Laozi said: The way of a gentleman is to remain tranquil in cultivating one's character and frugal in nurturing life. Tranquility means the subordinates are not disturbed; when subordinates are undisturbed, the people do not harbor resentment. If subordinates are disturbed, then government becomes chaotic; if the people resent, virtue is thin. When governance is in chaos, the virtuous do not offer counsel; when virtue is weak, the brave do not engage in battle. A disorderly ruler is not like this. In one day, he possesses the wealth of the entire realm and holds the power of a single sovereign. He exhausts the strength of his people to satisfy his desires for sight and sound. His ambition is focused on palaces, terraces, ponds, parks, exotic beasts, and rare curiosities. The poor suffer from hunger and cold while tigers and wolves are well-fed; the common people shiver in the cold as palace dwellers wear luxurious brocade. Thus, when a ruler indulges in useless luxuries, the realm is no longer at peace with its life and destiny.

Laozi said: Without tranquility and detachment, virtue cannot be clarified; without peace and quietness, one cannot achieve the distant; without breadth of mind, one cannot encompass all things; without uprightness and fairness, one cannot make just decisions. To see with the eyes of the realm, to listen with the ears of the realm, to deliberate with the heart of the realm, and to strive with the strength of the realm—thus decrees can reach down effectively, and the sentiments of ministers can be heard upward; officials function in order, and ministers gather like spokes around a hub. Joy is not expressed through gifts and rewards, nor is anger vented through punishment. Laws are clear but not harsh; channels of information remain open and unobstructed. The truths about good and bad conduct are presented daily before the ruler without resistance. Thus, the virtuous devote their wisdom, the unworthy exert their strength, those nearby find peace in their nature, and those far away cherish his virtue—this is the way to employ people effectively. One who rides a horse does not labor yet can travel a thousand li; one who uses a boat and oar does not swim yet can cross rivers and seas. If what is said is correct, even a common laborer or a herdsman should not be discarded; if what is said is wrong, even someone in the position of an emperor, minister, or high official should still not be employed. Right and wrong cannot be judged by rank, wealth, or status. If a plan is useful, one should not be ashamed of the person's position; if words are worth acting upon, one should not value eloquence alone. A foolish ruler does not act this way. He seldom employs those who serve with sincerity and loyalty, but instead favors corrupt and wicked favorites. The virtuous cannot gain audience, while those who are distant and lowly, striving to offer their utmost devotion, remain unheard. Those who speak are silenced with words, and those who advise are punished as criminals. If a ruler acts in this way yet desires peace within the realm and stability across all regions, he is far removed from wisdom and discernment.

Laozi said: One who truly reveres life, though wealthy and noble, does not harm the body through indulgence in luxury; though poor and lowly, does not burden the form through pursuit of profit. Now that one inherits the legacy and title from ancestors, surely he must value the origin of life itself. To lightly lose it is not a great confusion? To govern the world by valuing oneself, one can entrust the world to such a person; to rule the world through self-love is precisely why one may be entrusted with the governance of the world.

Wenzi asked about the foundation of governing a state.

Laozi said: The root lies in cultivating oneself. I have never heard of a case where the self is well-governed yet the state is in disorder, or where the self is disordered yet the state is well-ruled. Therefore it is said: Cultivate oneself, and one's virtue becomes genuine. The reason the Dao is so profound and subtle is that a father cannot pass it on to his son, nor can a son receive it from his father. Hence it is said: "The Dao that can be spoken of is not the eternal Dao; the name that can be named is not the eternal name."

Wenzi asked: What conduct will cause the people to love and trust their ruler?

Laozi said: Govern them in accordance with the seasons and do so with reverence and caution, as if standing at the edge of a deep abyss or treading on thin ice. Between heaven and earth, those who are virtuous are my subjects; those who are wicked are my enemies. In ancient times, the ministers of Xia and Shang turned against Jie and Zhou and served Tang and Wu instead. The people of Susa attacked their own ruler and returned to Shen Nong Shi. Therefore it is said: "What all people fear, one cannot help but also fear."

