So far I've emphasized the ability of art to concretize abstractions. I haven't discussed the kinds of abstractions art can concretize, but it's important. Rand distinguished between cognitive abstractions, and normative abstractions.
The cognitive abstractions deal with understanding the world as it is. Cognition is about knowledge. When we identify how something works, or the nature of an entity, we're dealing with cognitive abstractions. If we say that gravity pulls objects towards each other, with the earth pulling us downwards to it, we're using cognitive abstractions. When we identify that dogs hunt in packs in nature, we're using cognitive abstractions. When we say that we went to a movie last weekend, we're describing facts, and thus are using cognitive abstractions. Cognition deals with identification of facts.
Normative abstractions deal with what should be, instead of just what is. Ethics is normative, suggesting what we should do, instead of just describing what we are doing or have done. The virtue of honesty is a normative abstraction, guiding us to live in a way that keeps us out of conflict with the truth.
Normative abstractions are in some ways far more complicated than cognitive abstractions. One reason is because they build off of the cognitive abstractions. You have to have an understanding of what is, before you can make statements about what should be. Statements about what ought to be need to be based on what is true.
There's another reason why normative abstractions are more complicated. They deal with much more far reaching topics. Think about what you need in order to make a suggestion about what you should do. For instance, what do you need to know in order to suggest honesty as a good policy?
You have to understand the world is knowable, and that knowledge can be false. You have to understand that false ideas can be intentionally promoted or accepted. You have to understand that faking an idea doesn't make it true, as the world has identity, and the consequences of an action based on a false idea will be undesirable. You have to understand the epistemological difficulties related to maintaining a lie in the face of evidence. You have understand that if others find out you lied, it will damage your relationship, which can have further negative consequences. You have to understand your own life is impacted by these choices.
This just scratches the surface of what you need to know just to see the benefits of the policy of honesty. And this is just one normative abstraction, and one of the easier ones to grasp. And further, to suggest it as an appropriate policy, one needs to be able to compare it to other policies, and understand those effects. Normative abstractions rely on a vast amount of knowledge, and deal with an incredible number of circumstances or scenarios. They require an integrated view of existence in order to make suggestions of how to act accordingly.
It's in the light of these enormously complex abstractions that the real purpose and power of art can be seen. It's these normative abstractions that need to be brought down into a concrete, manageable form. We need to solidify our understanding of what should be, if we're going to use that knowledge effectively.
There's a further problem of integration. Understanding how any particular virtue can be beneficial doesn't convey much about how a person should live his life. Art can solve this problem by integrating these normative abstractions into a single, unified character. It has the capability of presenting a moral ideal, a vision of what life should be like, and what an ideal person can and should be like.