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# Colonial Revenue Potential

## Definition

The capacity of colonies to generate public revenue through taxation and trade duties, given their economic development, population size, and commercial activity. This potential remained largely untapped due to the focus on monopoly profits rather than systematic revenue collection.

## Source Chapter

Book IV, Chapter 7

## Context

Smith argues that colonies possess significant revenue potential that could support both local administration and contributions to imperial expenses. He contends that developing this potential through fair taxation would be more beneficial than maintaining the current monopoly system that provides uncertain profits while creating political tensions.

## Economic Domain

Regulation

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