The socioeconomics of the Dao De Jing and the espoused author Lao Tzu have been called libertarian in the past by the likes of Murray Rothbard with the implication of an equally shared supporting capitalist doctrines which seek to draw the parallel between the unseen force of the Dao and the naturally balancing forces of supply and demand which govern the markets. This argument is not without evidence or foundation even within the context of the Dao De Jing and its quotations, but this evidence is neither proof nor without contradiction. In the broader context of the Jing the same passages which may be used to support a capitalist doctrine of free-trade would soon be seen to be an admission of the naturally voluntary trade that would exist the vacuum of interference by a ruling legislature, which is made more than evident by an overwhelming number of passages denouncing rulership as anything but a title to be discarded.
The most easily identifiable passages of the Jing which seem to support more Rothbardian economic practices are numbered thirty-six and seventy-five respectively, which contain the quotes, “That which must be taken from should be given to” and, “The people go hungry. It is because their leaders tax their food so much that they must go hungry. People are hard to rule. It is because their leaders meddle that they are hard to rule.” These explicitly establish an opposition to interfering with the trade of the people by the hand of the state, (a sentiment that is echoed from the previous passage marked fifty-three,) as well as bolster the position of equal exchange in trade. The many passages which continue to praise the inaction of a ruler in interfering with the people’s natural behavior continue to promote a nearly anarchist doctrine of non-legislation, which necessitates free trade to be what is legislated by default. The mistake in the pro-capitalist interpretation is the assumption that just because there is no interference in the people’s individuality and trade by a government means that the people are expected to participate in the seeking of profit or that a market must meet a demand simply because there is demand for it.
“Therefore, the Sage performs his end of an agreement, yet does not hold others liable. The virtuous takes charge of the agreement. The unvirtuous takes charge of only what he is owed.” The quote from passage seventy-nine of the Jing explicitly rejects the idea of debt altogether, for the Sage is only to concern himself with taking care of the needs of others, with no regard for what it may mean for his own pocket. The Jing also preaches a general disapproval of profits, acquisition and luxury found in passages seventy-seven, forty-eight and forty-four, defining the Dao’s very Eastern tradition of valuing modesty over exuberance. The Dao’s wealth is said to be found in the sufficiency of having just enough for oneself. In multiple instances the Sage is said to care for people indiscriminately, without any desire to be repaid for doing so. He cares for all things and does not abandon them, no matter how unvirtuous or “bad” they may be. He does this because “The greatest good is like water. It is good to the multitude of things, and it does not struggle. It resides even where men loath, and this makes it close to the Dao.” (Jing Eight.)
While a doctrine against greed and acquisition does not eliminate the ability for the Dao to coincide with the free market, it does require an acknowledgement that the market would be driven purely by voluntary aid in the event that the profit motive be removed. It is contradictory to the supply and demand by which entrepreneurs capitalize off of a need in the market, and further contradictory to the fulfillment of needs of luxury and opulence. The Sage would not be required to, nor would he desire to humor any requests from the people which came from greed or a lack of humility, instead only seeking to fulfill the basic needs of the people which are the most naturally sustainable.
It is the addition of passages forty-seven and eighty which truly eliminate the more globalist and enterprising aspects of capitalism from coexisting with the Dao. In both passages the people are encouraged to not leave their towns to even meet the citizens of towns within earshot of themselves if their own dwellings contain everything which they require to sustain themselves. The Sage is encouraged to learn as much of the world as he needs without leaving his place. This is because the Dao does not seek to create an expansive world of cooperation, but to collectivize a sustainable community into self-sufficiency. Without a ruler, this leads the people to fulfill each other’s needs without expecting anything in return, but also to seek nothing which one does not need. It defines property as nonexistent and unnecessary to people who know exactly how much they need and desire to claim nothing more, for in keeping nothing one cannot lose anything.
The final dynamic of the socioeconomic implications of the Daoist tradition is its obvious reverence for the natural world and its beauty when left alone. The doctrine of wu wei which, when taken into account with the doctrines of simplicity and stillness which are found in nearly every single passage of the Jing, encourages the Sage and the people to take as little from nature as possible, and only to do so in order to fulfill one’s physical needs. Even the value of gold and jade are rejected in favor of common stone décor so as to not tarnish the land and its natural state of existence which the monks call the Dao of Earth. This again does not eliminate the idea of a free market entirely, but once again eliminates the profit motive of the harvesting of resources for enterprise, which is only emphasized by the previous instances of the same sentiments which make up capitalist societies as we know them. The Dao is anti-production, anti-industrialization and anti-consumerism to its core.
It is because of this that the Dao would function much more effectively alongside a more collectivist society of mutual ownership. Even though the lack of a state or its interference in the market would make the economy legally a free-market, voluntaryist capitalism, the philosophy of the Dao and the way it would have the Sage and the people conduct themselves would lead them to use this freedom of trade to collectivize and establish a mutual ownership of nearly everything but what is currently in use. It echoes the concepts of property and ownership which are espoused by parties such as Proudhon, and Stirner’s union of egoists closer than it truly does Rothbard or Ayn Rand, but without the industrial society or historical progression one sees in the analysis of Marx. So while Rothbard may be correct in his assessment that the mythical Lao Tzu may have been the first libertarian in recorded history, it would be closer to the truth that he were a proto-anarchist living in an age which anarchy was not a true concept of government, and the similarities between the Dao and the “unseen hand of the free market,” end just as abruptly.