If you want a formalized debate on the faults of Objectivism I suggest you read Critique of Objectivism. The following are my personal, informal opinions on Objectivism and what it means.
The thing about many philosophies is that if they are put into practice they fall flat on their face. Plato knew it; look at The Republic which describes a philisophically just society that in general would suck to be a part of. In a similar way, let's take Ayn Rand's Objectivism and create a world from it - that is a world where everyone subscribes to Objectivism's values and ethics.
Now if you're not sure what Objectivism is, Cheese Triangle Objectivism is probably the simplest explanation: basically your goal in life is to get as many cheese triangles as possible by taking them away from everyone else. The more you have, the more you are winning. A cheese triangle then is equivalent to a unit of wealth. It could be monetary wealth, power, status or respect.
So we've got this world where everyone is out to obtain each other's cheese triangles. But there is a problem: where do cheese triangles come from? There are two obvious possibilities:
There is an infinite number of cheese triangles. This doesn't work because then people wouldn't need to steal cheese triangles from each other, they could simply discover the infinite source of cheese triangles and take from that. Besides, is wealth an infinite commodity in our world? Technically it is not.
- There is a finite number of cheese triangles. This brings about another problem, a doomsday scenario. If cheese triangles are a finite resource then it is possible to lose all your cheese triangles. It is also possible to die, in which case all the triangles you owned are returned to the pool of triangles to be obtained by other players. What happens is that the better players get cheese triangles from the inept players until all the inept players die. Then, the better players compete against each other until most of them die. When carried to its logical end there will be one player owning all cheese triangles. Then he will die leaving a planet empty except for an unclaimed pile of cheese triangles. Do we want this to be the end of the human race?
You might say that the doomsday is not possible since there are always kids being born that will start to play the game. But why should procreation occur? Procreation uses up tons of cheese triangles. The process of raising a kid basically means giving him some of your cheese triangles so he can play. As well, your kid will be competition for you. So, only bad players have children. The good players simply don't procreate. But wait? This suggests another doomsday scenario: the pool of inept players grows until all players are inept. Again, is this what we want?
Objectivism only works if there are players who are not Objectivists. Objectivists need labourers and creators because these two are people who create cheese triangles at a rate that allows everyone to increase their triangle count with only some backstabbing required. They survive by creating cheese triangles, keeping some for themselves and giving the rest to other players. Consider and engineer who builds a bridge across a gorge. The bridge is a cheese triangle since it allows new power - the ability to cross the gorge. It is a new cheese triangle since that power did not exist before the creation of the bridge. It gets triangles for the engineer since his managers will pay him for it, but it also gives triangles to his managers as they control the bridge and decide how many triangles it costs to cross.
Engineers, as labourers and creators, simply are not Objectivist. They don't fit into Ayn Rand's system of backstabbing managers and capitalists. A system entirely made of Objectisits is simply not stable.
And since I am an engineer I think that's stupid.