# Capital Decay Through Excessive Consumption ## Definition The process by which a nation's productive resources are diminished when annual consumption exceeds annual production, forcing society to consume its capital stock to maintain current living standards, leading to long-term economic decline. ## Source Chapter Book IV, Chapter 3 ## Context Smith warns that when expenses exceed revenue, capital must necessarily decay, and this principle applies to nations as well as individuals, making sustainable consumption levels essential for long-term prosperity. ## Economic Domain Accumulation ---