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# Colonial Economic Potential

## Definition

The maximum economic development that colonies could achieve under optimal conditions, including full exploitation of natural resources, unrestricted trade access, and autonomous economic management. This potential is systematically constrained by mercantilist monopoly policies.

## Source Chapter

Book IV, Chapter 7

## Context

Smith argues that colonies possess enormous economic potential that remains unrealized due to artificial restrictions. He contends that removing monopoly controls would allow colonies to achieve prosperity levels far exceeding their current development, benefiting both the colonies and the mother country.

## Economic Domain

General Theory

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