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Prices, in my opinion, are the most efficient way to distribute scarce resources, especially ones with multiple different uses. Once you understand how prices interact with supply and demand, you will understand why limited government intervention is important.
It's important to think about supply and demand as fixed numbers. When I first started thinking about this topic, I had difficulty understanding it because I thought that demand was how much people needed something in relation to its supply. Rather, demand is just the amount of something that is needed. Just because a resource becomes easier to get does not mean that there is less demand for it, nor more supply. In a properly functioning market, prices reflect the supply/demand ratio, not simply just the demand or just the supply. Many things contribute to demand, from the need for survival (like water) to socioculturally developed meaning (like a signature from a celebrity). And, many things contribute to supply, like availability of resources, ease of obtaining them, transportation, labor and, very importantly, incentive for people to produce the product or service.
When demand for a scarce resource with multiple uses goes up, there will be more competition for what production channels receive said resource, and how much each of them is to receive. Thankfully, no human thinking is required for these "decisions" to be made; Prices will do the work. The increase in demand will make the price of that resource go up, as the more important channels (fueled by customers placing higher importance on paying for them) pay more to retain their supply despite other channels asking for it. The less important channels won't be able to receive as much (with the same amount of expenditure) since the more important ones have raised the value of said resource and their recipients (customers) don't place high enough importance on buying from them at higher prices.
All of this is basically reversed when the opposite occurs. When demand for a scarce resource with multiple uses goes down, there will be less competition for what channels receive said resource, and how much each of them is to receive. Again, no human thinking is required for these "decisions" to be made; Prices will do the work yet again! The decrease in demand will make the price of that resource go down, as the previously more important production channels are no longer willing to pay as much to retain their supply. With the same amount of money, more of that resource can be purchased, making it available to less important use cases, lowering costs for producers wanting to make less important goods, and therefore enabling more consumers to afford those goods, or at least a more comfortable amount of them.
Consider a scarce resource with many possible uses. Your country is currently in a war, and said resource is needed to put towards building as many war machines as possible. It is the only resource of its kind, with little to no viable alternatives. This resource could also be used for entertainment or making washing machines (among other things). However, the demand to build war machines is far greater than the demand to be entertained by a movie on Friday nights or needing a new washing machine, so the price of said resource goes up to whatever level the most important production channel will pay for it, or until their need is fully met. Or at least, if the war machines end up demanding more of the resource than suppliers can produce at the same cost as before, their respective manufacturers have to match that price, increasing the price of them for the consumer, so people naturally ration those things. In the end, most of the manufacturers will be selling most of their product to building war machines, the most important need at the time. All of this has been done without one single regulation on the price or sale of the resource, and the most efficient possible outcome has been achieved. Once the war has been settled and war machines do not need as much of the resource, things can return to normal, and there may even be a surplus for a while.
Not only do resources become efficiently distributed with free market price systems, but they also become most efficiently produced. When the price of a resource goes up, supply is incentivized to go up since manufacturers will want to profit off the high-value resource...and they should profit! They are not greedy for profiting; for they are fulfilling the needs of the market. Consequentially, the increase in supply balances the increase in demand, and works a check/balance for the price of the resource; Once the supply is equal to the demand, there will be less scarcity and less competition between production channels.
It is possible, too, for demand to remain the same while prices go down. This happens when the supply becomes more easy to manufacture. Yet another efficiency to free market prices is competition and innovation. If a supplier innovates and lowers production costs for a product that used to cost more to manufacture, prices can now be lowered while retaining the same profit margin. Not only does this lower prices for consumers, but it ensures that manufacturers are incentivized to make the best use of the resources they have available, so there will be little waste, of resources with multiple uses, that is unnecessary. Of course, people will inevitably complain that this system incentivizes people to do wrong things like ruin the environment if it's cheaper to do so, but here is the solution to those sorts of complaints: Raise good people, with good morals. No government regulation can do that. And that is a very different, lengthy discussion which is not meant for here.
Some further argue that the "greedy" free market capitalists will simply raise their profits at their discretion, making prices unnecessarily high for consumers. Maybe even, when innovation takes place, the prices will not lower but only stay the same, while the manufacturer makes the difference in extra profit. However, none of the sort is possible if competition is across the lake. Find a way to innovate and lower your production costs? Well, you could keep your prices the same and raise your profit margin...until the other guy figures out what you did and, rather than make more in profit, lowers his prices just a little and takes your customers. Then, just like that, you have started an affordability war, and the price will keep coming down until it is as low as it can go for the market and both companies (or, one died of stubbornness). For every way that a company could take advantage of prices, another company can take advantage of the other guys' wrongdoing. Oh, and God knows what you did.