Laozi said: To govern a great realm, the Dao cannot be petty; when territory is vast, governance must not be narrow-minded; when one's position is high, affairs should not become burdensome; and when the people are numerous, instruction must not be harsh. Affairs that are burdensome are difficult to manage; laws that are harsh are hard to enforce. Demands that are excessive are hard to satisfy. If measured in inches, by the time one reaches a chi (a foot), there will surely be an error; if weighed in zhu (an ancient unit of weight), when reaching shi (about 120 pounds), it will inevitably exceed. When using measures like stones and feet, errors are fewer. Broad estimates are easier for wisdom to grasp, while intricate distinctions make it hard to achieve true insight. Therefore, whatever is of no benefit to governance but contributes to disorder, the sage does not do. Whatever is of no use yet causes expense, the wise person does not pursue. Therefore, accomplishments are never 厌烦 (tiring) when modest; affairs are never burdensome when simplified; and desires are never troubling when few. Modest goals are easily achieved; simple matters are easily governed; and few demands are easily satisfied. When responsibilities are entrusted to the people, they become even easier to manage. Therefore, petty eloquence harms righteousness; minor notions of righteousness disrupt the Dao. A narrow understanding of the Dao will inevitably lead to blockage; only when it is broad and simple can it be truly realized. The river, because of its winding course, is able to flow far; the mountain, because it rises gradually, is able to be lofty; the Dao, because of its leisurely and unhurried nature, is thus able to transform. One who is proficient in a single skill, thorough in one matter, and perceptive in one ability may be able to offer narrow arguments, but cannot respond effectively to broad or varied situations. One who tunes a musical instrument tightens the small strings and loosens the large ones; one who establishes affairs makes the lowly labor while the noble rest. The words of the Dao say: Vast and obscure, relying on heaven's might, harmonizing with heaven's breath. He who shares the same breath as heaven becomes an emperor; he who shares the same righteousness becomes a king; he who shares the same achievements becomes a hegemon; and he who lacks all of these will perish. Therefore, one who does not speak yet is trusted, who does not bestow gifts yet shows benevolence, and who does not anger yet inspires awe—this is the transformation brought about by aligning with the will of heaven. To give gifts yet not show benevolence, to speak yet not be trusted, and to express anger yet inspire no awe—this is achieved through outward appearances alone. Whereas giving with true benevolence, speaking with genuine trustworthiness, and expressing anger that truly commands respect—this comes from inner sincerity. Therefore, when governing with the Dao and reason, even few laws are sufficient for order; but without the Dao as a foundation, even numerous laws will be enough to bring chaos.

Laozi said: A whale that loses the water is controlled by ants; a ruler who abandons what he should uphold and competes with his ministers in affairs will be controlled by officials. To maintain one's position through non-action, those in charge of duties gain favor by mere obedience, while subordinates conceal their wisdom and do not use it, instead allowing matters to become the sole domain of their superiors. A ruler who does not entrust responsibilities to capable people but prefers to act alone will find his wisdom increasingly burdened and trapped by personal accountability. When his subordinates are exhausted, he cannot resolve matters; when his conduct falters in office, he cannot uphold control. If one's intelligence is insufficient for governance and authority inadequate to enforce punishment, there is no way to effectively interact with those below. When a ruler's joys and angers manifest from the heart, and his desires are evident outwardly, those in positions of duty will abandon righteousness to flatter him, while officials twist the law to follow such trends. When rewards do not match merit and punishments do not correspond to guilt, rulers and subjects become estranged; resentment grows between ruler and minister. Officials grow confused and disorderly, with wisdom unable to resolve matters; false praise and blame arise, beyond even clear discernment. Faults that are not one's own lead to self-reproach, causing the ruler to labor more while ministers grow idle. Therefore, he who dares to take over a master craftsman's work is rarely spared from injuring his hands. Racing on foot with a horse, one's strength will be exhausted and still fall short. Getting into the carriage and taking up the reins, even if the horse dies under the yoke, it is not as effective as having Bo Le to appraise the horse and Wang Liang to drive it. A wise ruler seeks such talent; without the labor of driving or selecting himself, he can travel a thousand li—this is skill in utilizing the virtue of others. The way of a ruler is to achieve results through non-action, to establish principles without personal preference. When there is action, it invites criticism; when there are preferences, it invites flattery. Where there is criticism, authority may be challenged; where there is flattery, one may be led astray. One who establishes policies yet is controlled by others cannot hold onto the state. Therefore, a skillful builder does not falter; this means establishing foundations without visible form. Only he who wields divine transformation can remain unvanquished by external forces. Desires within that do not arise are called "lai"; external evils that do not enter are called "bi." When the inner self is free of desire and the outer world is kept at bay, how can any matter be excessive? With the outside closed off and the inside tranquil, what task cannot be accomplished? Therefore, by not using and not acting oneself, yet allowing for use and action to occur naturally, one avoids boastful words and unjust deeds. By following names to hold accountable for realities, assigning matters to the appropriate officials, regarding ignorance as a virtue, and making restraint from harshness the principle—thus, each official's duties will have their proper standards of examination.

