The most obvious factor preventing the market from functioning normally is the political factor. This is the constant risk of becoming a target of raiding, attacks by regulatory bodies, threats to the property and lives of entrepreneurs. “Competitive struggle” is often understood by us in the literal sense—as a struggle not for consumers’ money, but against competing enterprises. The state gladly provides such services. This affects pricing in many different ways.
First, the process of searching for low prices cannot proceed normally if winners and losers in competition are determined politically. Second, a monopoly effect often arises, and as in the mercantilist era, competitors are simply not allowed into the market. Third, the same effect of reduced planning horizons emerges—obtaining quick and high profits in a short period. Fourth, entrepreneurs do not develop. I knew quite successful entrepreneurs who did not place any advertising. They perceived it as a risk, as a source of trouble. “We don’t want to be in the spotlight,” they said. That is, our entrepreneur perceives business, as such, as a source of risk. Trying to diversify risks, he manages ten businesses for safety, without focusing on any one of them. However, only constant “expansion and deepening” of one particular business allows for price reduction.