Property, Not Prices

Bob Murphy nails it:

To pick a more "economic" example, it is not true that laborers always sell their services to the highest bidder. Someone may give up the stressful (yet highly paid) life of corporate law and opt to be a librarian.

As these examples illustrate, the function of market prices is not to dictate how resources are deployed, but rather to let the owners make an informed decision. If there is a tremendous housing shortage, then the rising rental rates will let the parents know just how much someone else would like to use their child's room. And the best trial lawyer in the world will probably not end up as a librarian, because of the outrageous salary he or she would be turning down. Again, the market price of his or her services signals how much others value them.