Individual Provisionin of Services in the Perestroika era 1988 - 1989 as a Succesor of the Free Business
Abstract
The late period of perestroika laid the foundations for the institutional and normative framework that made conversion from centrally controlled economy to market economy easier. And despite the fact that the perestroika economic system was still characterized by many distortions caused by the path dependency principle.
The work describes development of individual provisioning of services in the last two years of the perestroika. It focuses on the possibility of developing tiny business on the normative basis of the regulation of the Government of the Czechoslovak Republic No. 1/1988 Coll.
Individual provisioning of services does not provide a full alternative to tiny business known from the capitalist system. This was due to the nature of the socialist system.
The ideological reasons make impossible full-fledged hiring labor and capital accumulation. Centrally planned economy had an impact on pricing and on capital requirements for market entry.
This led to low investment activity of "entrepreneurs" and thus to petrification of the low efficiency of the services sector.