More emphasis is placed on the health of the entire society, with less material recognition to top individuals.
In contrast to capitalism, socialism tends to have a higher tax rate. The higher the tax rate, the point at which people are still willing to trade off work for personal life becomes lower.
Regulations will often be seen as unfair by individuals affected by the regulations. This proves more true within specific industry regulation, as people will feel targeted by the regulation.
These factors can retard individual ambition.
Government controls can also promote the creation or expansion of black markets.
Engels, Marx and Lenin assumed the human condition would naturally strive to the middle of the pile. Possibly from personal experience. Possibly a conclusion based on their times. A chicken in every pot begot a happy camper, until they grew tired of chicken.
Socialism is unrealistic, not to mention that it is virtually impossible to achieve equality within modern societies. Socialism might redistribute some of the wealth of the richest members of society yet it does not eliminate poverty. Although intended to improve the living standards for all, socialism lowers the income of the richest to be nearer the income levels of the poorest. Socialism can be economically inefficient as it puts off entrepreneurs from generating wealth because they have to pay higher taxes.
As socialism provides the poorest with higher levels of income via social security payments, it may deter them from working hard, if at all. Instead of working for basic needs, other non-productive pursuits may be taken instead. Socialism keeps poorer or less advantage people around who may not be the fittest. As a result, some people will act as parasites to the socialist society, taking but contributing little besides a sense of magnanimity to society, and further they are more likely to remain to breed resulting in children whom are less likely to succeed.
Further, a sense of unrealistic entitlement may arise from people who receive the benefits, causing difficulties among all.
Socialist governments can be more easily manipulated into giving bailouts to industries who may not spend the money on the reasons they requested it. Eg: bank bailouts where obscene amounts of money went to executive bonuses as opposed to shareholders or lower employees.
Socialist governments are not immune from corruption.
Socialist economies work on the premise that central planners (bureaucrats & socialist economists ) in government are in the best position to guide economic activity. These planners decide what goods and services are produced, how much to produce and who will produce and consume the various goods & services. The utopian idea behind central planning is that only the government can organize economic activity in a way that promoted the economic prosperity for the nation as a whole.
Historically this has been a failure. The former "communist" nations are perfect examples of socialist failures in economics. With all that said, the clear disadvantage of socialism is that it creates markets that do not conform to supply & demand. And, it demonstrates that "predicting" in an economic sense is a risky business.
Even China, a "socialist" nation, has seen that for them, a good degree of free economics has improved their society as a whole. While these policies are centrally controlled, in that what has been given, can be taken away, that would be based on political situations. It's clear that aside from free markets providing prosperity, history has shown that when a centrally controlled political situation seems to have become less oppressive, the more it does, the more the chance of political unrest.
So far, the Party in China has been able to balance this out. However, the recent riots in Hong Kong are a perfect example of how leniency can lead to political unrest.