As a corollary of his vital principle, Schwartz argues that a seemingly true conclusion based on false premises has a different meaning than it would if based on true premises. Thus, he maintains that no ideological agreement is possible between an Objectivist who believes in liberty on true premises and someone (like a libertarian) who believes in it on false premises, because he who believes in liberty on false premises does not believe in liberty at all—which is a non-sequitur, as we have seen. Nor is Schwartz even consistent with this principle, as he makes an exception in the case of von Mises, an avowed altruist and subjectivist.

Despite his professed agreement with a correspondence theory of truth, Schwartz repudiates that theory in the exposition of his "vital principle." So apparently does Rand in her definition of truth as "the recognition of reality," since a proposition can correspond to reality without constituting the recognition of reality.

Even worse, Schwartz’s vital principle leads to subjectivism and relativism, by implying that the same conclusion "may be true for you but not for me" depending on the truth or falsity of our respective premises—a view that not only violates common sense notions of objectivity but also vitiates the Objectivist metaphysics. Schwartz may appear to avoid such an inference when he argues that a conclusion derived from false premises does not have the same meaning as it would if derived from true premises. But, as we have seen, the meaning of the terms in a valid conclusion is determined by their meaning in the premises, not by the truth or falsity of the premises.

In other words, a conclusion is true if it forms a meaningful sentence (namely, a proposition) that corresponds to reality. It need not be based on true premises, and can even be arbitrary, i.e., asserted without evidence, for it is not necessary that one know that a proposition corresponds to reality in order for it to do so. Indeed to claim that a proposition’s correspondence to reality depends on knowledge of its correspondence is like claiming that the existence of a fact of reality depends on knowledge of its existence. It implies a primacy-of-consciousness metaphysics.

Thus, knowledge is contextual in a way that truth is not. For a conclusion constitutes knowledge only if it is grounded in adequate evidence and based on true premises, whereas a conclusion can be true despite inadequate evidence or false premises, if it corresponds to reality. In short, knowledge is one thing; truth, quite another. It is important that an objectivist epistemology recognize the distinction.