![]() ![]() Speak With Confidence: Four Fixes That Work April 11, 2023.It’s Not You - It’s Your Goals: Knowing When to Quit May 30, 2023. ![]() Swarthmore professor Barry Schwartz says rules and incentives are an “insurance policy against disaster, but produce excellence.” In the recent book, Practical Wisdom: The Right Way to Do the Right Thing, Schwartz and co-author Kenneth Sharpe, also a Swarthmore professor, say what is needed is not more bureaucracy. Instead, society needs the Aristotelian ideal that trumps all others - practical wisdom. Knowledge at Wharton recently sat down with Schwartz to discuss why individuals fail to do the right thing, what practical wisdom looks like in practice and what organizations can do to regain people’s trust.Īn edited version of the transcript appears below. Knowledge at Wharton: You note that there is a collective mistrust of the institutions that surround us. Schwartz: I don’t want to be monomaniacal about this. ![]() There are probably many reasons, not one, for this distrust of institutions. One that Ken and I focused on in writing Practical Wisdom is that we have come to the view as a society that when things are broken, the way to fix them is either by making more rules or by creating smart incentives…. If you make a lot of rules and you have somebody standing over people’s heads watching them to make sure that they actually obey the rules, then you don’t care what people’s motivation is. You have to follow the rules or you’re out. if schools don’t work, rigid curricula and scripts for teachers follow. If the financial system is broken, change the incentive structure so that bankers stop ripping off their clients. The point of our book is that you will never get what you need and want out of any institution that matters by relying on rules and incentives. Rules and incentives are the booby prize. If you can’t count on anything else, then you impose rules and incentives. It’s an insurance policy against disaster, but it doesn’t produce excellence. ![]()
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