PSYCH/GralInt-TED Talks-Barry Schwartz: Using our practical wisdom & more

The following information is used for educational purposes only.



Barry Schwartz: Using our practical wisdom

Filmed Nov 2010 • Posted Dec 2010 • TEDSalon NY2011



In an intimate talk, Barry Schwartz dives into the question "How do we do the right thing?" With help from collaborator Kenneth Sharpe, he shares stories that illustrate the difference between following the rules and truly choosing wisely.

Barry Schwartz studies the link between economics and psychology, offering startling insights into modern life. Lately, working with Ken Sharpe, he's studying wisdom.





























Transcript:


The first thing I want to do is say thank you to all of you. The second thing I want to do is introduce my co-author and dear friend and co-teacher. Ken and I have been working together for almost 40 years. That's Ken Sharpe over there.

(Applause)

So there is among many people -- certainly me and most of the people I talk to -- a kind of collective dissatisfaction with the way things are working, with the way our institutions run. Our kids' teachers seem to be failing them. Our doctors don't know who the hell we are, and they don't have enough time for us. We certainly can't trust the bankers, and we certainly can't trust the brokers. They almost brought the entire financial system down. And even as we do our own work, all too often, we find ourselves having to choose between doing what we think is the right thing and doing the expected thing, or the required thing, or the profitable thing. So everywhere we look, pretty much across the board, we worry that the people we depend on don't really have our interests at heart. Or if they do have our interests at heart, we worry that they don't know us well enough to figure out what they need to do in order to allow us to secure those interests. They don't understand us. They don't have the time to get to know us.

There are two kinds of responses that we make to this sort of general dissatisfaction. If things aren't going right, the first response is: let's make more rules, let's set up a set of detailed procedures to make sure that people will do the right thing. Give teachers scripts to follow in the classroom, so even if they don't know what they're doing and don't care about the welfare of our kids, as long as they follow the scripts, our kids will get educated. Give judges a list of mandatory sentences to impose for crimes, so that you don't need to rely on judges using their judgment. Instead, all they have to do is look up on the list what kind of sentence goes with what kind of crime. Impose limits on what credit card companies can charge in interest and on what they can charge in fees. More and more rules to protect us against an indifferent, uncaring set of institutions we have to deal with.

Or -- or maybe and -- in addition to rules, let's see if we can come up with some really clever incentives so that, even if the people we deal with don't particularly want to serve our interests, it is in their interest to serve our interest -- the magic incentives that will get people to do the right thing even out of pure selfishness. So we offer teachers bonuses if the kids they teach score passing grades on these big test scores that are used to evaluate the quality of school systems.

Rules and incentives -- "sticks" and "carrots." We passed a bunch of rules to regulate the financial industry in response to the recent collapse. There's the Dodd-Frank Act, there's the new Consumer Financial Protection Agency that is temporarily being headed through the backdoor by Elizabeth Warren. Maybe these rules will actually improve the way these financial services companies behave. We'll see. In addition, we are struggling to find some way to create incentives for people in the financial services industry that will have them more interested in serving the long-term interests even of their own companies, rather than securing short-term profits. So if we find just the right incentives, they'll do the right thing -- as I said -- selfishly, and if we come up with the right rules and regulations, they won't drive us all over a cliff. And Ken [Sharpe] and I certainly know that you need to reign in the bankers. If there is a lesson to be learned from the financial collapse it is that.

But what we believe, and what we argue in the book, is that there is no set of rules, no matter how detailed, no matter how specific, no matter how carefully monitored and enforced, there is no set of rules that will get us what we need. Why? Because bankers are smart people. And, like water, they will find cracks in any set of rules. You design a set of rules that will make sure that the particular reason why the financial system "almost-collapse" can't happen again. It is naive beyond description to think that having blocked this source of financial collapse, you have blocked all possible sources of financial collapse. So it's just a question of waiting for the next one and then marveling at how we could have been so stupid as not to protect ourselves against that.

