I suspect the threshold is actually about 450 people - but if you scale that up, and have multiple units of 450 people each - then you start to have something workable. The long term problem with planned economies is the inherent inflexibility and immovability in the face of changing realities.

Markets work because they are irrational, and move with people as situations change - like a subconscious reflex - planned economies require conscious effort to reapportion their efforts in the face of change.

The solution to socialism is collectives - lots of little ones from 50-500 people, which then interact with each other using market settlement and price adjustment mechanisms.