Regulation

I think the fact that our economy is subject to active state regulation needs no demonstration. Regulation directly affects the process of searching for lower prices. In this case, the emphasis should be placed on the words “process of searching.” An entrepreneur is always on the lookout for new production methods, new suppliers, alternative forms of organization, and so on. Regulation strikes directly at this process. In other words, it destroys established connections by constantly changing the operating conditions of various enterprises. Ukrainian regulation is characterized by manic activity that brings the economy to a state of chaos. In such conditions, an entrepreneur drastically narrows his time horizons; due to the unpredictability of his environment, his task is reduced to simple survival. Ukrainian regulation has another characteristic. The economy, as is well known, consists of production chains made up of a series of stages. The product a consumer buys passes through a huge number of stages before reaching him, with each stage represented by independent enterprises buying goods from one another. However, at each of these stages, so-called “primary factors of production” are employed—labor, land, and capital (which is why they are called primary). The Ukrainian state has a particular fondness for targeting these primary factors; one such blow can destroy the entire established chain and immediately raise the price of the final product.