Chapter 2 of the Daodejing features the first mention of the term 聖人/shéngrén, which I have translated as sage. Unlike Confucius, Laozi did not regard a sage as a shining beacon of morality. He saw him as a man of inaction with the unique ability to get things done without unnecessary interference.
The final section of the chapter describes how the sage operates quietly in the background, conducting his affairs with effortless action and practicing teaching without words. Rather than forcing events to happen, he lets them emerge and develop of their own accord. Instead of attempting to assert authority over others and receive rewards for his achievements, he enables everyone else around him to flourish like the hub at the centre of a wheel.
Laozi almost seems to go out of his way to portray the sage as a man of mystery, who is hidden in plain sight on the fringes of society concealing his wisdom underneath a shabby sackcloth. Because nobody notices him, the sage can see everything that is happening. Without any friends to impress or receive favours from, he can view all the action dispassionately and discern the patterns with great clarity.
In Chapter 15, Laozi goes on to describe the sages of antiquity as “subtle, clever, mysterious, and perceptive.” Even though he admits that he finds their thoughts “too profound to be understood,” Laozi paints a vivid portrait of their patience, humility, and sensitivity:
Cautious as if crossing a river in winter,
Alert as if aware of danger from all sides,
Dignified like a guest,
Yielding like a melting block of ice,
Simple like an uncarved block of wood,
Open-minded like a valley,
Opaque like muddy water.
By remaining detached from the world, the sage is more closely connected to it than anyone else. He operates inconspicuously with minimal effort, allowing events to unfold naturally and ensuring the wellbeing of all without seeking personal gain or glory.