The only independent system of native Chinese philosophy which ever seriously disputed the supremacy of Confucianism is Taoism. The founder of this system was Lao-tse, an older contemporary of Confucius, of whom almost nothing credible is related except that he filled the post of librarian, or keeper of the archives, at the court of Chou.
An anecdote narrated by the historian Szĕ-ma Ts'ien relates that Confucius, on his visit to the court of Chou at Loh-yang, tried to get some information about ancient usages from the aged keeper of the archives, and got instead a pointed rebuke of his antiquarian curiosity about men whose bones had long since mouldered to dust, of his lofty airs, his extravagant aims, and his multifarious activities. The interview made such an impression on Confucius that he compared Lao-tse to the dragon, whose mysterious flight through the sky on wind and cloud baffles comprehension. The story, which evidently comes from a Taoist source, is historically worthless; but it expresses well enough the bewildering effect of the teachings of Lao-tse on the Confucian mind. "The adherents of Lao-tse reject the school of K'ung-tse ( Confucius), and the adherents of K'ung-tse reject Lao-tse. At variance in fundamental principles, they cannot agree."
To Lao-tse is attributed the Tao-teh-king, which holds the place of authority among the Taoist books. The legend of its origin is that as Lao-tse was abandoning the sinking state of Chou, the warden of the frontier pass persuaded him before his departure to commit his principles to writing. This he did in a compass of little more than five thousand words, and, leaving the book with the keeper, wandered on and disappeared from mortal ken. Some critics have not only rejected this story, but have denied that the Tao-teh-king is the work of Lao-tse at all, though it may contain some savings of his preserved by oral tradition. More conservative scholars regard the book as substantially embodying the teachings of Lao-tse, perhaps set down by a disciple rather than by the master himself, and not without interpolations by later hands.
The Tao-teh-king consists of two parts, entitled respectively Tao and Teh, and has been divided by commentators into eighty-one short chapters. The first part is predominatingly metaphysical, the second ethical and political; but no logical plan is followed. The book is very obscure, in consequence partly of extreme conciseness, but still more because the author is struggling to express ideas for which the language provided no terms--ideas, moreover, of a kind for which words are at best an inadequate vehicle.
The fundamental problem of interpretation confronts the translator in the very title of the book. Tao is literally 'way'; then, like corresponding words in many languages, 'course, method, order, norm.' In the Confucian literature the word is used of "the way of Heaven," especially in its dealing with men, the moral order of the world, which is manifest also in the physical order. It is used also of the right way of human life, the way which Heaven approves, the path of reason, of principle, of truth. Finally it denotes the rational and moral principle by which conduct is guided.