markitect-main/examples/infospace-with-history/output/entities/capital-accumulation-through-frugality.md

Capital Accumulation Through Frugality

Definition

The process by which national wealth grows when annual production exceeds annual consumption, allowing the surplus to be saved and invested in productive capital, thereby increasing the nation's capacity for future production and wealth creation.

Source Chapter

Book IV, Chapter 3

Context

Smith presents this as the natural mechanism of economic growth, arguing that societies that live within their means and invest surpluses in productive capital will experience sustainable economic development.

Economic Domain

Accumulation

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