It was a political and substantive error for Rand Paul to criticize those portions of the Civil Rights Act (largely Titles II and VII) that applied to private business. It is wrong as a matter of constitutional principle. A unanimous Supreme Court upheld Congress' ability to prohibit discrimination in public accommodations in Heart of Atlanta Hotel v. United States. Even if you believe that its scope goes beyond what should be subject to the commerce power (perhaps even even as applied to Ollie's Barbecue, a segregated restaurant that was among the plaintiffs in Katzenbach v. McClung, argued along with Heart of Atlanta and decided the same way), it does not seem unreasonable to think that Congressional authority under section five of the Fourteenth Amendment either supports federal intervention (perhaps to counter the impact of Jim Crow laws) or suggests a rationale for a broader reading of Congressional authority in matters of racial discrimination. In any event, the matter is water under the bridge.
Nor it seems to me do typical libertarian arguments against the need for legal proscription of discrimination work in the context of the 1964 Act. The argument, drawing on the work of economists like Gary Becker, usually says that the market is the best antidote to discriminatory practices. Irrational discrimination - not hiring the best workers or accepting profitable business on the basis of race - comes at a cost. The discriminating party acts as if the cost of hiring, say, an African-American is higher than it is or that the price paid by an African American customer is lower than it is. Thus, discrimination is economically detrimental and, in a market without entry barriers, nondiscriminating competitors will have an advantage.
But putting aside normal market perfections, the theory won't work if there is a pervasive economic demand for discrimination, e.g., if white employees won't work with blacks or if white customers won't sit at a lunch counter with black customers. Then the cost of hiring or serving African Americans really is higher and the market won't help us.
Of course, those are conditions under which laws prohibiting discrimination are unlikely to be passed. We weren't likely to see anti-discrimination legislation get through the Alabama legislature in 1960. But, in 1964, the areas in which there was a pervasive demand for discrimination were part of a larger community in which discrimination was, although certainly not eliminated, more broadly disfavored such that a coalition to pass a law prohibiting it could be formed. Under those conditions, it seems, a law prohibiting discrimination would change market conditions in the south and reinforce the principle of nondiscrimination throughout the nation. (The law has expressive as well as regulatory impact.)
So, even if Rand Paul is correct to say, that, were Titles II and VII to disappear overnight, we wouldn't see much more discrimination in today's world, that wasn't the case in 1964.
Having said that, I do think there is some value in the observation that the more effective barriers to a discriminatory practice are public attitudes and the market (which, of course, reflects public attitudes). While I am certainly not an expert, I have been a lawyer for quite a while and it has also struck me that age discrimination laws seem much less effective than laws prohibiting other forms of discrimination. Many - perhaps even most of us - don't really believe that age discrimination is wrong in the same way that racial discrimination is. In the eyes of many, age seems to be a more relevant factor than race and assumptions based on age are more likely to be true. The same moral stigma does not apply. I'm not sure that the mere fact of legal prohibition has done much to change those underlying attitudes.
Cross posted at Marquette University Law School Faculty Blog and Point of Law