I can always make better decisions in a moment for myself and by extension decisions that will be better for those around me then any committee can who is down the street.
Example: I am a farmer. The Collective says, "grow wheat!" Problem is, my fields are flooded. On the ground decision would be to plant rice or some other water loving item. But I can't do that. The Collective said to grow wheat.
So either I plant wheat and watch the seed rot in the ground or argue with the Collective. Even supposing that they allow arguing it is going to take time and time is something you don't have when you are farming.
One way or another even assuming the best of all worlds there is over a 90% probability that I am not going to be growing any thing that year.
I would be better off being a peasant, at least my overlord would make a quick decision. Committees take forever to decide if they should have sandwiches or rolly-polly for lunch.
It just does not work because of the fluid nature of life.
Yes, this is actually the reason that is valid. People very often say Communism is nice on paper, but can’t work due to human nature. No, it cannot work due to information flow. Human nature is a secondary problem compared to the appalling inefficiencies caused by command economies.
One simply has to read I Pencil (http://www.econlib.org/library/Essays/rdPncl1.html) to understand why communism can’t work. Even were people to be perfect angels without any measure of self interest (though how any creature could survive without self interest is a whole different can of worms to discuss), the fact that information about all the details of something as complex as an economy would be completely mess up means you are destined for failure.
This reason is also much more important to hammer home because it also points out the consequences of issuing more power to a central government even if it isn’t communist. You end up with the same effect from over regulation.