This is the point of view of morality. The proverb, however, recommends honesty not as a moral ideal, but as a practical policy. We are called upon to be honest, not because it is moral to be so, but because it is profitable to be so.
From one point of view, it is indeed true that honesty is the best policy. Consider, for example, a shopkeeper who, in order to get easy and quick profits, sells things at higher prices and cheats his customers in other ways. He may seem to prosper for some time, but, sooner or later, his customers are bound to see through his tricks and cease to patronize him.
On the other hand, an honest shopkeeper is likely to flourish gradually and steadily, attracting more and more customers because of his reputation for honesty. It is true that several black marketers and their like have amassed huge fortunes. But they have to spend large chunks of their illicit gains on trying to prevent the detection of their crimes. Besides, they live in constant dread of being found out. It is generally true that dishonesty creates more problems than it solves.
'Honesty is the best policy' is a national proverb of the British. It reflects their practical character. The British are nothing if not practical, and this quality enabled them to found a far-flung empire. In the colonies which they ruled they tried to be as honest and trustworthy as possible; at least they succeeded in creating this image of themselves in the minds of many people. If the British as a nation are affluent and influential today, it is in no small measure due to the fact that they try to live up to their national proverb.