The Most Important Economic Idea
By David Henderson
Questioner: If there was one economic idea you could explain to everyone on earth, what would it be?
Economist Steve Horwitz: The idea that prices are knowledge surrogates. Prices aren’t mere numbers–they are [a] form of communication that goes beyond language and math. Without them, we are blind and deaf in figuring out how to make choices and allocate resources. It is the price system that enables us to be as rational as we are and is a key part of what McCloskey calls “The Great Betterment.”
This is from Steve Horwitz’s “Ask Me Anything” session on Reddit.