The wealthy can not be productive without the poor, for they are typically the admins, managers, capital owners, and so forth.

The poor are the ones which provide the base labor, puts the capital to work, and give managers the demand for their jobs.

Profit is only possible by not granting to the worker the full productivity of his own labor.

A small group of people own the productive forces of society. These people are the capitalists. Everybody else has to work for them in one way or another, and these people are the workers. All the work done by those workers creates the total social product, but the social product is owned by capitalists. Profit comes at the expense of workers, hence workers create more value than they are compensated for.

Here’s another way of seeing it: All large-scale societies produce a surplus product. All societies are divided between the people who create the social product and the people who own the social product. In feudalism, for instance, the feudal landlord owned the surplus product made by peasants. They called it a tax. In capitalism, capitalists own the surplus product in the form of commodities made by workers. They call it profit.

But in feudalism there weren’t just two classes- landlord and peasants. There were knights that ran around in armor protecting the feudal lands from other landlords. There was the catholic church which told people to obey the feudal order. And so on.

So too, in capitalism, there are other people besides capitalists and workers. Instead of knights running around on horses we have cops, and lawyers and judges whose job it is to protect the institution of private property. They don’t make any of the commodities that constitute the social product- but their work is essential in making sure that other people can.

There are other people who don’t seem to work for a capitalist at all, like government employees, church employees, non-profit employees, and there are other groups of folks that do work for a capitalist but don’t seem to produce anything, like cashiers, janitors. Then there are whole industries that don’t produce anything at all, like banks, insurance, stocks. These industries gross some of the biggest profits in the world, yet they don’t make any commodities at all!

So we are faced with the question: how do we classify all this work? Does it create value? Are those workers being exploited? Let’s condense these questions into 1 fundamental question: Who creates surplus value?

To answer this question we will return to a distinction made in my video on commodities. Commodities embody three different types of value: labor value, exchange value and use value. Commodities have a labor value as a result of being made by a worker. They have an exchange value because they are sold in the market place. And they have a use value b/c they have a use for consumers. Commodities then are made by workers, sold by capitalist and used by consumers. Surplus value is the price of the commodity minus the amount paid to workers.

So cops, their work has a labor value because cops do work. Do they produce a use-value? That’s debatable. But their work can’t be sold on the market. Therefore their work has no exchange value. Thus we can say, cops don’t create surplus value.

What about other people employed by the government? Unlike cops, teachers and healthcare workers produce use values with their labor. But these values aren’t sold by a capitalist for profit so these workers don’t produce surplus value.

Instead of selling the use values produced by teachers and health care workers the government gives them away. And where does the money come from to pay for the labor of these workers? From taxes- taxes on profits and income. In other words, value created elsewhere in the economy.

What about service workers? Are services a commodity? Well a commodity doesn’t have to be embodied in a physical object to be a commodity. As long as it has a labor, use and exchange value it is a commodity. Tour guides produce commodities, prostitutes produce commodities. More examples?

What about financial services? banks? etc. These branches of industry don’t even create use values. Instead they merely transfer money from one place to another. That’s how they make a profit.

Banks for instance. Banks loan money to capitalists. Capitalists exploit their workers. They use some of this surplus product to pay back their loans/interest to banks. So banks are just siphoning off the value created elsewhere in the economy. Similarly, banks loan to workers. Workers create value at work and get paid for a portion of that value. They then have to hand over a portion of that value to landlords, banks and mortgage companies- all institutions that merely siphon off value created elsewhere.

So we can say that nobody who works in the financial service sector creates commodities. Nobody creates surplus value. Surplus value is merely being taken from elsewhere. The fact that these companies bring in such huge profits is a testament to how powerful and crucial the institutions of finance are in a capitalist economy. (topic for another time)

Many people that work for a capitalist enterprise don’t create exchange values. The guy who scrubs the toilets at GM, the product of his labor isn’t sold by GM. GM doesn’t make a profit by selling clean bathrooms. That doesn’t mean his work isn’t important. But it isn’t a source of surplus value. The toilet scrubber at GM is paid with a portion of the profits made by exploiting other workers at GM.

