If the people are governed by laws and punishment is used to maintain order, they will try to avoid the punishment but have no sense of shame. If they are governed by virtue and rules of propriety are used to maintain order, they will have a sense of shame and will become good as well.
The Master said, “What a worthy man was Yan Hui! Living in a narrow alley, subsisting upon meager bits of rice and water—other people could not have borne such hardship, and yet it never spoiled Hui’s joy. What a worthy man was Hui!” (Analects 6.11)
If I am walking with two other men, each of them will serve as my teacher. I will pick out the good points of the one and imitate them, and the bad points of the other and correct them in myself.
The small man thinks that small acts of goodness are of no benefit, and does not do them; and that small deeds of evil do no harm, and does not refrain from them. Hence, his wickedness becomes so great that it cannot be concealed, and his guilt so great that it cannot be pardoned.