What we desperately need, beyond, or along with, better rules and reasonably smart incentives, is we need virtue. We need character. We need people who want to do the right thing. And in particular, the virtue that we need most of all is the virtue that Aristotle called "practical wisdom." Practical wisdom is the moral will to do the right thing and the moral skill to figure out what the right thing is. So Aristotle was very interested in watching how the craftsmen around him worked. And he was impressed at how they would improvise novel solutions to novel problems -- problems that they hadn't anticipated. So one example is he sees these stonemasons working on the Isle of Lesbos, and they need to measure out round columns. Well if you think about it, it's really hard to measure out round columns using a ruler. So what do they do? They fashion a novel solution to the problem. They created a ruler that bends, what we would call these days a tape measure -- a flexible rule, a rule that bends. And Aristotle said, "Hah, they appreciated that sometimes to design rounded columns, you need to bend the rule." And Aristotle said often in dealing with other people, we need to bend the rules.

Dealing with other people demands a kind of flexibility that no set of rules can encompass. Wise people know when and how to bend the rules. Wise people know how to improvise. The way my co-author , Ken, and I talk about it, they are kind of like jazz musicians. The rules are like the notes on the page, and that gets you started, but then you dance around the notes on the page, coming up with just the right combination for this particular moment with this particular set of fellow players. So for Aristotle, the kind of rule-bending, rule exception-finding and improvisation that you see in skilled craftsmen is exactly what you need to be a skilled moral craftsman. And in interactions with people, almost all the time, it is this kind of flexibility that is required. A wise person knows when to bend the rules. A wise person knows when to improvise. And most important, a wise person does this improvising and rule-bending in the service of the right aims. If you are a rule-bender and an improviser mostly to serve yourself, what you get is ruthless manipulation of other people. So it matters that you do this wise practice in the service of others and not in the service of yourself. And so the will to do the right thing is just as important as the moral skill of improvisation and exception-finding. Together they comprise practical wisdom, which Aristotle thought was the master virtue.

So I'll give you an example of wise practice in action. It's the case of Michael. Michael's a young guy. He had a pretty low-wage job. He was supporting his wife and a child, and the child was going to parochial school. Then he lost his job. He panicked about being able to support his family. One night, he drank a little too much, and he robbed a cab driver -- stole 50 dollars. He robbed him at gunpoint. It was a toy gun. He got caught. He got tried. He got convicted. The Pennsylvania sentencing guidelines required a minimum sentence for a crime like this of two years, 24 months. The judge on the case, Judge Lois Forer thought that this made no sense. He had never committed a crime before. He was a responsible husband and father. He had been faced with desperate circumstances. All this would do is wreck a family. And so she improvised a sentence -- 11 months, and not only that, but release every day to go to work. Spend your night in jail, spend your day holding down a job. He did. He served out his sentence. He made restitution and found himself a new job. And the family was united.

And it seemed on the road to some sort of a decent life -- a happy ending to a story involving wise improvisation from a wise judge. But it turned out the prosecutor was not happy that Judge Forer ignored the sentencing guidelines and sort of invented her own, and so he appealed. And he asked for the mandatory minimum sentence for armed robbery. He did after all have a toy gun. The mandatory minimum sentence for armed robbery is five years. He won the appeal. Michael was sentenced to five years in prison. Judge Forer had to follow the law. And by the way, this appeal went through after he had finished serving his sentence, so he was out and working at a job and taking care of his family and he had to go back into jail. Judge Forer did what she was required to do, and then she quit the bench. And Michael disappeared. So that is an example, both of wisdom in practice and the subversion of wisdom by rules that are meant, of course, to make things better.

Now consider Ms. Dewey. Ms. Dewey's a teacher in a Texas elementary school. She found herself listening to a consultant one day who was trying to help teachers boost the test scores of the kids, so that the school would reach the elite category in percentage of kids passing big tests. All these schools in Texas compete with one another to achieve these milestones, and there are bonuses and various other treats that come if you beat the other schools. So here was the consultant's advice: first, don't waste your time on kids who are going to pass the test no matter what you do. Second, don't waste your time on kids who can't pass the test no matter what you do. Third, don't waste your time on kids who moved into the district too late for their scores to be counted. Focus all of your time and attention on the kids who are on the bubble, the so-called "bubble kids" -- kids where your intervention can get them just maybe over the line from failing to passing. So Ms. Dewey heard this, and she shook her head in despair while fellow teachers were sort of cheering each other on and nodding approvingly. It's like they were about to go play a football game. For Ms. Dewey, this isn't why she became a teacher.