We could go on and on listing occupations. Try it yourself using these criteria. As you run into different types of workers throughout your day, ask yourself: do these people create use value and exchange value with their labor? Is this use value sold by a capitalist for profit? Academics usually call this distinction: productive and unproductive labor. If you produce surplus value for a capitalist you are engaging in “productive labor”. If not, it is “unproductive labor”.

But now that we’ve gotten better at explaining who creates surplus value we have a bigger question: Do you have to produce surplus value to be exploited?

Unproductive labor still seems, at an intuitive level, exploitative, that is, there is still an incentive for employers to get the most work out of janitors, bank clerks and teachers for the least money. We know, for instance, that the government is constantly seeking to cut funding for education at the same time that teachers are teaching larger class sizes with less resources. So if we see the same labor, saving processes at work, regardless of whether surplus value is being extracted, we are left wondering why it is important to talk about surplus value at all.

This problem, however, naturally points toward a solution: all of our social labor is bound up in the production of surplus labor. If we aren’t producing surplus value directly for a capitalist we are aiding that process: moving credit, education workers, cleaning up, protecting private property, etc. Regardless of whether or not we directly produce surplus value, the wages of all workers are a direct cut out of the profit returning to capital. Because workers are a variable input (the price of their labor does not determine their output), there is always the possibility of getting more value out of them for the same or less money. Just because a worker doesn’t produce surplus value for a capitalist doesn’t mean they aren’t producing use values in an exploitative relationship. Capitalism as a whole seeks to make labor more productive through exploitation, regardless of whether this labor directly produces surplus value.

Let's delve into Ayn Rand's morality.

1. Rand's Argument

Rand's argument seems to be as follows. I enclose in parentheses required implicit premises that I have introduced. The right-most column gives page and paragraph citations for where Rand says these things. Major conclusions are marked by asterisks.

1. Value is agent-relative; things can only be valuable for particular entities.

2. Something is valuable to an entity, only if the entity faces alternatives.

3. No non-living things face any alternatives.

4. Therefore, values exist only for living things.

5. Anything an entity acts to gain or keep is a value for that entity.

6. Every living thing acts to maintain its life, for its own sake. premise

7. There is no other thing that they act to gain or keep for its own sake.

8. Therefore, its own life, and nothing else, is valuable for its own sake, for any living thing.

9. Therefore, life and nothing else is valuable for its own sake.

10. Everyone should always do whatever promotes what is valuable for himself.

11. Therefore, everyone should always do whatever promotes his own life.

12. A person can live only if he is rational.

13. Therefore, everyone should be 100% rational.

2. Problems with the argument

The argument contains eight fatal flaws.

Objection (i):

The first is that premise 1 begs the question.

One of the central groups of opponents Rand is facing is people who believe in absolute value, and not just agent-relative value. The absolutist view is that it is possible for some things to be good, simply, or in an absolute sense; whereas agent-relativists think that things can only be good for or relative to certain individuals, and that what is good relative to one individual need not be good relative to another. (N.B., this should not be confused with what are commonly called "moral relativism" and "cultural relativism.")

Another way to put the issue is this: absolutists think that value exists as a property of something--most likely, as a property of certain states of affairs. For instance, if I say, "It is good that intelligent life exists on the Earth," I am saying that the state of intelligent life existing on the Earth has a certain property: goodness. Agent-relativists think, instead, that value exists only as a relationship between a thing and a person. For instance, an agent-relativist might say, "It is good for me that intelligent life exists on the Earth," and this would mean: the state of intelligent life existing on the Earth bears a certain relationship to me: it is good for me. But an agent relativist would not say it is good simply.

Rand bases her ethics on the agent-relative position, but she offers no argument for it, only a bald assertion.

