The state distributes all the food with no cost to the needy (everybody gets some ration). Nobody is unable to afford food, so you have less food wasted than you would in capitalism. In capitalism you have restaurants / markets selling the food at a set price, and if some people are unable to afford it, the food may rot / waste before they get it.
You'll argue that this doesn't increase the actually food production which is what we see in the game. But the food availability to the people should actually increase, its just that in the game they show it in an unrealistic way.
Feel free to start your own thread with your own questions...Why does hierarchy rule increase happiness per military unit?
Why is universal suffrage very different from representation, even though the former is basically the same thing only that voting is extended to everyone (aka an upgraded version)?
Why does the caste system allow for unlimited specialists?
etc.
State property is not economically efficient at all. It's a pathetic government economic alignment in real life.
Well, I don't think it amounts to much in the game either - as an economic civic. No extra trade route (Free Market) and no free specialist (Mercantilism). The lowered maintenance cost only adds up to that much per city (on average), and should easily be compensated for with say an additional international trade route of 10State property is not economically efficient at all. It's a pathetic government economic alignment in real life.