01/24/2011 09:27 am ET Updated Nov 17, 2011

The Right Way to Do the Right Thing

We Americans are growing increasingly disenchanted with the institutions on which we depend. We can't trust them. They disappoint us. They fail to give us what we need. This is true of schools that are not serving our kids as well as we think they should. It is true of doctors who seem too busy to give us the attention and unhurried care we crave. It's true of banks that mismanage our assets, and of bond rating agencies that fail to provide an accurate assessment of the risks of possible investments. It's true of a legal system that seems more interested in expediency than in justice. It's true of a workplace in which we fulfill quotas and hit targets and manage systems but wind up feeling disconnected from the animating forces that drew us to our careers in the first place.

In our efforts to make things better, we rely on two tools -- detailed rules, and smart incentives. But neither of these tools is up to the task. Rules subvert people's ability to find novel solutions to novel problems. And incentives only encourage people to go through life asking "what's in it for me?" instead of "what can I do to help?" What we need, beyond rules and incentives, is character -- virtue. And the particular virtue we need above all is what Aristotle called "practical wisdom."

A wise person knows when to follow rules and when to improvise around them.
A wise person can take the perspective of the people she serves, and empathize with them.
A wise person can improvise.
And a wise person uses these skills in the service of the right aims.
Rules and incentives not only fail to nurture wisdom; they actively undermine it.

Practical Wisdom: The Right Way to Do the Right Thing

Though he didn't use our language in his moving speech in Tucson on January 11, President Obama's speech was pervaded by an appreciation of the need for virtue -- for kindness, for heroism, for empathy, and for love. Wise people have these virtues, and society cannot do without wise people.


Barry Schwartz and Kenneth Sharpe are the authors of "Practical Wisdom: The Right Way to Do the Right Thing" (Riverhead, December 2010).