| | Jon L., your post 55 is excellent. It cuts to the heart of the issue. I look forward to the answers because so far I've seen a lot of people insisting: 1.) Rand's categorizations must be right despite her not having given an explicit defense of them; 2.) Her breakup is incompatible with politics being a subset of ethics; 3.) That this is of fundamental importance to the philosophy despite nobody being able to offer an explanation except by authority.
On the other hand, I'll give you a short description of why I think it's important.
First, politics can be thought of from the top-down, or the bottom-up. The top-down approach, sometimes taken by Rand, is to describe the kind of social system we need to live. We need an agency to protect our rights. It must be limited to that purpose. It is a night-watchman. Etc. There's nothing inherently wrong with that approach. She was right. We do need those conditions. But it leaves a lot in the air. While it says we need our rights protected, it discusses it in terms of some outside agency doing the protecting. It disconnects that agency from individual choices and actions. We need a government, and the rest is just details.
Approaching politics as an extension of ethics is a bottom-up approach. It makes our own choices and actions primary. If we want our rights protected, we have to actually protect them. It emphasizes the use of retaliatory force and actions taken to protect our rights, instead of emphasizing a lack of violations. It asks how our use of retaliatory force will be construed by others, and why we need a process in place to reduce confusion and make decisions among multiple individuals. This approach requires all politics discussion to be tied to the choices and actions of individuals.
There are plenty of implications. Let me provide an example. If a woman is getting raped in a street, do you stop to help? In the "social system" approach, the locus of responsibility for rights-protection is on the government, instead of the individual. I've seen Objectivists argue that it's not in their own rational self-interest to get involved, because they might get hurt. Let the government handle it. Don't risk it yourself. The problem is that it only takes a few more steps along that path to argue that nobody should be a police officer, since it's not in your interest to risk your own life. That's ultimately a major problem with the top-down approach. It can propose social systems that don't work with real individuals. If you need self-sacrificing people to protect your rights, isn't rational self-interest flawed?
In other words, the "social system" approach can be tied to ethics by understanding the social requirements (we need rights), but it can easily be divorced from actual choices and actions. It cuts off the means of protecting rights from the choices and actions of individuals. It says they're actually two different fields of study. And thus we have the disagreement here.
I'd be happy to go into more detail if you want.
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