Neglecting to praise the worthy deters people from emulating them; just as not prizing rare treasures deters a man from becoming a thief;
or ignoring the things which awaken desire keeps the heart at rest
Therefore the wise ruler does not suggest unnecessary things, but seeks to satisfy the minds of his people. He seeks to allay appetites but strengthen bones. He ever tries by keeping people in ignorance to keep them satisfied and those who have knowledge he restrains from evil. If he, himself, practices restraint then everything is in quietness.
Interpretation:
Legend has it that the Tao te Ching was written at the request of the Emperor. Whether this is true or not, it is undeniable that the text refers frequently to the issue of ruling a body of people. Chapter 3 carries on the idea of Chapter 2 for two stanzas then discusses how to apply this knowledge in the rule of humans.
Having realized that praise and disgrace breed each other, laozi now suggests that a good ruler should not praise the effective, nor should you display desirable things. This is understood if you consider the desire to own an automobile. Before 1890 only a few very imaginative individuals had ever desired to have a car. The concept simply did not exist. Now there is great desire and suffering over the availability and desirable qualities of various cars. If no on had ever suggested to people that it was possible to have motorized transport this desire would never have developed. In the mind of the author, life is better if the people are given what they need but not taught to desire more than that.
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