The moral of the story
Since the first written story -- The Epic of Gilgamesh, about a brave, lonely man -- was inscribed in Sumerian times, storytelling has probably been humanity's prime teaching tool. While paper has replaced tablets, books should be as substantial as stone in your child's life: classic fables and stories, books with lessons to learn, things to see, and many colorful surprises.
One of my earliest memories is of my mother reading to me The Little Engine That Could: toot, toot, the steep mountainside, the huffing machine, the sheer will that even now, 30-odd years later, I carry with me as an example of how to be when the going gets tough. And not all stories need to have obvious morals or even be written down. Children are always eager to hear tales from a parent's own life -- a dilemma, a scary time, and what Mom or Dad did to get through.
For kindergartners and grade-schoolers, you might make moral storytelling an interactive game. Take an Aesop's fable -- "The Tortoise and the Hare," for instance -- and read just shy of the ending. Close the book. Ask your child to imagine how it might end, and why. You'll be inserting her into the dilemma and asking her to tussle with it in a very visceral manner. This is a wonderful way to hone imagination and critical thinking skills, essential to the development of a moral mind.
Quite simply, people respond far better to praise than to punishment. Look for opportunities to compliment your child when he says "thank you" or undertakes other behavior that reflects compassion, honesty, or responsibility, such as helping out a younger sibling. Try to limit criticism, and remember that name-calling begets name-calling, demand begets rebellion.
A few months ago, I decided it was time for my daughter to learn to say "please." After all, she could say "Read me the book" and "I want a cookie." So, when she asked me for a snack, I said, "Say 'please.'" She looked at me blankly. "Puh-leeease," I repeated, mouthing it out as though this were speech therapy, which in a way, I suppose, it was. She started to cry and reached up her arms, all greed and hunger. "No," I said, holding the cookie higher. "Say 'please.'" This quickly turned into our own little version of a food fight, she demanding, I withholding, and before long we were totally polarized. From the South Pole, where she sweated out her rage, she screamed and screamed; from the North Pole, where I stood in icy resistance, I held her treat high out of reach. Then she got so upset that she started to cough and turned all red, and I thought, "I really hope she doesn't throw up," at which point I gave in, handed her the cookie, and chalked this up to a colossal failure.
Demands like that don't work, especially with a toddler, whose psyche is eerily similar to an adolescent's, full of rebellion and stamp. You can't force moral behavior; you have to back into it. When my husband came home, I said, "We're going to raise a rude kid; she won't say 'please,' especially not after" and I told him what had happened.
Then we had an idea: Our daughter loves music, so we wrote a song about a very polite spider and taught it to her. It worked. A few days later, she sang "please" before she ever said it, and as soon as we heard it come out of her mouth, we told her she was one of the world's seven wonders. She so loved the praise that she kept saying "please," and "thank you" soon followed.