Thanks for the book recommendations. Obviously, I haven't read them yet, but I think my next point will still be valid. In situations of natural fixed supply,

Thanks for the book recommendations. Obviously, I haven't read them yet, but I think my next point will still be valid. In situations of natural fixed supply, think real estate in times square, water after Katrina, rare collectors items - the price is still extremely important for rationing. And the price does lead to the highest value activities performed. For example, in times square, you see mass market wide popularity businesses - you don't see niche computer parts stores (which you might if rent was capped at $500 per store per month). Nothing to do with NIMBY. In this case, if rent control was established, people that would be willing to commute from further away might end up living closer, while those who want to pay more to commute less may be forced to live further away. Exactly the sub-optimal economic situation.