<!-- generated: provider=openrouter model=arcee-ai/trinity-large-preview:free date=2026-02-19 source=book-4-chapter-07 -->

# Colonial Labor Market Dynamics

## Definition

The employment conditions in colonies characterized by labor scarcity, high wages, worker mobility between employers, and the rapid transition of laborers to independent producers. These dynamics create a fundamentally different labor market than exists in countries with abundant labor and scarce land.

## Source Chapter

Book IV, Chapter 7

## Context

Smith analyzes colonial labor markets to demonstrate how economic conditions naturally produce favorable outcomes for workers. He argues that monopoly restrictions that reduce wages and limit economic opportunities undermine these beneficial labor market dynamics.

## Economic Domain

Distribution

---
