Is the pleasure/pain mechanism the basis of ethical norms?

Here's the original question, which I've obviously changed quite a bit -- tho I still think that the essence is the same:

Molyneux claims in his Youtube video that he agrees with the Metaphysics and Epistemology of Ayn Rand’s philosophy and that her views in those areas form the basis of his own take on Ethics and Politics ( At 00:46 - 01:00 ) he states his primary issue with Objectivism is Rand’s solution to the “Is-Ought” problem and that She did not solve the problem of Ethics. To drive his point home he uses a quote from Atlas Shrugged (Galt’s speech), starting at 02:25. Molyneux agrees with much of the quote as he reads aloud. As he reads he registers some discontent but continues. At 07:45 Molyneux finally arrives at what he believes to be the error Rand makes. The contradiction he claims is that Rand is claiming no automatic knowledge and then is contradicting herself “a couple paragraphs later” (09:36), he reads on; pausing on the phrase “...capable of nothing but pain...”. Molyneux then questions (10:08) “but If human beings don’t have any instincts which tell them right from wrong, why would somebody doing wrong be capable of nothing but pain?” After this Molyneux dives into problems associated with Hedonism. He returns to Rand (13:13) “Man has no automatic code of survival” and that irrational, immoral people are only capable of pain. Molyneux then claims that Rand is referring to an inbuilt knowledge of what to do (ie. pain in the face of irrationality), and that contradicts her statement of no automatic code. In other words, irrationality equals pain, rationality equals happiness and from this we get our built in code. Molyneux summarizes (13:39) “She says we have no inbuilt or instinctual ways to figure out how to act but if we act right we are happy and if we act wrong we end up in pain.” He reiterates the contradiction is at this point. He then disagrees that the achievement of one’s values results in happiness with an example of wanting to become a published author and how the hypothetical denial of that value shouldn’t lead to your unhappiness because being published is outside one’s own control and one should be happy about the virtuous path followed despite the value denial of being published. Molyneux then uses examples of Hitler and Saddam Hussein whom he claims prefered their paths of immorality. Molyneux restates in compressed form again (16:10) “Ayn Rand is basically arguing, and saying that you can’t choose to be immoral and be happy, but then she can’t say there is no inbuilt guide within human consciousness to guide you towards right or wrong.” His use of sociopaths shows, he believes, that we don’t all have this built in guide and that is why sociopaths behave as they do. He states clearly that sociopaths do enjoy hurting others and dominating others (17:00 -17:34). Without a common inbuilt reference you have no “purchase” with sociopaths. He further reiterates (20:34) “the pain and pleasure principle is not a basis for ethics, right, it makes them subjective.”. Later he arrives at Rand’s point that if you want to live you are bound by the requirements of mans life (consequences), by the work and judgement of your mind (21:38), but the work and judgement of your mind might be to dominate all those around you and steal their stuff.

My own personal thoughts:
It seems that Molyneux has not taken the distinction between standard and purpose referred to in VOS (see lexicon “Standard of Value”), that a standard is the measurement to guide choices in the achievement of a specific purpose. In this case the purpose is living a life of a rational being, which means that actions taken (ie. initiation of force) which negate rationality in oneself or others fails to meet the standard and must be rejected. He seems to suggest that Rand’s standard and purpose is seeking happiness and avoiding pain. However, this is incorrect. The purpose is living, the standard is the necessity of man’s life (ie. a rational being, mind and body free to interact). So a sociopath is seeking happiness and using happiness as the standard. However, the means they choose to arrive at happiness violate the requirements of man’s life. Whether a sociopath receives pleasure or pain from their irrational behavior is not relevant. Feelings of pleasure or happiness become relevant only after you have aligned your actions with the proper standard of value.