# Frugality Versus Prodigality # Frugality Versus Prodigality ## Definition The contrasting principles governing individual and public expenditure that determine capital accumulation. Frugality increases public capital by saving revenue for productive employment, while prodigality diminishes it by consuming capital through excessive expenditure on unproductive labour and consumption. ## Source Chapter Book II, Chapter 3 ## Context Smith presents this as the fundamental economic choice affecting national wealth, arguing that individual frugality accumulates capital while prodigality destroys it, with public prodigality being particularly harmful when it employs revenue in maintaining unproductive hands. ## Economic Domain Accumulation ---