As to goodness of character in general, Aristotle says that we start by having a capacity for it, but that it has to be developed by practice. How is it developed ? By doing virtuous acts. At first sight this looks like a vicious circle. Aristotle tells us that we become virtuous by doing virtuous acts, but how can we do virtuous acts unless we are already virtuous? Aristotle answers that we begin by doing acts which are objectively virtuous, without having a reflex knowledge of the acts and a deliberate choice of the acts as good, a choice resulting from an habitual disposition. For instance, a child may be told by its parents not to lie. It obeys without realizing perhaps the inherent goodness of telling the truth, and without having yet formed a habit of telling the truth; but the acts of truth-telling gradually form the habit, and as the process of education goes on, the child comes to realize that truth-telling is right in itself, and to choose to tell the truth for its own sake, as being the right thing to do. It is then virtuous in this respect. The accusation of the vicious circle is thus answered by the distinction between the acts which create the good disposition and the acts which flow from the good disposition once it has been created. Virtue itself is a disposition which has been developed out of a capacity by the proper exercise of that capacity. (Further difficulties might arise, of course, concerning the relation between the development of moral valuations and the influence of social environment, suggestion of parents and teachers, etc., but with these Aristotle does not deal.)
How does virtue stand to vice? It is a common characteristic of all good actions that they have a certain order and proportion, and virtue, in Aristotle's eyes, is a mean between two extremes, the extremes being vices, one being a vice through excess, the other being a vice through defect. Through excess or defect of what? Either in regard to a feeling or in regard to an action. Thus, in regard to the feeling of confidence, the excess of this feeling constitutes rashness - at least when the feeling issues in action, and it is with human actions that ethics are concerned - while the defect is cowardice. The mean, then, will be a mean between rashness on the one hand and cowardice on the other hand: this mean is courage and is the virtue in respect to the feeling of confidence. Again, if we take the action of giving of money, excess in regard to this action is prodigality - and this is a vice - while defect in regard to this action is illiberality. The virtue, liberality, is the mean between the two vices, that of excess and that of defect. Aristotle, therefore, describes or defines moral virtue as 'a disposition to choose, consisting essentially in a mean relatively to us determined by a rule, i.e. the rule by which a practically wise man would determine it.' Virtue, then, is a disposition, a disposition to choose according to a rule, namely, the rule by which a truly virtuous man possessed of moral insight would choose. Aristotle regarded the possession of practical wisdom, the ability to see what is the right thing to do in the circumstances, as essential to the truly virtuous man, and he attaches much more value to the moral judgments of the enlightened conscience than to any a priori and merely theoretical conclusions. This may seem somewhat naive, but it must be remembered that for Aristotle the prudent man will be the man who sees what is truly good for a man in any set of circumstances: he is not required to enter upon any academic preserve, but to see what truly befits human nature in those circumstances.
When Aristotle speaks of virtue as a mean, he is not thinking of a mean that has to be calculated arithmetically: that is why he says in his definition 'relatively to us'. We cannot determine what is excess, what mean and what defect by hard-and-fast, mathematical rules: so much depends on the character of the feeling or action in question: in some cases it may be preferable to err on the side of excess rather than on that of defect, while in other cases the reverse may be true. Nor, of course, should the Aristotelian doctrine of the mean be taken as equivalent to an exaltation of mediocrity in the moral life, for as far as excellence is concerned virtue is an extreme: it is in respect of its essence and its definition that it is a mean.
(From A History of Philosophy, by Frederick Copleston.)