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# Town Country Dependency

# Definition

The fundamental economic relationship where towns cannot exist without the subsistence and raw materials supplied by rural areas, while rural areas depend on towns for manufactured goods and markets for surplus produce. This mutual dependency creates the basis for commercial exchange and the division of labour that characterizes civilized society.

## Source Chapter

Book III, Chapter 1

## Context

Smith presents this dependency as the essential foundation of economic development, explaining why towns must maintain commercial relationships with surrounding agricultural regions and how this relationship creates the conditions for specialization and productivity improvements.

## Economic Domain

Exchange

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