As long as men remain ignorant of their basic mental process, they have no answer to the charge, leveled by mysticism and skepticism alike, that their mental content is some form of revelation or invention detached from reality. This kind of viewpoint can go into remission for a while,…however if it is not burned out of men’s souls completely by an explicit philosophical theory, it becomes the most virulent of cancers; it metastasizes to every branch of philosophy and every department of culture, as is now evident throughout the world. Then the best among men become paralyzed by doubt; while the others turn into mindless hordes that march in any irrationalist era looking for someone to rule them. 
In other words, the reason why people allow themselves to be directed by their sentiments and interests, rather than by “reason” and “reality,” is because they are ignorant of their basic mental processes. In particular, they are ignorant of a “full answer to the problem [of universals].” “Most philosophers did not intend to invalidate conceptual knowledge,” contended Rand, “but its defenders did more to destroy it than did its enemies. They were unable to offer a solution to the ‘problem of universals,’ that is: to define the nature and source of abstractions, to determine the relationship of concepts to perceptual data—and to prove the validity of scientific induction.” [FTNI, 30]
So our knowledge, according to Rand, must be “validated.” We must actually know how we know. Our beliefs, our knowledge claims must have a foundation or justification. And not just any kind of justification will do. We can’t just assume that we are right, on the basis of a kind of pragmatic feeling or intuitive sense, based on experience and tradition. We must know the precise reasons why we know what we know. Nothing less will do.
What we are confronted with here is a particularly extreme and intense version of foundationalism, coupled with an equally extreme version of justificationism. All beliefs must be “validated” (which in Objectivism seems to mean: justified on the basis of “self-evident” axioms). Everything not proved is dismissed as “arbitrary”; and any protests that this demand is itself arbitrary are dismissed as the most hateful and nihilistic skepticism.
Ayn Rand is not alone in having this mania for proving impossible and unnecessary contentions. Many other philosophers throughout civilized human history (most of them, thankfully, forgotten) have been afflicted by various forms of this sickness. Charles Augustus Strong, an American philosopher (remembered today, if he is remembered at all, as the son-in-law of the great monopolist, John D. Rockerfeller), was obsessed with demonstrating how consciousness could originate within an unconscious world, and made himself unpleasant to anyone who, like his friend George Santayana, were never troubled by such trivialities. Another obscure philosopher, Pierre-Louis Moreau de Maupertuis, once famous for formulating the “principle of least action,” was obsessed with explaining the darker mysteries of Motion. The historian Thomas Carlyle has some trenchant criticisms to make concerning Maupertuis’ unfortunate obsession with Motion:
It is well known there have been, to the metaphysical head, difficulties almost insuperable as to How, in the System of Nature, Motion is? How, in the name of wonder, it can be; and even, Whether it is at all? Difficulties to the metaphysical head, sticking its nose into the gutter there;—not difficult to my readers and me, who can at all times walk across the room, and triumphantly get over them. But stick your nose into any gutter, entity, or object, this of Motion or another, with obstinacy,—you will easily drown, if that be your determination!
Carlyle here gets it exactly right. It is not in the least important for us to “solve” the metaphysical or epistemological difficulties presented by these so-call “problems,” whether of Maupertuis’ motion, Strong’s origin of consciousness, or Rand’s universals. Each and every one of us triumphs over the problem of motion when we go to the bathroom; we triumph over the problem of the origin of consciousness when we wake up in the morning; and we triumph over the problem of universals every time we use a general term to cover multiple instances. These problems, in short, are entirely contrived and artificial, arising out of false ideals concerning knowledge and propagated by philosophers suffering from being far too anal about trivial matters.
Yet in Rand, it is even worse. She is attempting to use the problem of universals as a kind of scapegoat to blame everything she dislikes in the world. I suppose we can give Rand credit for not choosing a race or an ethnicity or a religious culture for her scapegoat. This shows in improvement and refinement in scapegoat theorizing, just as rearing of domestic animals is an improvement and refinement on hunting wild animals. But that’s all that can be said for it. For in the end, Rand’s contention that most of the moral, political, and social problems of the world ultimately stem from the failure to solve the problem of universals is mere wishful thinking on an epic scale. It places Rand in the role of the great heroine who, in the words of Peikoff, “overturn[s] the reign of the evil and save[s] the world.” Anyone who could actually believe such a fairy tale clearly has no head for reality.