To use this finger to show how a finger is not a finger is no match for using not-this-finger to show how a finger is not a finger. To use this horse to show that a horse is not a horse is no match for using not-this-horse to show that a horse is not a horse. Heaven and earth are one finger. All things are one horse.This point in Zhuangzi's argument for the equality of theories is one of the most difficult for me to grasp. This is, in part, because it is an allusion to another argument, that of the 'logician' Gongsun Long, which is already difficult to understand. According to Dr. Ziporyn (I think), Gongsun wished to show how indicating ("fingering") a "this" turns it into a "that", and thus one can never actually indicate a "this". Every "this" is also necessarily a "that".
(Zhuangzi, 2:19; Ziporyn)
The 'logicians' used words to negate the obvious (“A white horse is not a horse.”); Zhuangzi suggested the use of the obvious to negate words. In the negation of words is the realization of the relative equality of all words, of every point of view.
Instead of showing how one cannot understand "this finger" in words, Zhuangzi suggests that one look at it from the point of view of another finger. Qian Mu (1895-1990) puts it thus: "This means to stand in my position to understand that he is not me is not as good as standing in his position to understand that I am not him." When we are able to understand how every point of view is rooted in a subjective perspective, we are able to equalize ours with every other. Shi Deqing (1546-1623) comments: "By switching places like this to view the matter, there is no duality between fingers or horses, and thus right and wrong naturally disappear."
"Heaven and earth are one finger" because this finger and that finger, though apparently different, are essentially the same in their subjectivity. Their subjectivity "connects to form a oneness".
Whether we follow these arguments or not, their conclusions are understandable. "Right and wrong appear," Lin Xiyi (1193-?) explains, "only as a result of "self" verses "other". But if heaven and earth cannot be established [being "one finger"], can there be any division between self and other?" We are, in fact, individuated beings, but our differences lead us to understand how we are the same. You are to yourself as I am to myself. To accept and affirm you is to accept and affirm myself.
In closing, it might be helpful to note that "right and wrong" in this context refers to points of view, not moral behavior, although these judgments also become subject to a similar critique.
You can check out Scott's writings on Zhuangzi here.