Deadweight Loss of Excess Inequality.

Fair economic system=fair distribution of the factors of production=aligned incentives=optimal economic efficiency
For the above to be true, a deadweight loss due to the unfair distribution of Land, Labour and Capital must also occur. However, on the face of it this isn't necessarily the case. 
Let us assume I own all the land in the UK (unfair), which I rent out. Not the buildings just the land. The rental income I receive from this is £250bn per year. Assuming nothing in the current tax system changes, my discretionary income would be roughly £100bn each year, and everyone else’s in aggregate £100bn a year less.
Because there have been no other changes apart from who gets the land rent, incentives to produce have not changed either, so despite the now massive gap in equality between me and everyone else, GDP should remain the same.
However, I postulate there is a deadweight loss due to a “thinning of the market”, hence a drop in output.  
In other words 25 million households demanding one item priced £40 brings the scope for more economies of scale and cost innovation than one person demanding one item worth £1bn.
All the wealth we see around us comes from agglomeration effects, which are bigger when markets are thicker.
A concrete example of this may be England after the Black Death in 1375, in which the remaining workers were able to demand higher wages and lower rents. The economy started to flourish. This transfer of wealth from the hands of the overlords to the masses seems to be the point where feudalism died and the free-market capitalism we know today took root.