I was naturally inclined to parsimony long before I became acquainted with Taoism. The ideas of Lao-Tzu, Chuang-Tzu, and Yang-Tzu have only given me extra arguments to stick to a simple lifestyle; they have supplied philosophical justifications for a mentality that I had already adopted.

The Tao Te Ching calls for parsimony in actions, processes, and plans. It employs a wide-ranging definition of parsimony. I especially love the warning in Chapter 29 of the Tao Te Ching against unnecessary excesses.

However, Taoists do not regard poverty as a virtue nor self-sacrifice as a moral commandment. Their choice for parsimony is purely functional. It is a tool for increasing our effectiveness in achieving worthy goals, not a gratuitous renunciation to the world’s pleasures.

Lao-Tzu presents parsimony as a tool for moving forward at a higher speed; each of us should set our own goals in life and work steadily to achieve them, but our achievement will be far greater if we use our resources wisely.

Parsimony is about exercising judgement and separating the important from the trivial. It does not entail adopting a miser’s mentality and denying oneself every pleasure. On the contrary, Taoists view parsimony as a method of building a more secure and prosperous future.

A means to an end

The biographers of entrepreneurs often describe their heroes as extremely frugal, at least during the period when they’re still building up their companies. Many of those individuals can be categorized as archetypes of parsimony.

Even a stock market speculator like Jay Gould (1836-1892) had begun his career quite modestly, working as a bookkeeper and land surveyor. For today’s standards, his lifestyle appears, in his youth, as extraordinarily frugal. Gould only became a big spender after he had already made a fortune.

Like entrepreneurs, Taoist regard parsimony as a means to an end, not as a goal in itself. Lao-Tzu warned his disciples against useless work and expenditures because he did not want them to waste their resources; he wanted them to use their time and energy wisely.

For Taoists, parsimony does not mean immobility, poverty, or renunciation. It simply means doing what needs to be done, not more and not less. If we do more, we will waste our energy and other resources. If we do less, we’ll fail to achieve our goal and all our efforts will have been in vain.

Chapter 29 of the Tao Te Ching doesn’t tell us to do nothing and hope for the best. Taoism doesn’t favour spiritual paralysis, blind faith, and groundless optimism. Instead, Chapter 26 tells us to do what needs to be done, avoiding to do too much or too little.

No more and no less

Lao-Tzu reminds us that, in order to achieve our goals, the situation might demand quick, vigorous, bold action, but that’s not an universal rule. Other situations may call for a cautious, slow, safe approach.

Both schemes, the fast and the slow, the bold and the safe, the vigorous and the cautious, fall within the Taoist conception of parsimony. It’s all about doing things thoughtfully and with measurement, without doing more or less than necessary.

Few entrepreneurs are Taoists, but many view parsimony as beneficial. It enables them to free up their resources for crucial activities. When a situation calls for large expenditures, they’ll be willing and able to go ahead.

Their parsimony has enabled them to accumulate resources and create a financial cushion for surviving setbacks or seizing unplanned investment opportunities.

If those entrepreneurs had read the works of Chuang-Tzu, Yang-Tzu, and Lao-Tzu, they would have arrived at the same conclusion: that it’s as wasteful to do too much as it is to do too little.

Alertness and thoughtfulness

Parsimony relies on alertness and thoughtfulness. It is about getting things done effectively, not about becoming a miser. In the Tao Te Ching, the warnings against doing too much and overextending ourselves are balanced by the warnings against excessive fear and risk avoidance.

I recall for instance the Taoist story about a father, who was fearful about his son’s future. He wanted to secure a prosperous career for his son at any cost. Inspired by his fear, the father professed an extreme form of risk avoidance.

Eventually, he met a functionary appointed by the emperor to collect the toll at a bridge. The functionary seemed to enjoy a secure income without having to exert himself in excess. His job offered the stability that the father wanted for his son.

“Toll collector would be the perfect job for my son,” he told himself. “I will ask the functionary about the requirements for this job.”

The toll collector was happy to reply to the father’s question but the answer came as a surprise. “I got this job because I am an invalid,” explained the toll collector. “The emperor gave me this job because I had lost my feet in an accident.”

The functionary lifted his uniform, and showed that he indeed had no feet. Nonetheless, the father was delighted with the idea of his son becoming a toll collector.

When the father arrived home, he called his son and asked him to bring an axe. Unsuspecting, the son did so and handed the axe to his father, who then cut off the son’s feet. In his eyes, he was doing the right thing, even if his behaviour was foolish by a rational standard.

Parsimony prevents foolish behaviour precisely because it is geared to long-term objectives. Without a solid justification, Taoists won’t throw away good opportunities or refuse to enjoy themselves in the present. Their parsimony is a calculated step to achieve a greater good in the future.

If you are interested in putting rational ideas into practice in all sorts of situations, I recommend my book “Against all odds: How to achieve great victories in desperate times.”