How do we know they are properly allocated? because in other case, the market would be allocating them in another way.

Don't you think there is a circular reasoning there somewhere?

Even when the economy is under-performing, and there are obviously underutilized resources, we have to accept it because there is not profit in perspective to make. This is the logic that, for instance, pursue austerity in Europe instead of counter-cyclic policies that would be the logic thing to do.

What about using markets as a tool for accomplish society goals instead of as the way to define the goals? What about defining goals using that other tool we have: democracy.