Objection (ii):

Premise 2 seems to be false. If I knew that I was inevitably going to get a million dollars tomorrow--there's no way I can avoid it--would that mean that the money will have no value? Again, Rand offers no defense of this assertion.

Perhaps her thought was that "good" is the same as "ought to be sought" or "ought to be chosen", and that since it makes no sense to say one should seek or choose what one either cannot get or cannot avoid, it follows that it makes no sense to say something one cannot get or cannot avoid is "good". But this simply illustrates why that definition of "good" is wrong. Nor does Rand offer any defense of this assumption (which she doesn't even explicitly state)--she seems simply not to have noticed that she was assuming it.

Objection (iii):

Premise 3 seems to be false. Rand claimed that living things face an alternative of existing or not existing but that non-living things do not. I can think of five interpretations of this, but all of them make it false:

First, it is not true that non-living things can't be destroyed. I once saw a house destroyed by flames, for example.

Second, it is true that the matter of which non-living things are composed can't be destroyed; but this is equally true of living things.

Third, it is not true that a non-living thing's continued existence never depends on its activities. If my computer ceases to function properly, this may cause me to destroy it.

Fourth, it is not true that positive action is never required to preserve a non-living thing's existence. A cloud, for instance, must absorb more water in order to continue to exist.

Fifth, it is true that non-living things do not possess free will. But this is equally true of almost all living things, and yet Rand claims that they (including plants, single-celled organisms, etc.) face an "alternative".

Thus, it seems there is no sense in which Rand's claim is true.

Objection (iv):

Either premise 5 is false, or the argument contains an equivocation. The word "value" has at least two different meanings.

First. Sometimes "value" is used as a verb. In this sense, it means approximately, "to believe to be valuable," or sometimes "to desire". Thus, if I say John values equality, I am saying John thinks equality is good, or that John desires equality. Along the same lines, "value" is sometimes used as a noun, to refer to things which someone 'values' in this sense--i.e., things which someone regards as good. Thus, if I say equality is one of John's 'values', I mean equality is one of the things that John believes is good.

Second. Sometimes "value" is used to refer to things which are good. So if I say, "equality is an important value", I am saying that equality is one of the important goods. Notice the difference, then: the difference between believed to be good and is good. No objectivist can afford to neglect this distinction, since if one does, one will be forced into extreme ethical subjectivism.

If Rand meant "value" in the first sense, then her premise was close to true. (Not exactly, since it is possible to act to gain something even if you don't believe it to be good, but let's overlook that.) However, in this case, it has no ethical significance. In particular, the later steps 8 and 9 would not follow, since they claim that life is valuable--that is, good--whereas the premise from which they are derived is about what is valued--that is, held to be good.

If Rand meant "value" in the second sense, then her premise was false. It is perfectly possible, as Rand herself explains later on, for someone to value what is actually bad for them. Nor did she give any argument for thinking that whatever one acts to gain or keep must actually be good.

Objection (v):

Premise 6 is false.

If we read it in a teleological sense, as saying living things have inherent goals or purposes, then it is false because nature is not teleological--Aristotelian physics and biology have long since been refuted. In that sense, living things do not aim at anything (with the exception of conscious beings with intentions).

If we read (6), as Rand suggests (p. 16n), to mean merely that the actions of living things result in the maintenance of their lives, then two problems appear. First, (7) will now be false. There are many things that living things' actions result in. For one thing, their actions result in the reproduction of their genes. For another, animals' actions result in production of body heat.

Second, it would follow, absurdly, that any object whose actions have results, has values. Thus, since when a rock rolls downhill, this results in its having greater kinetic energy, we must conclude that the rock acts to gain and/or keep kinetic energy, and therefore that kinetic energy is a value for the rock.

Objection (vi):

I have included 7, because it is necessary in order to get to 8. But 7 is false, however one reads it. If one interprets it as a claim merely about actual results of action, it is false as discussed above.