Laozi said: Food is the foundation of people, and the people are the base of a state. Therefore, a ruler should act in accordance with heavenly timing above, make full use of geographical advantages below, and employ human effort in between. Therefore, all living things grow and flourish, and myriad creatures multiply. In spring, one cuts the withered; in summer, one harvests a hundred fruits; in autumn, one stores vegetables for food; in winter, one gathers firewood from tree tops to provide for the people's needs. Thus, there is no lack of necessities in life, nor mouths left unfed after death. The laws of the ancient kings did not destroy entire herds to take rare beasts, nor drain ponds for fishing, nor burn forests for hunting. Before the jackal had made its offering to wild animals, snares and nets were not set in the fields; before the otter had offered to fish, fishing nets were not cast into water; before hawks and falcons had begun their hunt, bird traps were not spread on riverbanks. When grasses and trees had not yet fallen, axes and saws did not enter the mountains and forests; when insects had not yet burrowed underground for winter, no one used fire to clear fields. Young animals in gestation were not herded, unhatched eggs were not taken, fish shorter than a chi (about 23 cm) were not caught, and pigs or dogs less than a year old were not eaten. Thus, the flourishing of all things was like steam rising—this was how ancient kings responded to the seasons in preparation, the way to enrich the state and benefit the people. It is not merely through what one sees with one's eyes or walks underfoot that one can benefit the people; if those who wish to benefit the people keep this in mind, then the people will naturally be prepared and sufficient on their own.

Laozi said: In ancient times, enlightened rulers took from the people with restraint and sustained themselves within limits. They necessarily calculated the year's harvests, measured the people's accumulated stores, understood whether there was surplus or deficiency, and then made their levies accordingly. Thus, they could properly receive what heaven and earth provided and remain free from the afflictions of hunger and cold. When a ruler is deeply concerned for the people, if there are those in the state who suffer from hunger, he himself does not indulge in double flavors; if there are people suffering from cold, then even in winter he does not wear furs. Sharing both hardship and joy with the people, thus there will be no grieving subjects under heaven. A foolish ruler is not like this. He takes from the people without considering their strength, demands from below without measuring their stores. Males and females are deprived of their farming and weaving occupations to fulfill the upper demands. Their labor is ceaseless and resources exhausted; there is only morning with no evening in sight, leading to mutual resentment between ruler and subjects. Moreover, in the matter of sustaining life, one person tilling the soil with his own feet can plow no more than ten mu (about 1.5 acres), and the harvest from an average field does not exceed four dan (about 240 kilograms). The elderly, wives, and children depend on this for food. Occasionally there are disasters, yet they must still provide for the ruler's demands—thus, a compassionate sovereign would surely feel pity for them. Greedy rulers and tyrannical kings drain their subjects like a dried-up fish, to satisfy insatiable desires; thus the people no longer receive the harmony of heaven or walk in the virtue of earth.

Laozi said: Among the energies of heaven and earth, none is greater than harmony. Harmony means that yin and yang are balanced, day and night equally divided; thus all things sprout at the Vernal Equinox and mature at the Autumnal Equinox. To grow and to complete growth must necessarily depend on the essence of harmony. Therefore, excessive yin does not produce life, and excessive yang does not bring transformation; only when yin and yang intermingle can harmony be achieved. Therefore, the way of the sage is broad yet firm, strict yet warm, gentle yet upright, fierce yet benevolent. Too rigid and one will break; too soft and one will be rolled up. The Dao stands precisely between rigidity and gentleness. The rope as a measure can be rolled up and carried; stretched out, it becomes straight and extended. It is long without being excessive, short without being insufficient, straight yet not rigid—thus the sage embodies this principle. Excessive leniency leads to weakness, and weakness breeds no authority. Excessive severity becomes harshness, and harshness brings disharmony. Overindulgence in love results in laxity, and laxity undermines command. Excessive punishment invites disaster, and disaster severs all bonds. Therefore, harmony is most precious.