Now Ken and I are not naive, and we understand that you need to have rules. You need to have incentives. People have to make a living. But the problem with relying on rules and incentives is that they demoralize professional activity, and they demoralize professional activity in two senses. First, they demoralize the people who are engaged in the activity. Judge Forer quits, and Ms. Dewey in completely disheartened. And second, they demoralize the activity itself. The very practice is demoralized, and the practitioners are demoralized. It creates people -- when you manipulate incentives to get people to do the right thing -- it creates people who are addicted to incentives. That is to say, it creates people who only do things for incentives.

Now the striking thing about this is that psychologists have known this for 30 years. Psychologists have known about the negative consequences of incentivizing everything for 30 years. We know that if you reward kids for drawing pictures, they stop caring about the drawing and care only about the reward. If you reward kids for reading books, they stop caring about what's in the books and only care about how long they are. If you reward teachers for kids' test scores, they stop caring about educating and only care about test preparation. If you were to reward doctors for doing more procedures -- which is the current system -- they would do more. If instead you reward doctors for doing fewer procedures, they will do fewer. What we want, of course, is doctors who do just the right amount of procedures and do the right amount for the right reason -- namely, to serve the welfare of their patients. Psychologists have known this for decades, and it's time for policymakers to start paying attention and listen to psychologists a little bit, instead of economists.

And it doesn't have to be this way. We think, Ken and I, that there are real sources of hope. We identify one set of people in all of these practices who we call canny outlaws. These are people who, being forced to operate in a system that demands rule-following and creates incentives, find away around the rules, find a way to subvert the rules. So there are teachers who have these scripts to follow, and they know that if they follow these scripts, the kids will learn nothing. And so what they do is they follow the scripts, but they follow the scripts at double-time and squirrel away little bits of extra time during which they teach in the way that they actually know is effective. So these are little ordinary, everyday heroes, and they're incredibly admirable, but there's no way that they can sustain this kind of activity in the face of a system that either roots them out or grinds them down.

So canny outlaws are better than nothing, but it's hard to imagine any canny outlaw sustaining that for an indefinite period of time. More hopeful are people we call system-changers. These are people who are looking not to dodge the system's rules and regulations, but to transform the system, and we talk about several. One in particular is a judge named Robert Russell. And one day he was faced with the case of Gary Pettengill. Pettengill was a 23-year-old vet who had planned to make the army a career, but then he got a severe back injury in Iraq, and that forced him to take a medical discharge. He was married, he had a third kid on the way, he suffered from PTSD, in addition to the bad back, and recurrent nightmares, and he had started using marijuana to ease some of the symptoms. He was only able to get part-time work because of his back, and so he was unable to earn enough to put food on the table and take care of his family. So he started selling marijuana. He was busted in a drug sweep. His family was kicked out of their apartment, and the welfare system was threatening to take away his kids.

Under normal sentencing procedures, Judge Russell would have had little choice but to sentence Pettengill to serious jail-time as a drug felon. But Judge Russell did have an alternative. And that's because he was in a special court. He was in a court called the Veterans' Court. In the Veterans' Court -- this was the first of its kind in the United States. Judge Russell created the Veterans' Court. It was a court only for veterans who had broken the law. And he had created it exactly because mandatory sentencing laws were taking the judgment out of judging. No one wanted non-violent offenders -- and especially non-violent offenders who were veterans to boot -- to be thrown into prison. They wanted to do something about what we all know, namely the revolving door of the criminal justice system. And what the Veterans' Court did, was it treated each criminal as an individual, tried to get inside their problems, tried to fashion responses to their crimes that helped them to rehabilitate themselves, and didn't forget about them once the judgment was made. Stayed with them, followed up on them, made sure that they were sticking to whatever plan had been jointly developed to get them over the hump.

