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# Foreign Capital Exportation

## Definition

The use of foreign rather than domestic capital to export a society's surplus rude and manufactured produce when the society lacks sufficient capital to fully cultivate its lands and manufacture all its raw produce. This arrangement allows the society to employ its entire stock in more useful domestic purposes while still benefiting from international trade.

## Source Chapter

Book III, Chapter 1

## Context

Smith argues this arrangement is advantageous when domestic capital is insufficient for complete economic development, citing ancient Egypt, China, and India as examples of nations that achieved high opulence despite foreign-controlled export trade.

## Economic Domain

Exchange

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