The short article, Occult Universe, presents the basic patterns of belief current in China from the third millenium BC. It introduces the Book of Changes , which was as influential in the development of Confucianism as it was in much Daoist doctrine. Yet whereas Confucius expanded this book's social implications, Daoism elaborated on its metaphysical claim – to understand the invariable laws controlling the process of change in the universe. Lao Zi, who founded the Daoist movement with his work, Dao De Jing (Power and Principle), writes, "to know the invariable is enlightenment."

Lao Zi's Ideas

Lao Zi believed that in order to understand Dao – the mystical, all-encompassing power governing the universe – each individual should, through contemplation, master the invariable laws that cause and enforce the processes of change. Realising this ambition is no easy matter however – first, the individual should prepare to receive enlightenment. This requires the observation of "non-action" and the un-learning of all superficial knowledge. Only after rediscovering his/her inner essence can an individual understand and unite with Dao .

1) Detecting the invariable

In the Dao De Jing , Lao Zi sets down the principles of the invariable laws that he has discovered. The most important of these is that "reversal is the movement of Dao ", as introduced above (see "The theory of Yin and Yang" in Occult Universe). Lao Zi writes that since change always moves "to fill the empty or empty the full", to achieve something you should therefore first admit its opposite, i.e. if you wish to be happy, you should first seek to be sad. Secondly, he asserts that change always moves in the direction of the least resistance towards what is simplest and easiest. Thirdly, and controversially, he claims that all forms of Progress create dissension and unhappiness rather than harmony and improvement. He is adamant that if an individual wishes to understand Dao, s/he must first un-learn the spurious knowledge of the supposedly advanced world. The path to understanding Dao begins with the discovery of one's inner essence through "non-action".

2) Practising Non-action

Non-action occurs when a person or thing acts in natural and spontaneous concordance with its inner principle or De ; it is the opposite of all that is arbitrary, learned and artificial. Lao Zi insists that people have lost their essence precisely because they have developed too many desires and too much knowledge. As a result they cannot observe how Dao , the universal invariable power, affects the De or universal principle in all things. Only by reducing their lives to the simplicity of the Dao , can people begin to understand these forces. Thus in the second verse Lao Zi writes, "The Man of Calling. dwells in effectiveness without action. He practices teaching without talking. All beings emerge and he does not refuse himself to them. He generates and yet possesses nothing. He is effective and keeps nothing."

3) Defining Dao

Although it is possible to communicate the purpose of understanding Dao , it is impossible to define Dao itself. This is because Lao Zi, like the Chinese Buddhists, believes that language cannot contain nor express the unearthly experience of Dao . As a result he, like the Chinese Buddhists, only ever describes it through allusions. To give some indication of Dao , we shall quote the famous, introductory verse of Lao Zi's Dao De Jing .

"The Dao that can be expressed is not the eternal Dao . 
The name that can be named is not the eternal name. 
"Non-existence" I call the beginning of Heaven and Earth. 
"Existence" I call the mother of individual beings. 
Therefore does the direction towards non-existence lead to the sight of the miraculous essence, 
the direction towards existence to the sight of spatial limitations. 
Both are one in origin and different only in name. 
In its unity it is called the secret. 
The secret's still deeper secret is the gateway through which all miracles emerge."

4) Conflict with Confucianism

Whereas Confucius wanted to improve the morality of a progressive society, Lao Zi aimed to enlighten the individual through a regressive ideology. As a result their two philosophies came into conflict.

Since Lao Zi conceived of the Dao above all distinctions of good and evil, he concluded that the Confucian values of human-heartedness and righteousness denigrated these higher principles. Consequently he writes:

"When the Dao is lost, there is the De . 
When the De is lost, there is the virtue of human-heartedness. 
When human-heartedness is lost there is the virtue of righteousness. 
When righteousness is lost, there are the ceremonials. 
These are the degeneration of loyalty and good faith and the beginning of Disorder."

This represents the philosophical conflict between Daoism and Confucianism. The two philosophers also disagreed on the role of government. Whereas Confucius supported a progressive Emperor, Lao Zi called on the Emperor to limit government and un-do the effects of civilisation.

It could be argued that Lao Zi's quasi-anarchistic approach might be appropriate for some individuals, but that it is not a profitable pursuit for society at large. However, a later philosopher, Chuang Zi, elaborated Lao Zi's concepts. By using esoteric paradoxes and elusive riddles, Chuang Zi displayed the logical contradictions at play in daily life and language, and thereby succeeded in justifying the possible role of Daoism for everyday society.

Chuang Zi's Ideas

Chuang Zi's most significant contribution was in the identification of relative and absolute happiness.

1) Relative happiness:

Chuang Zi argues for a happy world. He claims that happiness does not conform to any absolute uniformity, but that people are happy, according to their natures ( De ), to different extents. It is a natural law, he says, that people will find their own levels of happiness if they are left to freely express their natural ability. Therefore, to create a society of relative happiness uniformity should be abolished in political and social philosophy. When people are allowed to fully express their natural ability, Chuang Zi claims, there is no need for government, since it is a law of nature that people will be able to find their own levels of relative happiness. Government's role, therefore, should be limited to allowing people to fully express their natural ability.

2) Absolute happiness:

This was reserved for those select individuals, who by transcending the ordinary distinction of things, could melt into life's infinitely changing process. Such a person does not analyse and discriminate between issues. When confronted by opposites this sage sees dynamic partners (Yin and Yang) in a process of ever-fluctuating change. He or she therefore combines contradictions into a unified whole. The sage loses her sense of self and thereby identifies with the infinite. This is absolute happiness. "If we attain this unity and identify ourselves with it," writes Chuang Zi, "then the members of our body are but so much dust and dirt, while life and death, end and beginning, are but as the succession of day and night, which cannot disturb our inner peace. How much less shall we be troubled by worldly gain and loss, good luck and bad luck!"

Unlike Confucianism, which is primarily a social philosphy, Daoism addresses metaphysical problems. It is a philosophy, indigenous to China, that seeks to explain the origins and processes of the universe.