If one reads it as an observation about what organisms are evolutionarily 'programmed' for (that is, what traits are naturally selected for), it is false because the only trait that is selected for is that of producing more copies of one's genes. Thus, if anything is the ultimate 'value' for living things, it would be gene-reproduction (technically, 'inclusive fitness').

If one reads it as a claim about genuine teleology in nature, it is false because teleological physics is false.

If one reads it as a claim about the purposes or aims of living things, it is false because, for those living things that have purposes, they can often have other purposes. Rand frequently says that many human beings are aiming at self-destruction, for example. It is hard to believe that they are doing this for the sake of promoting their lives.

Consequently, conclusions 8 and 9 are unsupported, and in fact they are false. Many people value happiness or pleasure for its own sake, and not simply for the sake of further prolonging their lives. Rand herself, inconsistently, later declared happiness to be an end in itself. According to her theory, she should have said it was good only because it helped maintain your life.

Objection (vii):

This is probably the most egregious error. Premise 10 begs the question. Rand claimed to have an argument, a proof even, for ethical egoism. Yet 10 is one of the required premises of that 'proof'--and 10 essentially just is ethical egoism!

Some will dispute that this is really one of her premises. The reason I say it is is that without 10, the subsequent steps 11 and 13 do not follow. All Rand established up to that point, even if we ignore all the above objections, was that there is one and only one thing that is good for you, and that is your life. But obviously it does not follow that you should only serve your life unless we assume that you should only serve what is good for you. So, if 10 is not included as a premise, then Rand simply has a non sequitur.

Obviously, someone who held a non-egoistic theory--an altruist, say--would respond to the news of 8 and 9 (assuming Rand had demonstrated them) by saying: "Ah, so therefore, we should promote all life" or, "I see, so that means I should serve everyone's life. Thank you, Miss Rand; I previously thought I should serve other people's pleasure or desires (or whatever), because I thought that was what was good for them. But now that you've convinced me that life is the sole intrinsic value, I see that it was their life that I should have been serving all along." What argument has Rand given against the altruist, then? None.

Objection (viii):

Either 12 is false, or the inference to 13 rests on equivocation.

Rand explains that reason is our basic tool of survival. If her thesis is that any person who is not 100% rational, all the time, will die, then she certainly needs to provide argument for that. There seem to be lots of counter-examples, many of them pointed out by Rand herself.

If her thesis is something weaker, such as that any person who is not by and large rational will probably die, then 12 is plausible. But 13 does not follow. All that would follow would be, e.g., that one should be by and large rational.

3. General arguments against ethical egoism

Rand endorsed a version of 'ethical egoism': the view that a person should always do whatever best serves his own interests. I have discussed the following objections to this doctrine in my "Why I Am Not an Objectivist", so I will be brief here. Here is one general argument against egoism:

1. If ethical egoism is true, then if you could obtain a (net) benefit equal to a dime by torturing and killing 500 people, you should do it.

2. It is not the case that, if you could obtain a (net) benefit equal to a dime by torturing and killing 500 people, you should do it.

3. Therefore, egoism is not true.

This argument is very simple, but that should not fool us into thinking it is therefore illegitimate. It is true that an egoist could simply deny 2, proclaiming that in that situation, the mass torture and killing would be morally virtuous. Any person can maintain any belief, provided he is willing to accept enough absurd consequences of it.

Here is a second argument against ethical egoism: it contradicts Rand's own claim that each individual is an end-in-himself and that it is therefore morally wrong to sacrifice one person to another. For either Rand meant that an individual life is an end-in-itself in an absolute sense--as discussed in my objection (i) above; or she meant that an individual life is an end-in-itself in a relative sense--i.e., for that individual.