There are now 22 cities that have Veterans' Courts like this. Why has the idea spread? Well, one reason is that Judge Russell has now seen 108 vets in his Veterans' Court as of February of this year, and out of 108, guess how many have gone back through the revolving door of justice into prison. None. None. Anyone would glom onto a criminal justice system that has this kind of a record. So here's is a system-changer, and it seems to be catching.

There's a banker who created a for-profit community bank that encouraged bankers -- I know this is hard to believe -- encouraged bankers who worked there to do well by doing good for their low-income clients. The bank helped finance the rebuilding of what was otherwise a dying community. Though their loan recipients were high-risk by ordinary standards, the default rate was extremely low. The bank was profitable. The bankers stayed with their loan recipients. They didn't make loans and then sell the loans. They serviced the loans. They made sure that their loan recipients were staying up with their payments. Banking hasn't always been the way we read about it now in the newspapers. Even Goldman Sachs once used to serve clients, before it turned into an institution that serves only itself. Banking wasn't always this way, and it doesn't have to be this way.

So there are examples like this in medicine -- doctors at Harvard who are trying to transform medical education, so that you don't get a kind of ethical erosion and loss of empathy, which characterizes most medical students in the course of their medical training. And the way they do it is to give third-year medical students patients who they follow for an entire year. So the patients are not organ systems, and they're not diseases; they're people, people with lives. And in order to be an effective doctor, you need to treat people who have lives and not just disease. In addition to which there's an enormous amount of back and forth, mentoring of one student by another, of all the students by the doctors, and the result is a generation -- we hope -- of doctors who do have time for the people they treat. We'll see.

So there are lots of examples like this that we talk about. Each of them shows that it is possible to build on and nurture character and keep a profession true to its proper mission -- what Aristotle would have called its proper telos. And Ken and I believe that this is what practitioners actually want. People want to be allowed to be virtuous. They want to have permission to do the right thing. They don't want to feel like they need to take a shower to get the moral grime off their bodies everyday when they come home from work.

Aristotle thought that practical wisdom was the key to happiness, and he was right. There's now a lot of research being done in psychology on what makes people happy, and the two things that jump out in study after study -- I know this will come as a shock to all of you -- the two things that matter most to happiness are love and work. Love: managing successfully relations with the people who are close to you and with the communities of which you are a part. Work: engaging in activities that are meaningful and satisfying. If you have that, good close relations with other people, work that's meaningful and fulfilling, you don't much need anything else.

Well, to love well and to work well, you need wisdom. Rules and incentives don't tell you how to be a good friend, how to be a good parent, how to be a good spouse, or how to be a good doctor or a good lawyer or a good teacher. Rules and incentives are no substitutes for wisdom. Indeed, we argue, there is no substitute for wisdom. And so practical wisdom does not require heroic acts of self-sacrifice on the part of practitioners. In giving us the will and the skill to do the right thing -- to do right by others -- practical wisdom also gives us the will and the skill to do right by ourselves.

Thanks.

(Applause)



**********************************************************************************************************************


Barry Schwartz: Our loss of wisdom

Filmed Feb 2009 • Posted Feb 2009 • TED2009


Barry Schwartz makes a passionate call for "practical wisdom" as an antidote to a society gone mad with bureaucracy. He argues powerfully that rules often fail us, incentives often backfire, and practical, everyday wisdom will help rebuild our world.

Barry Schwartz studies the link between economics and psychology, offering startling insights into modern life. Lately, working with Ken Sharpe, he's studying wisdom.

































Transcript:



In his inaugural address, Barack Obama appealed to each of us to give our best as we try to extricate ourselves from this current financial crisis. But what did he appeal to? He did not, happily, follow in the footsteps of his predecessor, and tell us to just go shopping. Nor did he tell us, "Trust us. Trust your country. Invest, invest, invest." Instead, what he told us was to put aside childish things. And he appealed to virtue. Virtue is an old-fashioned word. It seems a little out of place in a cutting-edge environment like this one. And besides, some of you might be wondering, what the hell does it mean?

