Chapter three takes the previous chapter's argument about opposites and turns it into policy, and the result is the book's first political statement.
Do not exalt the worthy and the people will not compete. Do not prize goods that are hard to get and the people will not steal. Do not display what is desirable and hearts will not be disturbed. Each sentence names an intervention and identifies it as the cause of the behaviour it is meant to correct. Competition is not a defect of human nature that ranking discovers; ranking produces it. Theft is not prior to the valuing of rare goods.
The recommendation that follows is subtraction. Empty minds and fill bellies; weaken ambitions and strengthen bones; keep people free of contrivance and craving, and see that the clever do not dare to act. Then act without acting, and nothing goes ungoverned.
Read against the political thought of the period the position is distinctive. The competing schools proposed to improve the world by cultivating virtue, by clarifying ritual, or by tightening law and punishment. This chapter says all three make things worse, because each works by holding up a standard, and a standard is exactly the machinery that generates the behaviour it condemns. Whether that is a serious political proposal or a critique that declines to offer one has been argued over for two thousand years.