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# Prudent Family Maxim

## Definition

The economic principle that individuals and families should not attempt to produce at home what costs more to make than to purchase from others. This maxim guides efficient resource allocation at the household level and serves as a model for national economic policy.

## Source Chapter

Book IV, Chapter 2

## Context

Smith uses the example of a tailor not making his own shoes and a shoemaker not making his own clothes to illustrate how specialization and trade lead to greater efficiency. He argues this same principle should guide national economic policy regarding imports and domestic production.

## Economic Domain

Exchange

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