Rational individualism and the waterhole
What would you do if you were a shepherd, sharing the one and only rapidly ceasing waterhole in a desert with 3 other shepherds? Kill the other shepherds? Negotiate a sharing agreement? Abondon the place in search of a new place to live? What is the rational decision?
If you're the strongest shepherd, wouldn't it be rational for both you and for all shepherds to let you use up the remaining water? If there are more intelligent children in your family than in the families of the other shepherds, wouldn't that also justify that you use up the water? By giving priority to the strongest shepheard, at least one of them could have a chance of surviving long enough to find a new place to live. The other shepherds would sacrifice their own lifes for the benefit of any life at all, after the waterhole has dried up. In comparison, a sharing agreement seems to be less rational, because the waterhole would dry up faster, everybody would die slowly, and the agreement would not be binding anyways, in the face of death. Ultimately, it might be wise for them to fill up their bottles and to start off into different directions immediately, rather than risking aggression against each other.
Of course, no individual can be expected to give up what he values most: his own life. No individual would have reason to believe that somebody else is definitely more able to find a solution. Hence, rational individualism would compell you to fight for yourself, and to place higher value on your life, the life of your family, and the life of your livestock, before giving any concern to other shepherds. Each shepherd, acting in his own self-interest, would act rationally. Individual rationalism would lead to a struggle for individual advantage. This could play out in the form of violence, displays of authority and oppression, with a randomn winner as the result. It could also play out in the form of sharing agreements, with compromise and inequalities as a result. Anyhow, the prisoner's dilemma precludes a solution that is best for all of them, that is, for the shepherds as a group.
If there is a long-distance runner among them, it would be rational for the group to let that shepherd use up the remaining water, rather than risking extinction of them all. But it would be irrational for any one sheperd to sacrifice his life for that purpose. It would be more rational to risk eventual death in search of a new waterhole.
How would Ayn Rand look at this situation?
Now extend this example to our human species. We don't (yet) have another alternative but to share our planet among us. We are growing at a rate of 80 million people per year. 840 million people are starving. 1,3 billion people live on less than a dollar per day (I bet the number is much higher). Europeans spend 11 million dollars on ice cream per year. That money could be used to save 11 million people from starving to death.
Does more equality serve us on the level of the human population? Isn't this question irrelevant, because we have allowed the state to own the power over the answer—the state that is intervined with our economy? Can't we just seperate politics from our economy—please? How can we know what works, if we let some people, who think who know what's right, rule over our behavior?
I think there is nothing inherently good or bad about living next to starving people, if this situation were the sole result of individuals competing with individuals. However, the situation is actually bad, because something we call "government" is involved in managing people and their priorities. Things are being "corrected" all the time and the interventions are justified by expedient explanations. When something goes wrong, the people are blamed and carry the burdon. The question who should get what would be completely irrelevant, if forces were left to themselves on the level of the individuals. It would be irrelevant, because it would be answered every day a million times by millions of interactions between people.
Implementing equality from the top down doesn't serve rational egoism, unless it also serves the individual working for it. People think for themselves and care about the groups they belong to. We don't care about the whole, the other group, and the truth. This means that special interests get a free ride—they do what they want and we elect the officials that support these groups, not the people. Starvation is not failiure, it is a symptom of our human nature. Allowing evil powers to deceive use and to intervene in our economy is the true failiure. Poverty would resolve itself, if individuals were left to seek advantage by working together against each other. Yes, together against each other. That's better than working against each other for a government that does everything but to identify and protect the timeless properties of our human nature, that allow us to prosper together.