Ukraine’s First Dominos Pizza, and Ikea’s departure

Dominoes opened right beside the Puzata Khata (this gallery) in the Podilla neighborhood, near Kyiv Mohyla Academy. I the week after their opening, I saw a line of about a dozen rollerbladers skating through the neighborhood with Dominos jackets and flags.

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I spoke with a local entrepreneur recently about Ikea. Earlier this year, the company froze its expansion, then sold it’s assets in Ukraine.

The rumor is they came under too much pressure from local authorities, and weren’t willing to pay any more bribes. (See my theory on bribes.)

The entrepreneur I spoke with suspected the pressure was orchestrated by the organized effort of local furniture makers who felt threatened, and wondered if, perhaps, the protectionist thuggery wasn’t a good thing.

Of course, this speaks to the oft-repeated economic fallacy that there is a limited number of jobs in the world for which we much all compete. This myopic point of view is easily exposed by the fact that there are many more jobs today than there were a hundred years ago.

The only limit to the number of jobs is the number of needs and desires felt by humanity. In other words, none whatsoever. Turning the furniture business over to more efficient producers makes resources available to entrepreneurs who will satisfy our other desires.

If my friend’s suspicious is true, and local furniture manufacturers did, in fact, harness the force of government to squeeze out competition, they only help themselves and only in the short term. As a consequence of the government’s coercion, all Ukrainians must pay a higher price for furniture less likely to suit their needs. Furthermore, fewer resources are available for other needs. Protectionism is a recipe for poverty.

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See also: Minister of Agrarian Policy Mykola PRISYAZHNYUK believes that imports of fruits and vegetables that can be grown in Ukraine should be prohibited.

2 Comments

  1. olena

    dear author, thanks for this post.
    you’re absolutely right regarding your opinion. every month i am surfing the web for the purpose to find out whether ikea comes to ukraine. but nothing happens so far – and the reason for that is enormous appetite for local little tzars who’s aim is to take quick money and to buy the house on the island.
    as a result i have to order ikea furniture from local sellers who double the price. and again – i do not buy the funiture from local producers just because i don’t like it.

    Reply

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