Let me begin with an example. This is the job description of a hospital janitor that is scrolling up on the screen. And all of the items on it are unremarkable. They're the things you would expect: mop the floors, sweep them, empty the trash, restock the cabinets. It may be a little surprising how many things there are, but it's not surprising what they are. But the one thing I want you to notice about them is this: even though this is a very long list, there isn't a single thing on it that involves other human beings. Not one. The janitor's job could just as well be done in a mortuary as in a hospital.

And yet, when some psychologists interviewed hospital janitors to get a sense of what they thought their jobs were like, they encountered Mike, who told them about how he stopped mopping the floor because Mr. Jones was out of his bed getting a little exercise, trying to build up his strength, walking slowly up and down the hall. And Charlene told them about how she ignored her supervisor's admonition and didn't vacuum the visitor's lounge because there were some family members who were there all day, every day who, at this moment, happened to be taking a nap. And then there was Luke, who washed the floor in a comatose young man's room twice because the man's father, who had been keeping a vigil for six months, didn't see Luke do it the first time, and his father was angry. And behavior like this from janitors, from technicians, from nurses and, if we're lucky now and then, from doctors, doesn't just make people feel a little better, it actually improves the quality of patient care and enables hospitals to run well.

Now, not all janitors are like this, of course. But the ones who are think that these sorts of human interactions involving kindness, care and empathy are an essential part of the job. And yet their job description contains not one word about other human beings. These janitors have the moral will to do right by other people. And beyond this, they have the moral skill to figure out what "doing right" means.

"Practical wisdom," Aristotle told us, "is the combination of moral will and moral skill." A wise person knows when and how to make the exception to every rule, as the janitors knew when to ignore the job duties in the service of other objectives. A wise person knows how to improvise, as Luke did when he re-washed the floor. Real-world problems are often ambiguous and ill-defined and the context is always changing. A wise person is like a jazz musician -- using the notes on the page, but dancing around them, inventing combinations that are appropriate for the situation and the people at hand. A wise person knows how to use these moral skills in the service of the right aims. To serve other people, not to manipulate other people. And finally, perhaps most important, a wise person is made, not born. Wisdom depends on experience, and not just any experience. You need the time to get to know the people that you're serving. You need permission to be allowed to improvise, try new things, occasionally to fail and to learn from your failures. And you need to be mentored by wise teachers.

When you ask the janitors who behaved like the ones I described how hard it is to learn to do their job, they tell you that it takes lots of experience. And they don't mean it takes lots of experience to learn how to mop floors and empty trash cans. It takes lots of experience to learn how to care for people. At TED, brilliance is rampant. It's scary. The good news is you don't need to be brilliant to be wise. The bad news is that without wisdom, brilliance isn't enough. It's as likely to get you and other people into trouble as anything else. (Applause)

Now, I hope that we all know this. There's a sense in which it's obvious, and yet, let me tell you a little story. It's a story about lemonade. A dad and his seven-year-old son were watching a Detroit Tigers game at the ballpark. His son asked him for some lemonade and Dad went to the concession stand to buy it. All they had was Mike's Hard Lemonade, which was five percent alcohol. Dad, being an academic, had no idea that Mike's Hard Lemonade contained alcohol. So he brought it back. And the kid was drinking it, and a security guard spotted it, and called the police, who called an ambulance that rushed to the ballpark, whisked the kid to the hospital. The emergency room ascertained that the kid had no alcohol in his blood. And they were ready to let the kid go.

But not so fast. The Wayne County Child Welfare Protection Agency said no. And the child was sent to a foster home for three days. At that point, can the child go home? Well, a judge said yes, but only if the dad leaves the house and checks into a motel. After two weeks, I'm happy to report, the family was reunited. But the welfare workers and the ambulance people and the judge all said the same thing: "We hate to do it but we have to follow procedure."

How do things like this happen? Scott Simon, who told this story on NPR, said, "Rules and procedures may be dumb, but they spare you from thinking." And, to be fair, rules are often imposed because previous officials have been lax and they let a child go back to an abusive household. Fair enough. When things go wrong, as of course they do, we reach for two tools to try to fix them.

