A social system is a set of moral-political-economic principles embodied in a society’s laws, institutions, and government, which determine the relationships, the terms of association, among the men living in a given geographical area. It is obvious that these terms and relationships depend on an identification of man’s nature, that they would be different if they pertain to a society of rational beings or to a colony of ants. It is obvious that they will be radically different if men deal with one another as free, independent individuals, on the premise that every man is an end in himself—or as members of a pack, each regarding the others as the means to his ends and to the ends of “the pack as a whole.”
There are only two fundamental questions (or two aspects of the same question) that determine the nature of any social system: Does a social system recognize individual rights?—and: Does a social system ban physical force from human relationships? The answer to the second question is the practical implementation of the answer to the first.
A social system is a code of laws which men observe in order to live together. Such a code must have a basic principle, a starting point, or it cannot be devised. The starting point is the question: Is the power of society limited or unlimited?
Individualism answers: The power of society is limited by the inalienable, individual rights of man. Society may make only such laws as do not violate these rights.
Collectivism answers: The power of society is unlimited. Society may make any laws it wishes, and force them upon anyone in any manner it wishes.