First of all, make sure you don't over-simplify the relationship between valuing something and the actions that follow. It does not necessarily follow that because I value something more, I will always do everything for it. Knowing one's values is only the beginning of the rational decision making process.
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The question is: do we set ourselves as an ultimate value, or do we set virtue as an ultimate value. You should realize that setting virtue as an ultimate value is very different from something like utilitarianism, where the happiness of others is an ultimate value. First consider the outcome of all three. If we set virtue as a highest value (this may be poor phrasing - I'm referring to a kind of hierarchy of importance, either intrinsically or universally), we will be willing to die for a cause, or for our family. We are not coerced to do so, but we choose to. In Atlas, I recall that Fransisco and others risked their lives to save Galt.
If you are your own highest value, you place your own safety above everything - including your own moral code. You will run when threatened, and hide while the virtues you believe in are desecrated. You will leave your family to die rather than risk your life, if you live this principle consistently. Could you call it anything but self-serving cowardice? (I don't mean to be antagonistic, I'm just asking a direct, honest question)
Altruism says that we should place the good of the whole above the good of the individual. Some utilitarians would kill one unwilling man to give his organs to three strangers needing transplants. This is wrong. There is a difference between that, and say.. choosing to donate your organs to save your wife, child, and mother. It is wrong to force our will on an unwilling person - always - and we should do what we can to prevent that from happening. Laws prohibiting and punishing crimes (ie violence) are not an exception to this, but an example of it. I think I made it clear that I am not arguing for this.
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Now I'll move to some potential arguments for setting one's self as an "ultimate value." The three I am familiar with so far are: 1) I am in a better position to know myself, and thus will know virtue in ourselves more than we will see virtue in others. 2) This life is all I have. If I die, I can no longer be happy about anything. 3) There is a harmony of interests, in which others benefit by my "selfish" actions. The best way to help others is to value myself.
You may recognize the first as weak. The foundation there is ignorance and the inability to be objective. "I can't know him as well, so I might as well just think about myself." Honestly now.
The second does nothing to answer moral questions objectively. Saying that you should set yourself as a highest value because that's all you have is ridiculous! I have the love of my family - is that nothing? It assumes no afterlife. (please, don't tangent here) Worst of all, it doesn't solve anything. If joe and john have conflicting interests (happens all the time) and we ask them why the judgement should be in their favor, can they both just say, "I'm all I've got, so justice should serve me?" These supposed "exceptions" come every day.
The third I see as equally inept at actually answering real life questions. What about when our interests are NOT in harmony? It cannot be said that this only happens in rare emergencies, or as an metaphysical exceptions. Stop by a courtroom sometime. Claiming an exception on your own rule will weaken or destroy the rule. I don't think that this even answers the original question - why should we ever set ourselves as an ultimate value? That's basically saying that value is not universal or objective - at least when emergencies happen. Can you live by a moral code that doesn't hold up in some circumstances?
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One last note, and then I'll be done. I'm just toying with this as a side not to what I gather from your comments Dean - sorry if I misunderstand. Suppose that the value of something is not universal, but decided by each person. I know there have been many discussions on the subject, so let me summarize just one point (because I want your feedback).
If there is nothing which is universally better than another, than we can never do wrong, or betray our own values. Even if we "believe" in telling the truth, and then lie to get off the hook, we simply valued avoiding punishment more than we did telling the truth. To say that this is wrong implies that there is an extrinsic, universal, and objective hierarchy of value, and thus of morality.
Again, I'm glad to get the chance to put some of these things in words, and I should thank you all for challenging me. Again, if I have Objectivism wrong, and we do in fact agree, please correct me.