One tool we reach for is rules. Better ones, more of them. The second tool we reach for is incentives. Better ones, more of them. What else, after all, is there? We can certainly see this in response to the current financial crisis. Regulate, regulate, regulate. Fix the incentives, fix the incentives, fix the incentives ... The truth is that neither rules nor incentives are enough to do the job. How could you even write a rule that got the janitors to do what they did? And would you pay them a bonus for being empathic? It's preposterous on its face. And what happens is that as we turn increasingly to rules, rules and incentives may make things better in the short run, but they create a downward spiral that makes them worse in the long run. Moral skill is chipped away by an over-reliance on rules that deprives us of the opportunity to improvise and learn from our improvisations. And moral will is undermined by an incessant appeal to incentives that destroy our desire to do the right thing. And without intending it, by appealing to rules and incentives, we are engaging in a war on wisdom.

Let me just give you a few examples, first of rules and the war on moral skill. The lemonade story is one. Second, no doubt more familiar to you, is the nature of modern American education: scripted, lock-step curricula. Here's an example from Chicago kindergarten. Reading and enjoying literature and words that begin with 'B.' "The Bath:" Assemble students on a rug and give students a warning about the dangers of hot water. Say 75 items in this script to teach a 25-page picture book. All over Chicago in every kindergarten class in the city, every teacher is saying the same words in the same way on the same day. We know why these scripts are there. We don't trust the judgment of teachers enough to let them loose on their own. Scripts like these are insurance policies against disaster. And they prevent disaster. But what they assure in its place is mediocrity. (Applause)

Don't get me wrong. We need rules! Jazz musicians need some notes -- most of them need some notes on the page. We need more rules for the bankers, God knows. But too many rules prevent accomplished jazz musicians from improvising. And as a result, they lose their gifts, or worse, they stop playing altogether.

Now, how about incentives? They seem cleverer. If you have one reason for doing something and I give you a second reason for doing the same thing, it seems only logical that two reasons are better than one and you're more likely to do it. Right? Well, not always. Sometimes two reasons to do the same thing seem to compete with one another instead of complimenting, and they make people less likely to do it.

I'll just give you one example because time is racing. In Switzerland, back about 15 years ago, they were trying to decide where to site nuclear waste dumps. There was going to be a national referendum. Some psychologists went around and polled citizens who were very well informed. And they said, "Would you be willing to have a nuclear waste dump in your community?" Astonishingly, 50 percent of the citizens said yes. They knew it was dangerous. They thought it would reduce their property values. But it had to go somewhere and they had responsibilities as citizens. The psychologists asked other people a slightly different question. They said, "If we paid you six weeks' salary every year would you be willing to have a nuclear waste dump in your community?" Two reasons. It's my responsibility and I'm getting paid. Instead of 50 percent saying yes, 25 percent said yes. What happens is that the second this introduction of incentive gets us so that instead of asking, "What is my responsibility?" all we ask is, "What serves my interests?" When incentives don't work, when CEOs ignore the long-term health of their companies in pursuit of short-term gains that will lead to massive bonuses, the response is always the same. Get smarter incentives.

The truth is that there are no incentives that you can devise that are ever going to be smart enough. Any incentive system can be subverted by bad will. We need incentives. People have to make a living. But excessive reliance on incentives demoralizes professional activity in two senses of that word. It causes people who engage in that activity to lose morale and it causes the activity itself to lose morality.

Barack Obama said, before he was inaugurated, "We must ask not just 'Is it profitable?' but 'Is it right?'" And when professions are demoralized, everyone in them becomes dependent on -- addicted to -- incentives and they stop asking "Is it right?" We see this in medicine. ("Although it's nothing serious, let's keep an eye on it to make sure it doesn't turn into a major lawsuit.") And we certainly see it in the world of business. ("In order to remain competitive in today's marketplace, I'm afraid we're going to have to replace you with a sleezeball.") ("I sold my soul for about a tenth of what the damn things are going for now.") It is obvious that this is not the way people want to do their work.

So what can we do? A few sources of hope: we ought to try to re-moralize work. One way not to do it: teach more ethics courses. (Applause) There is no better way to show people that you're not serious than to tie up everything you have to say about ethics into a little package with a bow and consign it to the margins as an ethics course.

