“Honesty” is the refusal to fake reality, that is, to pretend the facts are different from what they really are. If rationality is commitment to reality, honesty is the rejection of unreality. The rational man recognizes that existence exists; the honest man, that only existence exists.
Dishonesty creates a break with reality because it dissociates facts from desires by confounding what is value. Value is that which one acts to gain or to keep, but it has an additional criterion: objectivity. When one judges something as having value, this is an evaluation made from reality taking as its standard the life of man qua man. Value is therefore a form of truth; it is a type of identification that must correspond to reality. Dishonesty is to place supposed values above reality, giving primacy to irrational desires. Since man lives in reality, he must conform to reality.
In regard to conscience, honesty consists in taking the process of cognition seriously, being faithful to reason. As for the method, honesty means developing an active mind. As for motivation, honesty means seeking knowledge because that is what will lead to right action. As for content, honesty is the refusal to falsify any item in your mind, whether fact, knowledge or value.
The dishonest man does not count on his intelligence to prosper; he seeks to manipulate others. His basic means of survival is not reason, but other people. He evades from reality toward an unreality based on the interpersonal relationships he creates. He transforms others into his puppets and, at the same time, becomes dependent on their consciousness and, what is worse, on their unconsciousness.
Not even a “white lie” makes sense; facts should never be masked, even if the goal is to help. A man does not render service to his fellowmen by becoming an accomplice to their blindness. On the contrary, the service is in helping them to see reality.
But, of course, everything has its context. Reality is a unity, and all knowledge is integrated and contextual. The principle of honesty, in the objectivist view, is not a divine command or a categorical imperative. It does not say that lying is wrong “in itself” and therefore under all circumstances. Like all scientific generalizations, moral principles are absolute within certain conditions. Lying is absolutely wrong, but only under certain conditions. But it can not be inferred that honesty is therefore relative and that every lie must be judged “by its own merits” without reference to principle. The proper approach is to recognize that virtues are broad abstractions, which must be applied to concrete situations by a thought process. In this process, one must observe all the rules of the correct epistemology, including the definition by essential elements and the maintenance of context. There is no easy way.
But the way must be followed at any cost.