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# Agricultural Productivity Limits

## Definition

The constraints on farming efficiency imposed by institutional arrangements including labor systems, capital ownership structures, and legal protections that determine whether farmers have incentives to maximize output or minimize effort while meeting subsistence requirements.

## Source Chapter

Book III, Chapter 2

## Context

Smith analyzes how different agricultural systems create different productivity outcomes, arguing that servile labor systems and metayer arrangements inherently limit productivity because workers have no incentive to exceed subsistence production when they cannot capture the surplus.

## Economic Domain

Production

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