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Ah yes, "Who is John Galt?"
First of all, you have taken this statement out of context. The novel opens with a picture of New York City under a communist regime. The city is basically in ruins. What started as an idealistic, socialistic, egalitarian society, turned for the worst (as history and literature have so often presented). John Galt represents the solution to this major problem - and that is to transform society back to one of capitalism (and consumerism). In his idea - nothing should be gained except that which is earned by a man's own work.
The idea that "selfishness is both moral and practical" is a hyperbole that responds to realistic communist societies. The basic idea behind communism is that everyone is equal - equal owner, equal sharer, equal partner in everything. On paper it sounds great. In reality, humans are not equal - we just aren't. Some of us are smarter than others, some are stronger and work harder, some are more organized and work more efficiently, etc. So what happens in communism is everyone gets the same AMOUNT but does not work the same for it - and as a result - the leadership often rises above, takes more, works less - and lowers the amount that everyone else gets. (Remember Animal Farm?)
Capitalism, on the other hand, encourages competition. The idea (and often the reality) is that whoever works the smartest, or the hardest, or the most efficiently, will in fact get the most out of their work. In this way - equality is not measured person-to-person, but input-to-output, or work-to-benefits. For how much I work, this is how much I recieve. That is where the balance lies. John Galt's statement then, encourages people to put in more if they want to take out more. The selfishness part here is simply a reminder to be competitive. But when everyone is competing everyone is receiving what they deserve - which is the moral and practical part - according to Galt.
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