Pang Zi asked He Guan Zi, "What is the first priority of the sage’s way?" He Guan Zi said, "Respect for others." Pang Zi said, "What is the first priority in human conduct?" He Guan Zi said, "Militia comes first." Pang Zi said, "Why abandon Heaven and prioritize human conduct?" He Guan Zi said: "Heaven is lofty and difficult to know; blessings cannot be requested, calamities cannot be avoided. To emulate Heaven would lead to transgression. The earth is vast, deep, and thick; it offers much benefit but little authority. To emulate the earth would result in disgrace. The seasons change constantly, with nothing remaining the same; to emulate the seasons would lead to inconsistency. These three—Heaven, Earth, and Time—cannot serve as foundations for establishing moral transformation or social customs, so sages do not emulate them." Pang Zi said: "What about yin and yang?" He Guan Zi said: "The spiritual forces of yin and yang are awe-inspiring and luminous, harmonizing with Heaven; their subtle movements arise together with the Earth; and their cold or warm influences arrive in accordance with the seasons. When these three—Heaven, Earth, Time—are present, sages bring order; when they are absent, chaos ensues. Therefore, when people become wealthy first, they grow arrogant; when they become noble first, they become weak. Militia is something that may not be used once in a hundred years, yet it cannot be forgotten for even a single day. Therefore, human conduct prioritizes the military." Pang Zi said: "What does it mean to prioritize the military?" He Guan Zi said: "The military is about propriety, righteousness, loyalty, and trustworthiness." Pang Zi said: "I would like to hear the meaning of the military." He Guan Zi said: "When one loses the Way, they dare to use the lowly to defy the noble; when there is no righteousness, they dare to let the small encroach upon the great." Pang Zi said: "How should it be employed?" He Guan Zi said: "When injustice occurs, impose prohibitions; when things return to correctness, then abandon them. Therefore, not killing surrendered people is esteemed by the ruler’s way; nothing is more precious than keeping commitments. To gain territory but lose trust, sage kings will not occupy it. To break promises and violate agreements—each must have a reason."

Pang Zi said: "Disciples have heard that when the land is vast, the state becomes prosperous; when the population is numerous, the military grows strong; and when the military is strong, one can first achieve dominance over all under heaven. Now, combining what we see with what we do not see, this seems likely to be incorrect. Now the armies of great states are instead weakened and find themselves at a loss for words—what is the reason that prohibitions cannot be enforced and commands cannot be carried out?" He Guan Zi said: "To know what will come, examine the past; to understand antiquity, observe the present. Those who select people and then employ them become kings; those who employ people and then scrutinize them will perish. The emergence of insubordination arises when the unworthy encroach upon the virtuous—this is called ‘ling.’ When the common people dare not speak, it is called ‘sheng.’ What you are asking about now, be cautious and do not speak of it. A state with vast territory and wealth, numerous people and a strong military—yet still unable to achieve dominance over all under heaven despite having sufficient warriors and surplus strength—is due to an unvirtuous ruler who acts with arrogance and excess. Without virtue, one cannot practice non-action and thus cannot achieve success; arrogance leads to underestimating the enemy. Underestimating the enemy results in acting on personal bias toward what one does not understand. One then attempts to gain victory over an unworthy opponent, without considering long-term consequences, seeking only momentary satisfaction. Therefore, the ruler of a state suffers from false accusations and disgrace before all under heaven, while the strategists bear the blame for reckless actions in enemy states. The enemy state then holds them accountable, and when they are held accountable, those who advocated such policies feel ashamed of their weakness. A thousand humble people’s righteousness cannot correct even one noble person’s wrong. The state suffers wounds and injuries; when it retaliates with war, this means sending the innocent people to their deaths—it is a fault of the wicked ministers. Faults originate from above, while the punishment falls upon those below; enmity is thus formed externally. When feudal lords accumulate these records of crimes, it endangers and overturns the state. Rulers of succeeding generations are frightened and chilled in heart, left isolated without support or strength. This is why conflicts between two states remain unresolved; once a ruler ascends the throne, he does not regret past mistakes or erroneous plans. Shifting strategies and reckless actions are insufficient to cover accumulated faults, leading ultimately to family ruin, destruction of the clan, and lasting disgrace. The ruler must apologize to all under heaven and yield to enemy states; otherwise, warfare will never cease within the state, and wounds will never stop. How great is the harm of ignorance! How sorrowful is the ultimate calamity it brings! This is the fault of relying on noble status, departing from the Way, and having few people who possess virtue of their own. Therefore, before the army has even left its encampment, the forces can already be replaced. Now, the rulers of great states do not hear the Way of former sages and thus treat affairs lightly; their ministers lack wise counselors who understand fundamental principles but instead possess petty cunning. They act contrary to righteousness and lead with virtue in opposition. Hence, their military is weakened and finds itself at a loss for words; commands cannot be carried out, prohibitions cannot be enforced—what could possibly be so strange about that?"

Pang Zi said: "What is this petty cunning wisdom?" He Guan Zi said: "Laws and regulations cannot be used as a mold for arbitrary intentions. Even sages, by following principles and adhering to laws, may still fall short in some aspects. Therefore, one who does not thoroughly understand the law cannot become the ruler of all under heaven. Now, without principles yet acting on their own, without laws yet considering themselves sufficient, following no higher sage’s standards and making decisions solely based on one’s own understanding—although human affairs may seem complete, how can such a person still properly govern even himself? The ruler’s knowledge is unclear; he takes noble status as the Way and personal will as law. He clings to the times, deceives the world, suppresses below while concealing from above, causing affairs to go awry on both sides. He nurtures what is wrong and prolongs mistakes, regarding stillness as disturbance and peace as danger. The people suffer in their homes; resentment grows—who could have a greater calamity? If this is the case, on the day of retreat to the north, he will later realize that his fate has perished. Pang Zi said: "How should one thoroughly understand human affairs through the law?" He Guan Zi said: "Cangjie established laws; writing began with the Jiazi cycle. The annals were compiled and officials appointed, yet Cangjie himself did not follow the Way. Still, without Cangjie, written language would never have arisen. Even those laws recorded in charts—regarding their ability to express the mind, convey meaning, and promote the Dao as described—are merely one-tenth of what is truly needed. Therefore, those who thoroughly understand a hundred laws are considered outstanding individuals; yet if they remain unaware of the formless and cannot foresee what is about to happen but has not yet occurred, their knowledge is merely that of ten thousand ordinary people. Those who lack the wisdom of ten thousand common people cannot place their understanding above the learning of the world. Pang Zi said: "I have received your strict teachings and studied for some time now; upon reflecting on my teacher’s words, the disciple becomes increasingly fearful."