Lao-Tse is considered the first philosopher of the Taoist school. The Te-Tao Ching, attributed to Lao-Tse, is one of the most sacred texts of Taoism. His writings teach the philosophy of the Tao, or the Way, which is reality that naturally exists prior to and gives rise to all other things such as the physical universe and all things in it. Te, which means virtue, is the life energy in things and a sense of morality which constitutes the Way. The Tao can be found by experiencing the oneness in all things – fulfilling life as one with nature and as one with the inner self. The speaking of Lao-Tse’s wisdom is what attracts people to follow him and make him the teacher of Taoism.
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Eighty percent of Lao-Tse’s teachings are devoted to man’s function and his role in society by means of virtue. He finds courage, generosity, and leadership to be three virtues involved in all ethical systems. However, he wants the truly virtuous man to spontaneously do good out of what he genuinely feels without being aware and concerned of other people’s approval. He believes people should “act without acting” by spontaneously saying and doing what is genuinely felt rather than putting on a show for others. This is to avoid hypocrisy, the result of people acting in ways they think others will approve of and value.
From the Taoist point of view, Confucian virtues of humanity, righteousness, knowledge, and wisdom are seen as bridges to hypocrisy. This is because these virtues make distinctions between right and wrong, a concept which is absent and unnecessary in Taoism. In further comparison with the teachings of Confucius, Lao-Tse emphasizes peace of mind and tranquility of the spirit, whereas Confucius emphasizes moral perfection and social adjustment. In addition, Lao-Tse nourishes a person’s nature, while Confucius fully develops it. Therefore, Confucius hopes for his followers to become one with heaven, and Lao-Tse opens himself to become one with the nature of the universe. However, both teachers share a common interest to avoid extremes and to live by the Golden Rule.
Moreover, Lao-Tse stresses how important it is to be one with nature because it provides positive character. He regards genuineness, sincerity, and spontaneity to be “natural” characteristics which people are born with and possess. Yet, he claims these qualities are destroyed through education and cultural influences. In addition, he explains how a person is able to dismiss all authority except for the authority of self and a personal God. In this case, God is understood to be everything in nature. Thus, people who know and respect the authority of their inner nature know where they belong.
Consequently, Lao-Tse longs for life to take place in a small, united community where deceit, selfishness, and evil are non-existent in order to pursue a life of single and simple community. He glorifies simplicity by encouraging people to live without desires, knowledge, competition, and things of the senses. Therefore, he also teaches how to live the simple life, the one which is free from cunning and cleverness and not devoted to the pursuit of profit. As a result, Lao-Tse opens himself up to the universe and demonstrates how to live a life full of the beauty of nature, which allows people to follow in his path and take his teachings to heart.
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Sources:

Allen, George, Tao Te Ching (London, England; Ruskin House, 1959)
Chan, Wing-Tsit, The Way of Lao Tzu (New York; The Bobbs Merrill Company, 1963)
Day, John, The Way of Life (New York; The John Day Company, 1944)
Lao-Tse, Te-Tao Ching (New York; Random House, Inc., 1989)
Murray, John, The Sayings of Lao-Tzu , (London, England; Hazell Watson and Viney Ltd., 1905)