Socialism operates far beyond the minimum efficient scale. Enterprises are simply too big - as should be expected, because markets already take advantage of economies of scale. Prices for almost all goods set too low, and accompanied by permanent rationing and line-waiting. Socialist systems can and do offer material rewards. But they are usually rewards for loyal service to the Party, not for production.
Producers have little or no incentive to produce at low cost or to serve consumers.
The transition problem. People resist uncompensated socialization of their property. The joint problems of government monopoly and the corruption of power. Once the government produces almost everything and employs everyone, there is almost no limit to what it can do to people.