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# Natural Liberty in Trade

## Definition

The principle that individuals should be free to pursue their own economic interests without artificial restrictions, with the understanding that this freedom, guided by market forces, will naturally lead to the most efficient allocation of resources and greatest national prosperity.

## Source Chapter

Book IV, Chapter 1

## Context

While not fully developed in this chapter, Smith introduces the contrast between mercantile restrictions and natural liberty. He implies that the freedom to trade, invest, and employ resources as individuals see fit will produce better outcomes than government-directed economic activity based on the accumulation of precious metals.

## Economic Domain

Exchange

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