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The first sentence reads literally, "Under the heavens [i. e., all over the world, or everywhere] all know [i. e., it is obvious], if beauty acts beauty it is only ugliness." The verb "acts" is to be taken in the same sense as it is used in English, viz., "making a display or show of."
We deem our present rendering an improvement on our former version.
According to a notion of the early Christians the devil would like to play the part of God, as Tertullian says, Satanas affectat sacramenta Dei. On Lao-tze's theory the nature of the devil consists exactly in the attempt of acting the part of God.
The close interrelation of goodness with badness and of beauty with ugliness suggests the quotation on opposites. It sets forth the coexistence of contrasts, and their mutual dependence is more obvious to the Chinese than to other nations, because in their word-combinations they use compounds of contrasts to denote what is common in both. Thus a combination of the words "to be" and "not to be" means the struggle for life, or the bread question; "the high and the low" means altitude; "much and little" means quantity, etc. But what originally seems to have been the trivial observation of a grammar-school teacher acquires a philosophical meaning when commented upon by Lao-tze.