<!-- generated: provider=openrouter model=arcee-ai/trinity-large-preview:free date=2026-02-19 source=book-4-chapter-07 -->

# Colonial Economic Comparative Advantage

## Definition

The relative efficiency with which colonies can produce certain goods compared to other regions, based on natural resources, labor conditions, and market access. Exploiting comparative advantages through specialized production and trade maximizes economic benefits.

## Source Chapter

Book IV, Chapter 7

## Context

Smith argues that colonies possess significant comparative advantages, particularly in agricultural production, that should guide their economic development. He contends that monopoly policies prevent colonies from fully exploiting these advantages through restricted trade and controlled production.

## Economic Domain

Production

---
