After reading chapter 1 of Peikoff's "Understanding Objectivism," I decided to give my own induction as to why and how life serves as the standard of value.
Life sets the conditions for evaluating what can be a value, and what cannot be. A healthy banana that gives you nutrients is a value, but a disease-ridden one that makes you sick isn’t a value. A friend who understands you is a value, but a bully or thug who hurts you isn’t. All genuine values have some relationship to life; they further life in some way. Not all ends or goals are influenced by the achievement of other values, which precludes them from being a “standard of value.” Life is really the only phenomenon that is not neutral to literally anything a living organism does; every action is of some consequence.
The principle that “life is the standard of value” is not a deductive conclusion in the philosophy of Objectivism: it is inductive. It is an induction that arises from an analysis of value, of life, and of a standard, and observations of living organisms. If someone doesn’t understand that, then they do not really understand what Rand meant when she wrote that “life is the standard of value.”
You literally observe living organisms and you see them acting in various ways to obtain certain items or ends or goals. You see them improving, growing, advancing when they accomplish what they set out to do. And you see that when they fail to acquire what they need, or fail to protect themselves from predators or the environment, they weaken and die. How does the notion of "life,” let alone “standard of value,” come from just observations like these?
We can start with “value,” with analyzing that idea, and building on it to reach the next step. It’s defined as “that which one acts to gain and/or keep,” but what is more important now is to establish its connection to living organisms. Food, water, shelter, a hospitable climate: these are values, these are goals for which living things expend energy and act to obtain. Values vary in complexity, in importance to organisms, and in the actions required to reach them. But what they share in common is that they are conditioned by an alternative faced by the valuer. The alternative is that the valuer in question must act in order to reach the value, or it will not acquire it—if some item or condition is guaranteed, then it does not qualify as a value. One other important thing to note about values is that they come in means-end relationships: to become a professional scientist, you have to act to gain other values, such as knowledge, exemplary grades and awards, superb writing and self-editing skills, and the ability to explain your results to others (or find someone who can).
Next is “life.” Defined as “a process of self-generated, and self-sustaining action,” but it’s so much more than that, literally billions of different things besides that type of action. It’s flying, running, jumping, sleeping, breathing, eating, loving, caring, and many more things. The most important thing to note about life is its fundamental difference from inanimate matter: if the living organism fails to sustain itself and dies, it moves into the “inanimate matter” category, but no matter what happens to inanimate matter, it stays in that category. Living organisms face the alternative of existence or non-existence, of life or death, and inanimate matter confronts no alternatives.
Bringing those two ideas together: It’s because living things confront this alternative, possess needs and goals, and have to act in order to accomplish such goals, that values are possible: they have the goals, they are the valuers, they are the ones who face the alternative of life and death, who are not guaranteed to obtain their goal or even live. Values are necessary because without them, living organisms will die, and move to the “inanimate matter” category. Those two principles are inductions arising from what we know about the concepts “value,” “life,” and “goal,” among many others.
Standard of Value
Now, for “standard.” One internet definition states that it is, “a basis for comparison; a reference point against which other things can be evaluated.” In Objectivist terms, this means that a standard is "an abstract principle that serves as a measurement or gauge to guide a man's choices in the achievement of a concrete, specific purpose." There are a multitude of standards we employ: the grade “A,” “100%,” units of measurements for weights, mass, heat, pressure, and time. How does the philosophy of Objectivism identify the standard of value? By combining the material above into a new induction.
I said that values are means-end relationships: values are things or states that lead to other ends or goals, they are causes leading to certain effects. But now I need to tie everything up. The means-end relationships don’t go on for infinity—there is not an infinite number of means-end series like buying a car, running from a lion, or drinking purified water. Life is the ultimate end or goal in the pursuit of values, because they are the source of goals and ends: values are simply the means to life, the end. Life is the source of values, and values are the means to continue life, and cannot exist without life, so it is the only ultimate end. Because life is self-sustaining action, the actions necessary to keep a living thing existing, it is also the ultimate value, the value that encompasses all of the less significant values that living organisms pursue or act towards. Lastly, life is an end-in-itself, in that life is the means to only more life, the continuation of the same process. (I’m not saying that life is the only end-in-itself: Objectivism recognizes others, such as happiness, sex, and art. But it’s the end-in-itself that is relevant for this argument.) These reasons, combined with everything I said and can be observed lead to the induction that “life is the standard of value.”