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# Capital Accumulation

## Definition

The process by which savings from revenue are added to capital stock, enabling
the employment of additional productive labour. Capital grows through
parsimony when individuals save part of their revenue and either employ it
themselves in maintaining productive hands or lend it to others, creating a
perpetual fund for maintaining productive labour across time.

## Source Chapter

Book II, Chapter 3

## Context

The chapter's primary focus, explaining how individual saving behavior
accumulates into national capital growth. Smith argues that parsimony, not
industry, is the immediate cause of capital increase, and that this process
determines whether a nation tends toward industry or idleness.

## Economic Domain

Accumulation

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