> except for very specific situations. For example, when health or safety is threatened (lack of food, shelter, health care, for example) or to prevent extortion or exploitation.

Even when health or safety is threatened, price controls don't work; or more accurately, it works for some at the expense of others.

"Anti-gouging" laws on gasoline or bottled water during natural disasters, for example, remove incentives for market participants to on one hand supply those critical goods when where they are most needed and on the other conserve those scarce goods[0], and result in fewer people getting what they need.

Rent control and other forms of price controls on shelter have a long and deeply-documented history of having a lucky (or well-connected) few obtain housing, while others wait in line. It's further exacerbated by, again, the supply being disincentivized at the same time.

In all cases, there's a highly-visible benefit for those who are able to obtain those goods and services at a price lower than the market-clearing price, contrasted to the invisible suffering of those who couldn't. After all, setting a price of something to a value does not magically produce enough supply to match demand at that price (and often times actually reduces the supply over time). As an analogue to the idea that some profit-seeking enterprises "privatize the profits, socialize the losses", policymakers in situations like this "publicize the benefits, hide away the costs" of such policies.

> The free market allocates resources to those who can pay the most for them.

An important clarification: the free market allocates resources to those who value those resources the most, expressed by the signal of price.

Let's say a town is struck by a tornado and essential services are down, and there are 100 bottles of water, normally going for a dollar each. Let's assume that if the price is allowed to change, it'll go up to $10 per bottle. It's not like the rich man of town is going to buy up all 100 bottles at that highly inflated price; he'll buy one and take miserly sips, since he doesn't want to waste the most expensive bottle of water of his life. An 18-year-old who thinks he can get by for a day or two might not buy any bottles. A family with young children will be happy to spend the money for those extra bottles that just became available. In that way, the scarce resources are distributed along the lines of who value it the most. And the enterprising people of the next town over will brave the elements and the downed trees on the roads to deliver more water, hoping to make a profit.

But if the price must remain at a dollar per bottle due to anti-gouging laws, there's less incentive for people to conserve their water, and more incentive for people to stock up "just in case". After all, bottles of water just became a lot more valuable than a dollar to everyone; it's perfectly rational for people to take advantage of that deal. And a lot fewer people from the next town would risk damage to their cars and themselves to meet this need.

This isn't just a story; variants of this has occurred in the wake of natural disasters.

[0]: https://www.cato.org/regulation/spring-2011/problem-price-go...