Taoists: The World’s First Libertarians

By Steven Clyde

Murray Rothbard gave us some of the most profound insights in history, economics, sociology, etc., yet if you get to a point where you feel like he’s taught you everything you could possibly know, he surprises you once more. We often wonder where the roots of our libertarian philosophy come from, and not just from the perspective of the more recent centuries, but in regard to the progression of philosophical thought which led to the creation of economics.

While modern libertarianism was certainly founded in Murray’s living room, there is a lot more to the story.

In Economic Thought Before Adam Smith: Vol 1, a clear and concise analysis is given on the development of economic thought, in which most of the initial philosophical insights that led to the development of Western civilization over time came from the ancient cities of Greece.

There was the poet Hesiod[1] who gave us some of the first insights into scarcity and how this relates to the plight of man. Democritus (c.460-c.370 BC)[2], who gave us the idea of subjective value theory and was  in favor of private property over communal property, noted that:

‘The same thing may be good and true for all men, but the pleasant differs from one and another’ . [3]


Plato (c.428-c.374 BC) had many statist tendencies which he outlined in The Republic and The Laws, which described his idea of a Greek polis (city) where philosophers and soldiers would rule over the labourers, peasants, and merchants. Somehow, Plato still managed to understand the role of the division of labor, despite the fact that he wanted a static economy with little to no innovation. Xenophon (430-354 BC), a follower of Plato, still managed to distinguish that in large cities people were often able to get by on a single trade, while those living in smaller towns relied on being a “jack of all trades” to get by; this showed his consciousness of supply and demand, which Plato lacked with his ideas of communalism.


Aristotle (384-322), a great proponent of private property, disagreed with his teacher Plato on the idea of communal property. Instead he argued that private property is interwoven into our human nature and therefore gives us the ability to act morally and compassionately, versus being coerced. Though he was not in favor of limiting a person’s private property per se, he stressed the idea of reciprocity in any exchange. To him, it was unjust for any person to get the short end of the stick in a transaction, which led to his overall confusion on money (e.g. Shoes traded for a house must be based on a builder to shoemaker ratio). Later libertarian theorists like Rothbard corrected this idea, because in order for an exchange to take place at all, one must value their current possession less than what they’re receiving in return. It wouldn’t make sense to trade $5, for $5, yet Aristotle’s contradiction went unnoticed for centuries to come.


Cicero (106-43 BC) a famous Roman statesmen, jurist, and orator, contributed heavily to the idea of Stoic natural law doctrines which “heavily influenced the Roman jurists of the second and third centuries AD” according to Rothbard.

With much of this being common knowledge regarding the ancient philosophers of Greece, there is still a piece of history that is worth mentioning.

Taoism: The Lost Chapter

Taoism, also known as Daoism, was a lost chapter of libertarian thought as far as Rothbard was concerned, and the reason was that the philosophical influence was felt only within the confines of ancient China. There were three main schools of thought in ancient China: Legalists, Confucians, and Taoists.

Legalists wanted to maximize state functions, while Confucians, coming from the school of thought of Confucius (551-479 BC), had a less oppressive vision of the law and rulers, but nonetheless leaned toward the need for governance from philosophers.


Taoists, however, were who Rothbard would call the “world’s first libertarians”. They believed in virtually no interference by the state in the economy or in society. Lao-Tzu (c.604-531 BC), also known as Laozi, was a personal friend of Confucius’s and was the founder of Taoism. He believed that an individual’s happiness was the source of societies prosperity and that rulers simply interfered. The government to him, with “its laws and regulations more numerous than the hairs of an ox’, was “more to be feared than fierce tigers’. [4]

Lao-Tzu was not arrogant regarding his distrust of government; he was very clear regarding the effects of war and taxation. “The people hunger because their superiors consume an excess in taxation” and “where armies have been stationed, thorns and brambles grow. After a great war, harsh years of famine are sure to follow.’

Lao Tse

Not only that, but people left to their own devices tend to procure their own needs in life:

“I take no action yet the people transform themselves, I favor quiescence and the people right themselves, I take no action and the people enrich themselves.’[5]

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Chuang Tzu (369-c.286 BC), another Taoist and a follow of Lao-Tzu, was the “first anarchist in the history of human thought” wrote Rothbard.  He was a descendant of state of Meng and  wrote parables that gained him fame throughout the country. King Wei of the Ch’u kingdom offered Tzu a position as the chief minister of state, which he mockingly rejected:

“A thousand ounces of gold is indeed a great reward, and the office of chief minister is truly an elevated position. But have you, sir, not seen the sacrificial ox awaiting the sacrifices at the royal shrine of state? It is well cared for and fed for a few years, caparisoned with rich brocades, so that it will be ready to be led into the Great Temple. At this moment, even though it was gladly change placed with any solitary pig, can it do so? So, quick and be off with you! Don’t sully me. I would rather roam and idle about in a muddy ditch, at my own amusement, than to be put under the restraints that the ruler would impose. I will never take any official service, and thereby I will [be free] to satisfy my own purposes.’[6]

Chuang Tzu

Among the hilarity of his attitude, he was far ahead of his time in philosophical thought. Take for example his understanding of the idea of spontaneous order and the invisible hand when he said “Good order results spontaneously when things are let alone.’[7]

The restrictions of government, as he saw it, were completely unnecessary. The world ‘does simply not need governing; in fact it should not be governed.’[8]

Pao Ching-yen (405-466 AD) was heavily influenced by these early thinkers. He reflected on the days when:

“there were no rulers and no officials. [People] dug wells and drank, tilled fields and ate. When the sun rose, they went to work; and when it set, they rested. Placidly going their ways with no encumbrances, they grandly achieved their own fulfillment.’[9]

 To Pao, the problem was government itself. What else can a government do to its citizens, other than ‘make them toil without rest and wrest away things from them endlessly’. The situation at hand to him was obvious:

“All these things are brought about because there are rulers.’[10]

Lastly, Ssu-ma Ch’ien (145-C.90 BC) gave some important insights on the relationship between minimal government and the abundance of goods. He, like many old philosophers, recognized the division of labor and the function it plays in society:

“Each man has only to be left to utilize his own abilities and exert his strength to obtain what he wishes… When each person works away at his own occupation and delights in his own business, then like water flowing downward, goods will naturally flow ceaselessly day and night without being summoned, and the people will produce commodities without having been asked.’[11]

Ssu-ma Ch’ien

Among his other contributions, Ch’ien was aware of the functions of trade on the market and incentives regarding trade, because a good trader keeps a ‘sharp eye out for the opportunities of the times’.[12]  Ch’ien noted that increased the quantity of money and lowering the quality of coins by the government decreases its value, and causes long term harm; he was quite the “monetary theorist” of his day, if such a thing existed.

These great thinkers were all way ahead of their time with their courageous ideas regarding individual anarchism, and the importance of freedom to instill peace and prosperity in societies.


[1] Rothbard called him the “first economist”, for recognizing scarcity in the real world versus in a utopian vision such as in the Garden of Eve where there is no scarcity

[2] He also was the father of “atomism”: the idea that everything in the universe is made up of much smaller particles called atoms

[3] Murray Rothbard, Economic thought before Adam Smith. Vol. 1. Aldershot: Elgar, 1995., 10.

[4] Ibid., p. 23.

[5] Ibid., p. 24.

[6] Ibid., p. 24.

[7] Ibid., p. 25.

[8] Ibid., p. 25.

[9] Ibid., p. 25.

[10] Ibid., p. 26.

[11] Ibid., p. 27.

[12] Ibid., p. 27.

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