Verse 17 arranges rulers in descending order. In the highest antiquity, people did not even know their rulers were there — the sage king governed so lightly that life seemed entirely self-directed. In the next age, rulers were loved and praised. Then came rulers who were feared. Finally, rulers who were despised. The progression is a story of increasing intervention: as rulers trust their subjects less and impose themselves more, the quality of governance degrades.
Verse 18 extends the analysis: when the Great Tao ceased to be observed, benevolence and righteousness came into vogue. This is a devastating critique. Explicit moralising — the public promotion of virtues like benevolence, filial piety, and loyalty — is for Laozi a symptom of social breakdown, not its cure. The very fact that we need to proclaim these values means they have already been lost. A society in which the Tao prevails has no need of moral campaigns.
Laozi's ideal polity is sketched in verse 80: a small state with a small population, where people are content, do not travel far, and live out their days in simplicity. This is not a failure of ambition but an achievement of sufficiency — the recognition that the desire for expansion, conquest, and dominion is itself a form of the restlessness the Tao cures. The sage king does not manage people; he removes the obstacles to their natural self-governance.
Verse 17 of the Tao Te Ching (James Legge translation, 1891). The theme of minimal governance recurs in verses 3, 57, 60, and 80.