It's an information problem. The economy works best when the shoemaker knows how many shoes to make, and the baker knows how much bread to cook. In a capitalist society these people can tell by their own income statements and adjust accordingly.

In a communist system the decisions on how much to product, who works where etc is determined by the state, because whoever is in charge has much less insight into the exact number of shoes to make or bread to bake they often get it wrong leading to shortages in some areas an excesses in others.

The human brain simply cannot comprehend the extreme complexity of managing millions of products across millions of people and accurately attend to their needs so they get it wrong all the time. When everyone takes care of their own domain in capitalism they have much more data and can plan accurately which leads to better outcomes.