Leibniz (1646-1716) declared this to be "the best of all possible worlds" on the basis of his rationalist philosophy. I won't pretend to be able to follow his logic, nor to find this conclusion palatable — how could anyone with a morsel of compassion do so? Nevertheless, there is some truth in it.
In his adaptation of a portion of Zhuangzi, Chapter 2, Mitchell (The Second Book of the Tao) addresses this insight from the point of view of the Daoist sage:
She makes distinctionsThe world is a mess. If we care about human suffering and the suffering of the planet and all its denizens, this seems clearly the case. This is a valid and morally necessary "distinction". Yet the sage, having made this observation, "does not take it seriously". Why? Because her most essential reference is not to the messy bits, but to the Whole. The view from Dao enables her to both care and not-care, because that view lies beyond the distinctions of right and wrong, good and bad. All is well.
but doesn't take them seriously.
She sees the world constantly breaking
apart, and stays centered in the whole.
She sees the world endlessly changing
and never wants it to be
different from what is.
The sage "never wants it to be different from what is." Can you feel this as a slap in the face? If so, you are getting a sense of its transformative power. This view is incompatible with “the normal human inclinations”. 'Surrender' is the response that comes to my mind when confronted with this seemingly inhumane point of view. Synonyms are 'letting go', 'acceptance', and 'trust'. ‘No-self’ is here both the facilitator and the result.
Mitchell brings it home to ground zero when he comments: "The mind at peace with itself needs only what it has, wants only what it is." What is true of the sage's acceptance of the world's mess applies equally to her own. This is how she rides the dragon in freedom. Is this denial? Not at all. What's to deny when no distinctions are made? Making distinctions does not enable one to be free of distinctions. One does not transcend good and bad by eliminating the bad.
This is not "the best" of all worlds because, for the sage, superlatives have no more force than the comparatives upon which they depend. It is simply the world that is. And for the Daoist, all things are acceptable simply by virtue of being as they are, for all things are equally expressions of the unfolding Dao.
With that established, we can roll up our sleeves, and work to make things "better".
You can check out Scott's writings on Zhuangzi here.