Assume she meant it in a relative sense. In this case, Smith's life is an end-in-itself for Smith. But since Smith's life is not an end-in-itself for Jones, there has been given no reason why Jones should not use Smith or sacrifice Smith's life for Jones' benefit. In fact, for Jones, Smith's life can only have value as a means, if it has any value at all, since for Jones, only Jones' life is an end in itself.

Now, assume she meant it in an absolute sense. In that case, she contradicted her agent-relative conception of value. Furthermore, she generated a general problem for ethical egoism. If the life of my neighbor, Jones, is an end-in-itself in an absolute sense, and not just relative to Jones, then why wouldn't it follow that I ought to promote the life of my neighbor, for its own sake? But this is not what Rand wants--she claims that my own life is the only thing I should promote for its own sake.

4. Attacking straw men

Rand seriously misrepresents the history of ethics. Essentially, she leads the reader to believe that there have been only two alternative views in ethics: (a) that moral knowledge comes by mystical revelations from God, and (b) that moral principles are arbitrary conventions. Either way, ethics is regarded as "the province of the irrational." One other position is mentioned: that of Aristotle, who allegedly based ethics on what noble and wise people choose to do but ignored the questions of why they chose to do it or why he thought they were noble and wise. Next to these alternatives, Rand's theory looks almost reasonable by comparison.

However, the above is a gross caricature of the history of ethics, and Rand makes no effort to document her claims with any citations.

In short, Rand draws plausibility for her position by attacking straw men.

5. Man qua man and fudge words

Some time after getting to step 9 in her argument (as described in section 1 above), Rand introduces the idea of "the life of man qua man" (hereafter, MQM). She informs the reader that when she says a person should promote his own life, she means life MQM, which means the sort of life proper to a rational being. She tries to use this to explain why, despite the truth of egoism, you still shouldn't live off of the productive work of others by stealing--that's not the sort of life proper to a rational human being.

Let's distinguish, then, between life qua existence (hereafter, LQE) and MQM. LQE means simply one's continued literal survival--i.e., life in the sense of not being dead (what everyone else means by "life"). MQM is something more than that--the kind of life proper to a rational being.

The first problem is that Rand's shift in the argument from LQE to MQM is illegitimate. It is an equivocation: If "life" in the argument means LQE, then Rand cannot switch over to MQM as her standard of value and claim that she gave an argument for it; she only gave an argument for LQE. On the other hand, if we assume "life" means MQM throughout the argument, then the premises preceding step 11 that mention life or living are all false: 3 will be false, because many entities that do not possess life MQM face alternatives. 4 is false similarly. 6 is false, because most living things do not have MQM life. Moreover, it is clear that Rand meant LQE, since she starts off the argument by saying the only fundamental alternative is that of existence or non-existence.

The second problem is that Rand has given no criterion for what counts as 'proper to a rational being.' I consider three possibilities:

(a)

Suppose that we try to use something other than life as our criterion for what is rational. In that case, we would have to abandon her claims 8 and 9. Furthermore, she has in fact provided no such criterion.

(b)

Suppose we try to use LQE as our criterion. Then MQM collapses into LQE, and it cannot be used in the way Rand wants, to explain why some forms of physical survival are undesirable.

(c)

Suppose we try to use MQM as our criterion. Then we have a circular criterion, because Rand hasn't told us what "MQM" means, except that it means the sort of life proper to a rational being.

Rand makes a number of claims about what is or isn't rational, but they are simply arbitrary declarations in the absence of a criterion of the rational, and an explanation of how that criterion follows from her initial argument discussed in section 1. In many cases, her claims about what is 'rational' are intuitively plausible, but in no case do they follow from that argument.

The upshot is that Rand can and does use "man qua man" and "rational" as fudge words: words that can be interpreted to mean whatever it is convenient for them to mean at a particular time. Words that can be used to insulate her thesis from testing and to enable her to claim that her theory supports, or doesn't support, anything; since there is no precise and unambiguous definition of these terms.

