Value

A value is that which one acts to gain or keep. In Objectivism the concept is not a matter of preference or approval: it names a relation between an entity and a goal it acts to achieve, and it is possible at all only because living things face the alternative of existence or non-existence.

“"Value" is that which one acts to gain and/or keep. The concept "value" is not a primary; it presupposes an answer to the question: of value to whom and for what?”
~ Ayn Rand, "The Objectivist Ethics", The Virtue of Selfishness

Why values presuppose an alternative

Rand's argument begins with a thought experiment about an immortal, indestructible robot. Such an entity could not have values. Nothing could threaten it, nothing could benefit it, and no outcome would make any difference to it. It could have no interests, because it could not gain or lose anything.

Only a being that can cease to exist confronts outcomes that matter. Life is therefore the precondition of value, not one value among others:

“It is only the concept of "Life" that makes the concept of "Value" possible.”
~ Ayn Rand, "The Objectivist Ethics", The Virtue of Selfishness

This is the step that connects Objectivist ethics to metaphysics rather than to convention or feeling, and it is the basis for the answer to the is-ought problem: an "ought" is what a living thing must do to achieve a goal, and the goal is set by the requirements of its own life.

Standard of value versus purpose

Two questions are easily conflated:

The standard of value is the measure by which something counts as good or evil. For a living organism it is that organism's life qua the kind of thing it is. For man, who survives by reason, it is man's life qua man: not bare survival, but living by the means proper to a rational being.
The purpose is the beneficiary. Each person's own life is his own ultimate value, and his own happiness is the moral purpose of his life.

The standard is factual and the same for everyone; the purpose is individual. Confusing the two produces most of the objections to Objectivist egoism.

Values, virtues and the cardinal three

A virtue is the action by which a value is gained and kept. Rand named three cardinal values with the virtues corresponding to them:

Reason — gained by rationality
Purpose — gained by productiveness
Self-esteem — gained by pride

Values are also hierarchical: some are ends, others means, and a value pursued without regard to where it sits in that hierarchy is pursued arbitrarily. See Hierarchy.

Common misunderstandings

That "whatever a person acts to gain is a value" makes the theory subjective. The definition identifies what values are; it does not certify that every value pursued is a rational one. A person can pursue what destroys him. That is what makes a code of morality necessary.
That "value" means the same as "preference". A preference is a feeling. A value is a goal-directed action, and whether it serves the standard is a question of fact.
That money is the standard. Money is a medium of exchange, an effect of production rather than a measure of value. See Trader Principle.

Discussion

References

Rand, Ayn. "The Objectivist Ethics", The Virtue of Selfishness. New American Library, 1964.
Peikoff, Leonard. Objectivism: The Philosophy of Ayn Rand, chapter 7.

External links

Values at the Ayn Rand Lexicon