Principle #6

Principle #6 - PRICES MUST BE ABLE TO TELL THE TRUTH.

For example, having a price ceiling like rent control will create a housing shortage. This distortion in price actually hides the true market price and causes a serious homeless problem (an affordable housing shortage situation at best). This, and other examples of PRICE CEILINGS, create shortages because it generates too much demand and not enough supply. Therefore, this example has a negative effect on the economy, but the principle in theory is positive.