I mean there are lots of obvious examples of capitalist markets misallocating resources on a massive scale. Take the current AI hype or the blockchain madness that preceded it. In general, capitalism does a really poor job of ensuring that the needs of the working majority are met, and allocating resources in equitable fashion that benefits the working majority. US is one of the richest countries in the world, yet it has incredible amounts of people living in destitute conditions.
The obvious comparison is USSR vs US bloc during the cold war. US ended up in a dominant position because it was an ocean away. While Europe and USSR took the brunt of the war. US got to spin up their industry, and then massively profited from reconstruction of Europe. Meanwhile, USSR had to rebuild effectively on its own. Yet, even starting from such a massively disadvantaged position, USSR managed to challenge the western bloc and was seen as an existential threat by the US.
Furthermore, USSR produced many technological firsts. USSR was the first to put a satellite in space, and led majority of the space race. They produced the first Tokamak thermonuclear experimental system, developed the first intercontinental ballistic missile, and so on. It’s pretty clear that innovation was quite vibrant in USSR without any need for markets.