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# Frugality Versus Prodigality

# Frugality Versus Prodigality

## Definition

The contrasting principles governing individual and public expenditure that
determine capital accumulation. Frugality increases public capital by saving
revenue for productive employment, while prodigality diminishes it by
consuming capital through excessive expenditure on unproductive labour and
consumption.

## Source Chapter

Book II, Chapter 3

## Context

Smith presents this as the fundamental economic choice affecting national
wealth, arguing that individual frugality accumulates capital while
prodigality destroys it, with public prodigality being particularly harmful
when it employs revenue in maintaining unproductive hands.

## Economic Domain

Accumulation

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