How would the NC restroom law be handled in a libertarian society?

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Question:

Considering the recent flap regarding the restroom law passed in North Carolina (and being considered elsewhere), how would this be handled in a libertarian society?

Answer:

In a libertarian society, most—if not all—bathrooms would be privately owned, since government would be very limited. Owners could decide who could use them and who could not.

If some business owners decided to discriminate on the basis of color, gender, or religion, their competitors would likely advertise their willingness to serve everyone, gaining the loyalty of the groups discriminated against. Profits would go up for those who were willing to serve all, while they’d go down for those who discriminated. Business owners would have to choose between their pocketbooks and their prejudices. Historically, most choose their pocketbook.

Indeed, segregation became law in the post-Civil War south precisely because businesses were serving the ex-slaves to an extent that caused resentment. Business owners who wanted to discriminate didn’t like losing their profits to their more open-minded competition. They, along with whites who wanted separate facilities, lobbied government to force businesses to segregate their facilities.

A government strong enough to ban discrimination is powerful enough to implement it as well. Those who wish to discriminate and those who don’t will lobby against each other for control. When private service providers decide who can and can’t use their facilities, people vote with their dollars to support the businesses that express their own viewpoint. No lobbying is necessary!