Honesty is the recognition of the fact that the unreal is unreal and can have no value, that neither love nor fame nor cash is a value if obtained by fraud—that an attempt to gain a value by deceiving the mind of others is an act of raising your victims to a position higher than reality, where you become a pawn of their blindness, a slave of their non-thinking and their evasions, while their intelligence, their rationality, their perceptiveness becomes the enemies you have to dread and flee—that you do not care to live as a dependent, least of all a dependent on the stupidity of others, or as a fool whose source of values is the fools he succeeds in fooling—that honesty is not a social duty, not a sacrifice for the sake of others, but the most profoundly selfish virtue man can practice: his refusal to sacrifice the reality of his own existence to the deluded consciousness of others.
In this passage, Rand is trying to convince us that it is in our self-interest to be honest. While this is an entirely credible position, Rand’s arguments for it are mostly bad.
To start out with, Rand urges us that values obtained through dishonesty are not really values. Why not? Because she says so. But if a person uses dishonesty to get what they value, why isn’t it a real value? Value, for Rand, “is that which one acts to gain and/or keep.” If one attains that which one acts to gain and/or keep through dishonest means, why isn’t it still a value? Even more odd is Rand’s claim that honesty is “the recognition of the fact that the unreal is unreal and can have no value.” This implies that the dishonest person does not recognize the unreal as unreal—which is a palpable absurdity. The dishonest person is not necessarily guilty of believing in the unreal; no, what the dishonest person seeks is to trick others into believing in the unreal.
Rand’s claims get stranger as she proceeds. Dishonest people, she claims, are guilty of raising their victims “to a position higher than reality, where you become a pawn of their blindness, a slave of their non-thinking and their evasions, while their intelligence, their rationality, their perceptiveness becomes the enemies you have to dread and flee.” What can all this moral fustian possibly mean? What Rand seems to be saying is that dishonesty is bad because it only works with people who are blind, stupid, evasive, and non-thinking. But from an egoistical point of view, what’s so bad about that? There are sheep and sheep need to be sheared. So why not shear them?
About the best that Rand can do, in response to this line of thinking, is to try to paint this sheering in as unpleasant a light as possible. The self-interested individual shouldn’t seek to swindle the congenitally stupid because that would make him “dependent on the stupidity of others.” Yet what’s so bad about that? If an honest man was selling a “rational” product, he would find himself dependent on the judgment of “rational” individuals. Anyone trying to get money from other people, either by fair or foul means, is going to be dependent on those other people in some respect or other.
Rand concludes her argument with yet another vacuous platitude. The selfish man, she argues, needs to be honest because the alternative involves sacrificing “the reality of his own existence to the deluded consciousness of others.” But this is a glaring non sequitur. How can anyone, dishonest or not, sacrifice the “reality of his own existence”? If he exists, he is, ipso facto, real. He can no more “sacrifice” his reality than he can sacrifice his position in time and space. Rand is her guilty of biting off more than her rhetoric can chew.
Rand could have avoided all this confusion if she had been content to adopt a more sensible line of argumentation—one that relates to the legitimate interests of real people. Why is it in the individual’s interest to be honest? Because, more likely than not, if you’re dishonest, you’ll be found out and this will hurt your reputation. People will not do business with you. Decent people will stay clear of you. No one will trust you. None of this is in your self-interest.
Why didn’t Rand make this simple argument? Well, probably because she feared it might undercut some of her other virtues, such as her virtues of independence and integrity. To claim that dishonesty is bad because it hurts one’s reputation is tantamount to admitting that we should care about what others think of us, because we depend, to a certain extent, on the opinion of others. It is difficult for the individual to get on in life if everyone despises him. Most people are at least somewhat dependent on others; so a reputation for honesty is an advantage in social competition. A complete independence, a complete "I-don’t-care-what-anyone-else-thinks" integrity, are false ideals because they don’t represent the natural needs and demands of actual human beings.