Politics is the application of ethics to a social context. Since the Objectivist ethics holds that each man is an end in himself, with his own life and happiness as his highest moral purpose, in politics it necessarily follows that each man possesses an absolute right to his own life. This does not mean that man has a right to survival, merely that he possesses soverignty over his mind and body, and thus the right to act on his own judgement. All other rights, i.e. liberty, property, pursuit of happiness, etc., are merely applications of the right to life.
In relation to other men, each man is fundamentally independent -- not because he can live on his own, but because he can only think with his own mind -- there is no "collective consciousness." All creative effort, every invention in history, every advance in the process that created the wealthy, industrial society in which we now live in, and which distinguishes us from the proto-humans that lived short, violent lives in caves without the aid of tools or fire was created by the mental effort of individual men and women. Sometimes they worked together, and their knowledge was increased by the work of predecessors, but each advance they made was their own. The mind cannot be received, shared, or borrowed. Every new idea in human history was a product of the work of an individual mind.
In a human society -- one that recognizes the independence of each man's mind -- each individual is an end in himself. He owns his life, and no one else's. Other men are not his slaves, and he is not theirs. They have no claim on his life or on the values he creates to maintain his life, and he has no claim on theirs. In a free society, men can gain immense values from each other by voluntarily trading the values they create to mutual gain. However, they can only create values if they are free to use their minds to exercise their creativity. A man is better living off on his own than as a slave to his brothers. Individualism is the recognition that each man is an independent, thinking being. An individualist recognizes no authority higher than his of judgment of the truth, and no higher standard of value than his own life. That which furthers his life is the good, while that which destroys it is evil. Individualism is opposed to collectivism, the idea that man does not have an independent mind, does not own his life, and lives as a slave to his brothers. Collectivism holds the evil idea that man's life has value only so far as it servers the society, State, or race.
Freedom and Force
Full article: Initiation of Force
To pursue the values necessary for his life a society, man requires only one thing from others: freedom of action. Freedom does not mean the freedom to act by permission of a state or a dictator, but the freedom to act however one pleases as long as one does not infringe on the same and equal freedom of others. To live in a society, man requires rights to protect the actions necessary to sustain his own life. All rights derive from a man's right to his own life, including the rights to life, liberty, property, and the pursuit of happiness. Thus, rights are moral principles defining his freedom of action in a social context. Rights are inalienable -- they are not given to man by any government and may not be morally infringed upon. A man may have his rights violated by a criminal or a corrupt regime, but morally he remains in the right, and the dictator and criminal in the wrong. Rights are not guarantees to things or obligation placed on others, but only guarantees to freedom from violence (the right to life), freedom of action (the right to liberty), and the results of those actions (the right to property). The only obligations one's rights impose on other men is to respect the same and equal rights of others -- the freedom to be left alone.
In a political context, freedom means solely the freedom from the initiation of force by other men. Only by the initiation of force can man's rights be violated. Whether it is by a theft, force, fraud, or government censorship, man's rights can be violated only by the initiation of force. Because man's life depends on the use of reason to achieve the values necessary for his life, the initiation of force renders his mind useless as a means of survival. To live, man must achieve the values necessary to sustain his live. To achieve values, man must be free to think and to act on his judgment. To live, man must be free to think. To be free to think, man must be free to act. In the words of Ayn Rand, "Intellectual freedom cannot exist without political freedom; political freedom cannot exist without economic freedom; a free mind and a free market are corollaries."
Because force renders man's mind useless, every man has the right to self-defense -- and the right to use force to retaliate against those who initiate force against him. However, no man -- and no group of men -- has the right to initiate force against any individual. The initiation of force is a great moral evil, but the use of force in self-defense is a moral requisite.
The proper name for a social system based on political freedom is capitalism. The essence of capitalism is not private property or market-based prices -- these are the consequences, not the essentials of such a system. A capitalist society is based on the recognition of individual rights, including property rights. Under capitalism, all property is privately owned, and the state is separated from economics just as it is from religion. Economically, capitalism is a system of laissez faire, or free markets.