help out a family member than to buy the best, cheapest potatoes.
That's why -- as abhorrent as government intrusion into the fundamental decisions of private business generally is -- the Civil Rights Act was necessary. In fact, given the level of irrational prejudice against blacks that existed in some circles at the time, some businesses could even have rationally decided that it made economic sense to make the morally repugnant decision to continue to discriminate based on skin color.
And that's a situation we simply couldn't tolerate in this country -- if, that is, we are serious about the guarantees enshrined in the Constitution and the Declaration of Independence (and I believe we are).
Thankfully, our society has evolved to the point where, now, any business that attempted to discriminate based on race would be treated with the contempt it would merit. But that wasn't always the case.
And that's not to say that it's always right for the government to interfere in private organizations to enforce a particular view of "equality." It isn't.
Race was an especially compelling case -- given the history of oppression and enslavement and the fact that blacks were a "discrete and insular" minority in this country. As the Supreme Court has recognized, gender must and should be analyzed differently from race (there are real biological differences between the sexes -- but not between the races), and other categories follow from there.
Rand Paul must make it clear that -- as abhorrent as government intrusion is -- in rare circumstances, it is the only alternative. As it was in the Civil Rights Act era.