Laozi said: A state endures because it follows the Dao; a state perishes because its principles are blocked. Therefore, the sage observes transformations to discern their signs. Virtue has its periods of flourishing and decline, and changes in the winds are the first signs. Therefore, one who attains the way of life will grow from small beginnings to greatness; but if signs of ruin appear, even what seems established will surely fail. The downfall of a state does not depend on its size being insufficient; the success of the Dao does not depend on smallness being underestimated. Therefore, existence lies in attaining the Dao—not in being large—and destruction lies in losing the Dao—not in being great. Therefore, rulers of a disorderly state pursue territorial expansion but neglect benevolence and righteousness; they seek high rank yet disregard virtue and the Dao. This is abandoning what ensures survival and creating the very causes of destruction. If above, one disrupts the clarity of the three lights (sun, moon, stars), and below, loses the hearts of the ten thousand people, who could possibly support such a ruler? Therefore, those who examine themselves thoroughly do not need to prepare for others. In ancient times, those who practiced the Dao: deep practice was called virtue and the Way; shallow practice was termed benevolence and righteousness; superficial practice was labeled propriety and wisdom. These six principles—virtue, the Way, benevolence, righteousness, propriety, and wisdom—are the guiding framework of a state. Deep practice brings abundant blessings; shallow practice yields meager rewards; complete practice ensures submission from all under heaven. In ancient times, cultivating virtue and the Dao meant rectifying the entire world; cultivating benevolence and righteousness meant rectifying a single state; cultivating propriety and wisdom meant rectifying one village. Those with thick virtue achieve great things; those with thin virtue accomplish little. Therefore, the Dao does not establish itself through strength or valor, nor conquer by force and rigidity, nor obtain through greed and competition. To stand firm is to be supported by all under heaven; to prevail is for all under heaven to submit of their own accord; to gain is for all under heaven willingly to give, not through one's own taking. Thus, the yielding female establishes itself, the soft overcomes the strong, benevolence and righteousness bring gains, and he who does not contend finds none can rival him. Hence, the Dao in the world is like a great river or sea. The way of heaven is such that those who act will fail, and those who grasp will lose. To desire fame greatly and strive to obtain it—I see only unavoidable hardship in this; even if one grasps and attains it, it will not remain. Fame cannot be sought and obtained; it is given by the people of the realm. When the people bestow it, they return to one. What the people return to is virtue. Therefore it is said: He who possesses the highest virtue draws all under heaven to him; he who embodies supreme benevolence attracts those within the seas; he who upholds righteousness gains a nation's allegiance; he who practices propriety earns the loyalty of a village. Without these four virtues, the people will not return. When the people do not return to one, resorting to military force becomes a perilous path. Hence it is said: "Weapons are instruments of ill omen; they should be used only when absolutely necessary." To kill and wound people, yet not to glorify it—thus it is said: "On the ground of death, thorns grow; mourn with sorrowful tears, and conduct funeral rites in solemnity." Therefore, a gentleman focuses on virtue and the Dao, and does not place great emphasis on the use of military force.

Wenzi asked: Why are benevolence, righteousness, and propriety considered inferior to virtue and the Dao?

