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# Merchant Capital

## Definition

Financial resources employed by merchants in buying goods wholesale and selling them retail, or in trading goods between different markets. Under the mercantile system, this type of capital was often viewed as particularly valuable because it facilitated the movement of precious metals through international trade.

## Source Chapter

Book IV, Chapter 1

## Context

Smith discusses how merchants understood their own enrichment through trade but failed to recognize how their activities enriched the broader society. He notes that merchants were the primary advocates for mercantile policies, as these policies directly benefited their particular type of capital though they might harm other forms of economic activity.

## Economic Domain

Exchange

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