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# Declining Manufacture

# Declining Manufacture

## Definition

A condition of industrial contraction where production is decreasing, leading to surplus labour supply as workers cannot easily transition to other employments due to legal and institutional barriers, forcing wages down below sustainable levels.

## Source Chapter

Book I, Chapter 10

## Context

Smith identifies declining manufactures as creating severe labour market distortions when workers cannot easily move to growing industries. He argues that institutional barriers like apprenticeship requirements prevent the natural reallocation of labour from shrinking to expanding sectors, causing unnecessary hardship for displaced workers.

## Economic Domain

Production

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