The problem with central planning: "the information problem"

It doesn't really matter if it's socialism, communism or fascism... the problem is the same - but it's also why even in a perfect world, socialism can't work (reason.com):

In order for us to have cooperation on a massive scale-cooperation on a scale of millions or tens of millions-we need some sort of signal that tells us what's going on in the economy. It turns out we get that signal in market societies and it's in the form of prices. We're all making all these private decisions and it modifies prices a little bit and then we respond appropriately. We don't know what's causing scarcity. We don't know what other peoples' desires are or demands are, we can just see that the price of strawberries is cheap over here and it's expensive over here and that tells me everything I need to know as a consumer about what to do. The problem with socialism on a mass scale is that they don't have a substitute for prices.

[...] In principle, there are cases where an omni-benevolent, omniscient dictator could come in and fix the market and make it better. It's rarely going to be the case in actuality that a person knows when and how to intervene. Given the limits of human knowledge, given the limits of peoples' ability, and also just given their biases and so on and the fact that they're likely to use this power selfishly rather than for our own good, I think it's better not to empower them to do these things.