On a rational view of definition, a definition organizes and condenses — and thus helps one to retain — a wealth of knowledge about the characteristics of a concept's units. On the nominalist view, it is precisely this knowledge that is discarded when one defines a concept: as soon as a defining characteristic is chosen, all the other characteristics of the units are banished from the concept, which shrivels to a mere definition. For instance, as long as a child's concept of "man" is retained ostensively, the child knows that man has a head, two eyes, two arms, etc.; on the nominalist view as soon as the child defines "man," he discards all this knowledge; thereafter, "man" means to him only: "a thing with rationality and animality." [IOTE, 104]
Note the complete absence of empirical examples to support Peikoff's contentions: which nominalists, after all, believe the people discard knowledge after defining words? Is it too much to ask for names, followed by documented evidence? This absence of evidence is not only intentional, but necessary: there can be no examples because it's unlikely any nominalist ever held the position attributed them by Peikoff in this passage. What Peikoff and other Objectivists still can't seem to grasp is that definitions define words, not concepts. The definition explains how a particular word is to be used. It gives the meaning of the word in different terms. Neither Rand nor Peikoff ever bothered to provide evidence for the assertion that definitions organize and condense knowledge about the characteristics of a concept's units. Since definitions only express the same meaning in different words, they add no knowledge about external matters of fact (other than knowledge about word usage).
I'm not aware of any philosopher, nominalist or otherwise, who believes the definitions allow one to "banish" all the other characteristics of a concept. The philosopher who comes closest to this position (at least in practice) is, ironically, Ayn Rand. While Rand certainly would not have supported the position that definitions allow one to discard inessential characteristics, she did suggest that such characteristics can be ignored due to the need for "unit-economy." Consider the following passage:
It is the principle of unit-economy that necessitates the definition of concepts in terms of essential characteristics. If, when in doubt, a man recalls a concept's definition [i.e., he focuses on the "essential" characteristics to the detriment of the "inessential" characteristics] the essential characteristic(s) will give him an instantaneous grasp of the concept's meaning, i.e., the nature of its referents. For example, if he is considering some social theory and recalls that "man is a rational animal," he will evaluate the validity of the theory accordingly; but if, instead, he recalls that "man is an animal possessing a thumb," his evaluation and conclusion will be quite different. [IOTE, 65]
Rand is using "unit-economy" as an excuse for adopting a cliff notes view of knowledge. The meaning of a concept may include (for Rand) all the characteristics of its referents, but in practice one can ignore most of these characteristics and concentrate merely on the essential ones, those which are used in the definition, because, she insists, the essential characteristics supposedly gives one an "instantaneous grasp of the concept's meaning." Judging merely in terms of practical consequences, it is difficult to distinguish between Rand's theory (where non-essential characteristics can be ignored) and the theory Peikoff ascribes to "nominalists" (where non-essential characteristics are "banished"). Whether banished or ignored makes not a jot of difference when it comes to practical consequences. In either case, characteristics deemed as "non-essential" play no part in the evaluation and ultimate conclusion.
Since nominalists are not in fact guilty of Peikoff's allegations against them, Rand alone stands indited. Like many ideologues on the extreme ends of the spectrum, Peikoff is guilty of projection. He is making accusations against his adversaries which more aptly describe his own philosophy and that of his mentor. Peikoff has long touted Rand's ability to "think in essentials." But what is this "thinking in essentials" other than an ignoring of non-essentials?
Peikoff continues his rant against nominalism in the following vein:
On the nominalist view, the process of defining a concept is a process of cutting the concept off from its referents, and of systematically evading what one knows about their characteristics. Definition, the very tool which is designed to promote conceptual integration, becomes an agent of its destruction, a means of disintegration. [IOTE, 104]
Why isn't "thinking in essentials" a "systematic evading" of "what one knows about a referent's characteristics?" Why isn't Rand guilty, when she ignores "non-essentials," of "cutting the concept off from its referents?" Rand and Peikoff are guilty of that which they (falsely) accuse their adversaries. Rand's very example of thinking in essentials demonstrates the cognitive destruction of her approach. Rand would have us evaluate social theories on the basis of her definition of man, i.e., on her (largely unsubstantiated) conjecture that man is a "rational animal." This definition would dismiss, without a jot of evidence, the immense body of work accomplished by sociologists like Vilfredo Pareto and social psychologists like Jonathan Haidt. If there is anyone guilty of evasion and cognitive "disintegration," it is Rand, not her (mostly imaginary) philosophical enemies. Rand wanted to believe that the course of history could be changed through arguments and definition -- that, in short, human nature could be altered through mere patter. It's not facts or hard data that Rand deals with, but only her own wishful thinking.