Full Idea
The price system is a way of signalling and transmitting information. The fact that the price of a good rises shows that the good is in short supply. And if prices rise in a sector because of increasing demand, then new producers rush in for the profits.
Gist of Idea
Market prices indicate shortages and gluts, and where the profits are to be made
Source
Jonathan Wolff (An Introduction to Political Philosophy (Rev) [2006], 5 'Free')
Book Reference
Wolff,Jonathan: 'An Introduction to Political Philosophy (Rev)' [OUP 2006], p.145
A Reaction
[Woff is discussing Hayek] Why do we have a shortage of decent housing in the UK? Centralised economies lack this direct way of discovering where their efforts should be directed.