Laozi said: One who practices benevolence must judge by sorrow and joy; one who upholds righteousness must clarify through taking and giving. Within the four seas, sorrow and joy cannot be universally applied; draining the treasury's wealth is still insufficient to support all the people. Therefore, it is known that nothing compares to cultivating the Dao and practicing virtue, following the nature of heaven and earth—then myriad things will naturally align and the realm will be well-provided for. Benevolence and righteousness are thus secondary. "Therefore, a true man dwells in thickness (substance), not in thinness." Ritual is the outward form of substance; benevolence is the manifestation of kindness. Therefore, ritual is established according to human feelings and does not exceed its essence; benevolence does not overflow beyond proper kindness. Sorrow arises from genuine emotion, and honoring the dead with appropriate rites fulfills the standard of benevolence. To nurture life, one does not force others to achieve what they cannot reach, nor cut off what they cannot cease. When measure and capacity do not deviate from their proper balance, false praise has no basis for arising. Therefore, music is regulated sufficiently to bring joy together; happiness arises not beyond harmony. One who understands the distinction between life and death, and comprehends the appropriateness of extravagance and frugality, thus attains true balance. In later ages, this is not the case. Words and actions contradict each other; inner feelings oppose outward appearances. Ritual becomes a burden of complexity, music disturbs with licentiousness, customs drown in worldly trends, and false praise flourishes at court. Therefore, sages abandon such practices and do not employ them. To race on foot with a swift horse, man cannot surpass the horse; but by riding in its carriage, even the horse is at the mercy of man. Therefore, one skilled in employing the Dao uses others' resources to accomplish feats, relying upon what they can do to manage what they cannot. The ruler acts in accordance with the proper time, and the people respond by offering their wealth; the ruler treats them with propriety, and the people repay him with loyalty even unto death. Therefore, there is no endangered state without a perilous ruler, nor a troubled sovereign without distressed ministers. Virtue that surpasses one's position brings respect; emoluments exceeding one's virtue bring misfortune. Virtue is precious, regardless of rank; righteousness is valuable, no matter the amount. One should not usurp a position through false claims of virtue, nor steal wealth by feigning righteousness. The sage finds peace in poverty and joy in the Dao, does not allow desires to harm life, nor let profit burden himself; therefore, he attains tranquility without violating righteousness. In ancient times, one without virtue was not honored; one without ability did not hold office; one without merit received no reward; and one without crime faced no punishment. When promoting someone, it was done with propriety; when dismissing someone, it followed righteousness. In the age of petty men, however, promotion is as swift as ascending to heaven, while dismissal is as sudden as falling into a deep abyss—these words are spoken by ancients to criticize the present. Judging horses, one may err by overlooking a lean but capable steed; selecting scholars, one may fail due to poverty. Fat pigs fill the kitchen, while worthy men with bony frames remain unappointed to office. A gentleman examines reality and does not trust slander. If a minister knows of the ruler's faults yet offers no advice, he is not a loyal subject; if advised but ignored, it is the ruler who lacks wisdom. To see the people sinking into hardship without concern is not the act of a wise man. Therefore, to uphold integrity and die for righteousness is the duty of a subject; to endure cold and hunger out of compassion is the virtue of a kind father. To treat the great as inferior is to demean humanity; to challenge the superior with weakness is to defy heaven. Though one may offer sacrifices to heaven beforehand, misfortune will surely follow like falling into a deep abyss afterward. Therefore, in villages and towns, respect is given according to age—elders and the poor are not abandoned. In court, rank determines status, and distinctions of honor and humility exist accordingly. To revere the noble is because they are close to the ruler; to honor the elderly is because they resemble one's kin; to respect elders in age is because they are akin to an elder brother. Those born into nobility tend to be arrogant; those born wealthy tend to indulge. Therefore, few who are rich and noble can remain free from wrongdoing without using the clarity of the Dao as a mirror for self-reflection. To study without weariness is the way to cultivate oneself; to teach without tiring is the way to govern the people. With a virtuous teacher and good friends, one who abandons them to do wrong is rare indeed. To recognize virtue is wisdom; to cherish the virtuous is benevolence; to honor benevolence is righteousness; to respect the virtuous is propriety; and to take joy in the virtuous is music. Those of ancient times who were skillful in governing the world acted through non-action yet achieved all things. Therefore, to govern the realm is to embrace and accommodate; if one can attain this capacity for accommodation, then by non-action great achievements are realized. If one cannot embody this receptiveness, any action will surely bring misfortune. To embrace the world is to embody: "Gentle and yielding, as one wading a great river in winter; cautious and watchful, as if fearing all neighbors; composed and reserved, yet open and accommodating; fluid and unfixed, like melting ice; sincere and unadorned, like raw material; humble and unassuming, like muddy water; vast and receptive, like an empty valley." This is what it means to embrace the world. "To be gentle and yielding, as one wades a great river in winter"—this means not daring to act recklessly. "To be cautious and watchful, like fearing all neighbors"—this means fearing injury from all sides. "To be composed yet open, as if reserved for accommodation"—this means humility, reverence, and respect. "To be fluid and unfixed, as melting ice"—this means refraining from hoarding or accumulating. "To be sincere and unadorned like raw material"—this means not daring to appear refined or complete. "To be humble and unassuming like muddy water"—this means avoiding clarity and brightness. "To be vast and receptive like an empty valley"—this means not daring to become full or overflowing. "Not daring to act" means retreating, never taking the lead. "Fearing self-injury" means preserving softness and weakness, never claiming superiority. "Humility and reverence" mean lowering oneself and respecting others. "Not hoarding" means diminishing one's own advantages, not clinging stubbornly. "Not appearing refined or complete" means allowing imperfection, not pretending to be whole. "Avoiding clarity and brightness" means enduring disgrace and filth without seeking freshness or purity. "Not daring to overflow" means recognizing one's insufficiency and never presuming superiority over others. The Dao, by retreating, is thus able to lead; by preserving softness and weakness, it attains strength. By lowering itself, it rises above others; by diminishing its own advantages, it becomes firm in reality. By allowing imperfection, it achieves completeness; by enduring filth and disgrace, it remains fresh and pure; by recognizing insufficiency, it becomes virtuous. The Dao acts through non-action yet accomplishes all things.