This article compares Laozi’s political thought with that of Hegel’s. The comparison will be conducted on four different levels: the relation between metaphysical and practical levels of their respective thinking, individual consciousness and freedom, private property, civil society, ethics and the existence of the state. It concludes with the following points: first, beyond their obvious differences, it is shown that Laozi and Hegel share a similar, although reversed, hierarchical deduction of freedom: one from the ruler to the people, the other from individuals to the state. Both are, however, aware of the ethical limits to freedom. Second, both share a similar concern about unequal distribution of wealth, luxury, squandering, jealousy and the danger of political chaos these might entail. As solutions, Laozi advocates for the simplicity of the ruler’s life and political practice, while Hegel talks about the ethical duty of the intermediate class between the ruler and the ruled. Third, in terms of their views about society, or Hegel’s “civil society,” both recognize that ethics is the pillar for the state, and they share the idea of an ethical state, although the role played by ethics is different. Finally, as far as the reason for the existence of the state is concerned, they share comparable, although reversed, views about the relation between ethics and the state. While Laozi believes that the people will become ethical when the state adheres to non-action, Hegel argues that the existence of the state is the highest expression of freedom, reason and the ethical consciousness of society.