Regarding the ambulance discussion,
The problem is, he views harm done to the passenger as a result of him not wearing the seat belt as a cost to society, and I view it as a cost to that passenger.
Criticisms:
1. Morals matter. Even if racial discrimination is economically effective for whites, its still wrong. Friedman implies a restaurant should be free to exclude blacks as part of the owner's property rights. Fine - perhaps that is economically good for him. I still think that is wrong morally and that the law is right to prohibit it.
2. Law influences behaviour. Everyone knows that seat belts save lives. In a free society, 37% of people wear seat belts. That 37% are the people who save up for old age, maintain their buildings and generally are the backbone of society. When the law makes seat belt compulsory, 94% of people wear them. That extra 57% of the population are the people who will do the right thing if told to but otherwise are just passengers on the ship of state. 6% of the population won't wear seat belts come what may. Any plan for society has to include that 6% of stubborn misfits.
3. Religion matters. Where I live, a free market in law would have female circumcision legal and beer illegal. Just because the market comes up with this, that doesn't make it right.
4. Foreign powers matter. There is an essay on how the anarchic system in Iceland was destroyed by a foreign power picking sides in disputes and ending up controlling the country. Recently we have seen a decent society in Somalia destroyed the same way by Ethiopian sponsorship of clan wars. We may soon see the same in Libya. Anarchy is unlikely to work but even if it does, you can't go first or you will have foreign powers create civil wars.
1. Agreed, racial discrimination is wrong. That is why I would not patronize an establishment that practiced it. I would tell my friends about it, and suggest they might want to avoid it as well. By practicing racial discrimination, the shop owner has excluded an entire segment of the population, as well as another, potentially larger, segment of your potential customers (even with the policy) that disagrees with the policy. So, it might work, but an inclusive policy would get people more business.
2. These stats are all very nice, but the fact remains that someone who does not wear their seat belt endangers only themselves.
3. No, not where you live, for the people whom you live near by. I suspect you will cry, "semantics!" but it's an important distinction. Also, keep in mind that they would need to negotiate deals with the other REAs in the area, meaning that making something objectionable like female circumcision "legal" would be more difficult than placing voluntary restrictions on behavior, such as banning alcohol.
4. This is actually your best point. Realistically, I can't think of a way to prevent this, aside from arbiters that allow a foreign power to influence their decision losing the reputation of impartiality that they depend on for continued business.