Rand Paul points out that customer regulation of markets doesn't tolerate racism. Racism in a market is a commons. Anybody can be a racist, up to a point, but if too many people are racists, the market for racism gets destroyed. In order for all the racists to succeed in business, you need to manage this commons. Typically, this is done by government, and specifically, in the case of black racism, by Jim Crow laws.
Just another example of government regulation of markets making everyone worse off. It's a dangerous tool that we're better-off without. Yes, it can sometimes succeed, but most often it fails, and because the future is unknown to us, we can't pick the successes and avoid the failures.
Better to have separation of state and markets. Let customers regulate markets, not politicians.