What changes Terry Malloy from failed boxer to hero?

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In the end, Terry recognizes his own need to act.  This is what transforms him from failed boxer, or a "bum," to a hero.  Terry's own conscience is what provides the change and transformation.  Kazan and the filmmakers wish to make the point that the individual is what determines moral order and structure in the world.  If Terry does not act, immorality and injustice lives.  If Terry does act, this becomes a statement around which others can coalesce and form community.  Terry becomes the lynchpin for all of this to happen.  His own being betrayed by his brother and the resentment he harbors for being nothing more than a "thug" and a "bum" is added by the encouragement of Father Barry and Edie.  They help to awaken Terry's conscience so that he can initiate in his own transformation from being "D and D" to being a force of good and a spokesperson for that which is right and honorable.  It does not hurt that the dockworkers unify around Terry's example, demonstrating that Terry's personal change is also representative of the start of social change, as well.

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