What to do instead? One: Celebrate moral exemplars. Acknowledge, when you go to law school, that a little voice is whispering in your ear about Atticus Finch. No 10-year-old goes to law school to do mergers and acquisitions. People are inspired by moral heroes. But we learn that with sophistication comes the understanding that you can't acknowledge that you have moral heroes. Well, acknowledge them. Be proud that you have them. Celebrate them. And demand that the people who teach you acknowledge them and celebrate them too. That's one thing we can do.

I don't know how many of you remember this: another moral hero, 15 years ago, Aaron Feuerstein, who was the head of Malden Mills in Massachusetts -- they made Polartec -- The factory burned down. 3,000 employees. He kept every one of them on the payroll. Why? Because it would have been a disaster for them and for the community if he had let them go. "Maybe on paper our company is worth less to Wall Street, but I can tell you it's worth more. We're doing fine."

Just at this TED we heard talks from several moral heroes. Two were particularly inspiring to me. One was Ray Anderson, who turned -- (Applause) -- turned, you know, a part of the evil empire into a zero-footprint, or almost zero-footprint business. Why? Because it was the right thing to do. And a bonus he's discovering is he's actually going to make even more money. His employees are inspired by the effort. Why? Because there happy to be doing something that's the right thing to do. Yesterday we heard Willie Smits talk about re-foresting in Indonesia. (Applause)

In many ways this is the perfect example. Because it took the will to do the right thing. God knows it took a huge amount of technical skill. I'm boggled at how much he and his associates needed to know in order to plot this out. But most important to make it work -- and he emphasized this -- is that it took knowing the people in the communities. Unless the people you're working with are behind you, this will fail. And there isn't a formula to tell you how to get the people behind you, because different people in different communities organize their lives in different ways.

So there's a lot here at TED, and at other places, to celebrate. And you don't have to be a mega-hero. There are ordinary heroes. Ordinary heroes like the janitors who are worth celebrating too. As practitioners each and every one of us should strive to be ordinary, if not extraordinary heroes. As heads of organizations, we should strive to create environments that encourage and nurture both moral skill and moral will. Even the wisest and most well-meaning people will give up if they have to swim against the current in the organizations in which they work.

If you run an organization, you should be sure that none of the jobs -- none of the jobs -- have job descriptions like the job descriptions of the janitors. Because the truth is that any work that you do that involves interaction with other people is moral work. And any moral work depends upon practical wisdom.

And, perhaps most important, as teachers, we should strive to be the ordinary heroes, the moral exemplars, to the people we mentor. And there are a few things that we have to remember as teachers. One is that we are always teaching. Someone is always watching. The camera is always on. Bill Gates talked about the importance of education and, in particular, the model that KIPP was providing: "Knowledge is power." And he talked about a lot of the wonderful things that KIPP is doing to take inner-city kids and turn them in the direction of college.

I want to focus on one particular thing KIPP is doing that Bill didn't mention. That is that they have come to the realization that the single most important thing kids need to learn is character. They need to learn to respect themselves. They need to learn to respect their schoolmates. They need to learn to respect their teachers. And, most important, they need to learn to respect learning. That's the principle objective. If you do that, the rest is just pretty much a coast downhill. And the teachers: the way you teach these things to the kids is by having the teachers and all the other staff embody it every minute of every day.

Obama appealed to virtue. And I think he was right. And the virtue I think we need above all others is practical wisdom, because it's what allows other virtues -- honesty, kindness, courage and so on -- to be displayed at the right time and in the right way. He also appealed to hope. Right again. I think there is reason for hope. I think people want to be allowed to be virtuous.

In many ways, it's what TED is all about. Wanting to do the right thing in the right way for the right reasons. This kind of wisdom is within the grasp of each and every one of us if only we start paying attention. Paying attention to what we do, to how we do it, and, perhaps most importantly, to the structure of the organizations within which we work, so as to make sure that it enables us and other people to develop wisdom rather than having it suppressed.

Thank you very much. Thank you. (Applause)

Chris Anderson: You have to go and stand out here a sec.

Barry Schwartz: Thank you very much. (Applause)