Until I make a link of this sort, much of my previous post would read like it was a highly selective reading, as many areas in the Daodejing appraise common human conduct, but U is most definitely a non-normative domain (it doesn't have any vested interest in human conduct), and without it, my reading would be consistent, but hardly comprehensive. A clear and correct interpretation will avoid that kind of cherry-picking.
Also, these kinds of moves come with many risks of succumbing to "Rand-tardation." We don't want to conflate some tautologous statement for a non-tautologous one, as the ironically labeled "Rational Egoists" do. We want to treat 道 as a device for comparing our lives to those things that are outside of it, and then to adopt the way of life that turns some true predicate of ourselves (P(...a...)) to its complementary predicate (~P(...a...)).
- 道 doesn't exercise anthropic bias.
"上善若水。Water very much seems like it is not invasive or evasive, and thus cooperates with everything and aids in its survival. However, people don't much like dwelling in caves, rivers, or wells. We don't like the feeling of drowning or of dehydration. Humans share, then, a love-hate relationship with a necessity for human life. People are very much this way about many elements under U. However, for Laozi, this informs us how far the apples (humans) have fallen from the tree (U). U, like 道, isn't competitive or preferential. It really isn't anything but itself. No predicate that describes a specific subset of U can be true of every element in U, and we can show that very few things are true of U itself (all of which follow from operational definitions).
"Higher good is like water:
The good in water benefits all, and does so without contention. It rests where people dislike to be, so it is close to the Way."-- Daodejing, 8:1~8:2 (trans. Thomas Cleary)
In this sense, 道 cannot itself be a collection of codes, commandments, or definitions for goodness, which is what we expect from an ethics. We cannot "become just as 道 is." The ethics of Laozi's work only apply when we begin to contrast our human condition with the condition of 道.
- Subsets of U (that is, specially qualified domains of discourse), which include humanity, can provide simple examples for ethical or political heuristics.
"功遂身退天之道。"Heaven, the sky above us (天) is not quite the sort of ethereal super-world that we get from other Chinese traditions and Western thinking. Instead, the sky (天) is above us, a sort of upper bound of a set. We are of 天下, of that which is under the heavens (and '天下' is often translated into pronouns like everything, or everybody). Strictly speaking, that translation should belong to 道 if it is U, but we may want to consider the matter under a pre-logical sense of what "being one among everything" would mean here. The 天下 denotes those things which are not U, but which humans interact empirically. For example, after we Anglophones pack our bags into a car, we may say, "That's everything there!" before we close the trunk. However, that's an exaggeration. If it were everything, then it would be the car, too, which would be impossible to pack into its own trunk.
"Retire when your work is done. Such is Heaven's Way."-- Daodejing, 9:5 (trans. Lin Yutang)
U has so many more elements than any computably large set of elements would, and many of its elements are beyond our observation, yet we can comfortably use everything in plenty of contexts when stipulate all of the constraints for our given discourse. Laozi takes advantage of this feature, and he names domains according to their perceived immensity (or cardinality) to each other.
Laozi regularly refers to 天下 as the entire world, and his claim in Ch.25 is, as one would expect, that 道 is the "mother" (母) (but really, superset) of 天下.
"有物混成，先天地生。Here, Laozi is also admitting that 道 is just a stipulated set, just like U. From this, he considers that the "world" (天下) is a subclass of 道.
"There was Something undefined and yet complete in itself, born before Heaven-and-Earth.
[It is] silent and boundless, standing alone without change, yet pervading all without fail.
It may be regarded as the Mother of the world. I do not know its name; I style it 'Tao'; and, in the absence of a better word, call it 'The Great.'"-- Daodejing, 25:1~25:4 (trans. John C.H. Wu)
It is also vacuously true that U contains a "better" (and a "worse") state of being than human life. All of the things that we love or despise about ourselves or each other trace to some fact of some other things in U that are false for us. We get to flee, to fight, to feed, and to fornicate, but we're still fragile, finite, fearful, and fixated. Survival and some pleasure commits us to certain miseries which we could solve entirely by becoming like U is. If we are seeking to be "better" than we are, we are seeking to negate some present fact about ourselves (the part that is "worse"). However, that fact would already be true for some subset of U, so insofar as we make an evaluation of a situation, U already contains the "better" situation.
We cannot become U any more than a child can become its own parent, so our approach can't be one that tries to negate that which is human in us (because we would just switch from one subset of U to another). However, we can remain as humans are and a group of things greater than the set of all humans is. We can, too, consider those things whose traits are "better" than ours are and attempt to have those traits, while still remaining essentially human.
This ancient thinking relies on a pre-scientific stereotyping of individuals into general behavioral tendencies, and so relies on a very stern behavioral essentialism. Entities act differently, but generally still act in ways which define what they are.
The bigger question remains: Why would "retiring when the work is done" be any more like 天, and why would it be "better" than being merely human? Whenever an event in the sky happens, such as the rising and falling of the sun, or the coming and ending of a storm, they come and go exactly as their nature dictates. Most would agree that not overworking or overdoing things, wherever they draw the lines for themselves, is overall a better way of living.
