Govern the state with the Tao.
Operate with surprise tactics.
Let go of fixed plans and concepts.
And the world will govern by itself.
How do I know that this should be so?
Because in this world,
The greater the restrictions and prohibitions,
the more impoverished the people become.
The sharper the weapons of the state,
the more troubled the nation will become.
The more cunning and crafty the plan,
the stranger the outcome.
The more laws and orders are posted,
the more thieves appear.
Therefore the sage says:
I take no action and people are reformed.
I enjoy tranquility and people become honest.
I do nothing and people prosper.
If I keep from imposing on people they become themselves.
As I Understand It:
Lao Tzu often suggests similarities between governing people and parenting children. He encourages non-interference with touch of common-sensical supervising. The highest form of governing or parenting is to let people grow without restriction or prohibiting. That way they are encouraged to explore their inquisitiveness. When freedom is given people often tend to decide based on what is best for everyone.
To be healthy, honest, free and responsible is within human nature. Parents and governments must set exemplars of highest nature for children and people to observe and discover their own path to virtues. Such strategy always succeeds.
Being honest and spontaneous releases the need to regulate the behavior of people under our charge. Each one of us has a strong sense of what we want to do and what our limits are. They readily follow examples in a non-authoritarian atmosphere.
With government and parents not interfering but closely observing children and people achieve a lot.
Dyer, W. Wayne. Change Your Thought–Change Your Life: Living the Wisdom of the Tao. Hay House, Inc. 2007.
The Way of Lao Tzu (Tao-te Ching), Translated, with introductory essays, comments, and notes by Chan, Wing-Tsit. The Bobbs-Merrill Company, Inc. 1963.