882 B
882 B
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