It is important to remember that being "better" here, appeals to universal human preference. It does not presume its own moral "goodness." The supposition here is that the Daodejing would grant as tautologous something of this sort: "If something is good, we will seek it," which becomes a tautology if "being good" reduces to "being preferred." It's been my experience that generating a non-biased hierarchy of preferences for all of humanity is a daunting, but an epistemically and scientifically viable task (in part because sciences can tell us what essential features people have, while philosophy can only guess at them). Normative ethics, which must attempt to guess at human intuition from the armchair of already normative statements, is a failure at this. Laozi, as I mentioned, is not doing normative ethics. It would be much clearer to read him as if he were doing pre-scientific moral psychology.
However, something more cynical is relevant here, and these come from conclusions in Laozi's own inspection of the hegemonies of his time. People have a very peculiar tendency to reflect on themselves as active moral agents once they have the means to do so. Hunter-gatherers don't have time to engage in that kind of reflection, or at least not nearly as much time as first-world citizens have. We have no reason to assume that moral agency is essentially human, and viewing other, simpler cultures informs us of exactly how little is required to make us essentially human. For instance, primitive man didn't have what we might call "social causes." They weren't interested in campaigning or legislating for changes in social contracts, in bidding for hierarchies of power and distinguishing lords from subjects, or in earning the contrivances of social or economic class. Disputes and stakes were originally very small, especially compared to the post-Shang ages.
This, alone, is a challenge to Confucianism. If we're really going to appeal to the past or to tradition, then we should not stop at the time of Yao and Shun, but to the time when they and their ranks never existed. The point is that an appeal to such things is an error. It relies on the assumption that the future cannot ever be any better than the past had been, which is unfounded.
The best demonstration of this view in the text itself (and in my estimation, the best summary of the entire Daodejing's ethical import) comes from Ch.38:
"上德不德，是以有德；下德不失德，是以無德。Laozi gives some very clear reasons to retain our essential humanity and to discard things that are "superficial" (薄). For one, there are no such things as vanity, or political struggle, or inferiority complexes, or fear of punishment, or (Sartre's) "inauthenticity," or lures of deceived notions of "gain" in the essential human being, which is the human being in total isolation. They simply cannot arise, as they demand (to use Sartre again) "the Stare," those sentiments of social pressure that arise because others are attempting to use others as means to their ends. U contains only those things which can exist, but the pitfall of our mental fabrications is their innate susceptibility to being total nonsense -- contradictory propositions under a ludicrous model for organizing the world. If that is the case, we have no obvious reason to assume that the content of those fabrications is greater than the content of ∅, and if it isn't, then we can just as well abandon them because, either way, we're still retaining ∅ as a subset of ourselves essentially, but not distracting ourselves from taking on better characteristics, which we can gain from inspection of 道.
"True virtue is not virtuous. Therefore, it has virtue. Superficial virtue never fails to be virtuous. Therefore, it has no virtue.
True virtue does not "act" And has no intentions. Superficial virtue 'acts,' and always has intentions.
True jen [humanity] 'acts,' but has no intentions. True righteousness 'acts,' but has intentions.
True propriety 'acts,' and if you don't respond, they will roll up their sleeves and threaten you.
Thus, when the Tao is lost there is virtue.
When virtue is lost there is jen, when jen is lost there is Justice, and when Justice is lost there is propriety.
Now 'propriety' is the external appearance of loyalty and sincerity And the beginning of disorder.
Occult abilities are just flowers of the Tao, and the beginning of foolishness.
Therefore the Master dwells in the substantial, and not in the superficial.
[He] rests in the fruit and not in the flower, so let go of that and grasp this. "-- Daodejing, 38 (trans. Charles Muller)
Babies, for instance, have essentially human ends to serve, two of which are nourishment and companionship. However, Laozi recognizes that no hegemony enables such ends, but demonstrably enfeebles them -- for instance, in the recruitment of soldiers, in the levying of taxes, in the impositions of law against one's basic loyalties and impulses, etc. Case in point: Almost everywhere where there is a common religious or state law, suicide is illegal! But what punishments can the state or religion impose on those who complete the crime? And if you save them, haven't you only done so just to punish them in accordance with a trumped-up law or to compel them to submit once more to the very world that makes them seek their own deaths? Vanity! Straight, hegemonic vanity!
Though I am a Yangist, I do side with Laozi on these basic arguments. Only stern arrogance could attempt to reduce humanity to its social roles or political agendas. To believe that the solution to human suffering or the means to better living lies in the submission to even more ad hoc normative guesswork, regardless of its origin, is fruitless, especially when reliable methods for determining the essential nature of humanity exist and people could use that empirical knowledge to enable the satisfaction of human preferences adequately. The best laws of governance will read like they are laws of physics.
"All the world says that my Tao is great, but seems queer, like nothing on earth.
But it is just because my Tao is great that it is [so queer] like nothing on earth!
If it were like anything on earth, how small it would have been from the very beginning!"-- Daodejing, 67:1~67:3 (trans. John C.H. Wu)