Barry Schwartz (on whom I’ve posted before) says it’s clear that “we need to rein in the bankers.” What is the solution indifferent, uncaring and selfish individuals and institutions?

More rules? More incentives? Barry Schwartz says rules and incentives are not long-term solutions because they de-moralize us. They create large populations of people who do everything for incentives. We become addicted to incentives. Further, there is no set of rules that will effectively get us what we need. Bankers are smart and they will find cracks in any rules. They will find a new way to bring the financial system, once again, to the point of collapse.

What we really need is virtue and character — “we need people who want to do the right thing.” We need “practical wisdom,” the moral will and skill to figure out what the right thing is, and then to do it. Aristotle studied carpenters and other crafts-people who appreciated that you often need to bend the rules to get the job done. Dealing with other people demands flexibility improvisation, and wise people understand this. Wise people do this rule-bending “in the service of the right aims.” We need to do this rule bending in the service of others, not merely ourselves. This is “practical wisdom” in a nutshell.

Schwartz offers several examples of rules operating to subvert wisdom. He speaks of doctors who are financially rewarded for operating too often and teachers who gear their classrooms to passing tests rather than educating. He speaks of the often horrific results of sentencing guidelines, which tie the hands of judges.

Schwartz applauds “canny outlaws,” everyday heroes who work hard to subvert the rules in order to really get the job done. Eventually, the system wears them down. He applauds “system changers” even more—the right thing is often a matter of changing the system. It is possible to keep a profession tuned to its proper purpose. And loving well and working well, guided by practical wisdom, will keep us happier, based on psychological studies.

Schwartz’ warning about rules and incentives reminds me of several books I have read regarding child-raising (e.g., The Manipulative Child, by E.W. Swihart, Jr., M.D. and Patrick Cotter, Ph.D). If rewards and punishments are not long-term solutions for children, why would they work for adults either?

I would add that the points made by Barry Schwartz complement my collection of ideas for what it takes to constitute “comprehensive moral education.” Not also, that Barry Schwartz is well known for his concept of the “paradox of choice.”