6. Rand's intuitions

This will be a suitable topic to conclude with. Rand's main argument in "The Objectivist Ethics", as well as all of the moral claims she makes, here and elsewhere, rest squarely on her intuitions.

She would deny this. She says or implies at various points that she is giving a fully rational proof of her ethical system, that all her value judgements can be proven, and that ultimately they all rest on the evidence of the senses. She criticizes Aristotle for thinking ethics was not an exact science. The implication seems to be that she thinks her theory, as set out here, is an exact science. This claim would not withstand a casual acquaintance with any actual exact science.

Rand's ethical system rests on her assertion of premises 1, 2, 3, 5, 6, 10, and 12. She gives no defense for 1, 2, 5, 7, or 10; and very little for the others. This would be alright if all of those were self-evident truths, like the axioms of a mathematical system. But not only are none of them self-evident, I have raised serious doubts about every one of them.

It is worthwhile to remind ourselves of what mathematics--a real exact science--is like. Mathematicians too start with certain premises. But their premises are not highly controversial claims like "value only exists relative to a person" or "everyone should only serve his own good". A typical mathematical axiom would be something like, "if a=b, then b=a" or "the shortest path between 2 points is a straight line"--things that no one doubts. Mathematicians then proceed to deduce their theorems according to rigid and precise rules. That is why there are no divergent views about mathematical theorems--when Euclid wrote his Elements, no one disagreed with it or presented arguments against it. That's because Euclid had actually proved his theorems. Does Rand think that she 'proved' a series of moral theorems like that?

Alternately, she might view her 'science' of ethics as more like the natural sciences, like physics or chemistry, say. Now, for many centuries these were not exact sciences either. Part of what makes them relatively exact now is that scientists have evolved techniques for eliminating fudge factors. A scientist with a theory has to 'put up or shut up'. He can't make vague gestures or rest his arguments on vague concepts, such as "proper to a rational being" or "man qua man". The scientist has to identify a specific, clear observation, preferably a measurement, that he predicts can be made in a certain experiment. He has to say, in effect: "If, when you do this experiment, the needle on the instrument goes up to past .6, then my theory is wrong." Does Rand think she has a theory that is empirical like that?

Probably not; I hope not. Probably she was simply using "prove" and "exact science" loosely, and perhaps she was unfamiliar with mathematics and modern science. In any case, the fact remains that Rand has proposed no experimental test that can be done on her assertion that value is only agent-relative, or that people 'should' only pursue what is good for them. Importantly, scientific reasoning involves the idea of falsifiability: a scientist must be prepared to describe what specific set of observations would refute him. This is one of the things that prevents fudging. Note another aspect: the sort of observation the scientist identifies should not be something that is open to interpretation, as to whether that sort of observation happened--or at least, it should be minimally so. These are the sort of things that make science science.

Rand has done nothing like this. She has not told us what sort of specific, not-open-to-interpretation observations she would accept as refuting her. That is why her theory is not scientific, and it is not a proof. It is based on intuition: her intuition that the premises mentioned above are true. Likewise, her claims about what is rational and what promotes MQM rest on intuition, for the same reason. The terms are simply not defined in a scientific manner (if they were, you should be able to build an "MQM-ometer" which would tell you how much a given event promoted your MQM), so they require the exercise of individual judgement in a particular case--in other words, intuition.

Now, I am not saying this means the concepts are illegitimate, nor does this, by itself, show that her argument is wrong (though the objections I raised in section 2 do).

I am not opposed to the use of intuition in philosophy--quite the opposite, in fact--and nor am I saying that Rand's ethics is bad simply because it is not an exact science. What I am opposed to is someone's claiming their intuitions and philosophical theories as 'scientific proofs,' and then deriding the philosophical theories of others for being unscientific and therefore 'mystical.'

When we confront this sort of thing, it is imperative that we remember that Rand gave no argument for ethical egoism. She assumed egoism, discussed other propositions at some length, and then said that she proved it.