It can be the basis of an economy. But it will always be a very inefficient if you measure efficiency in terms of societal value with respect to the societal effort put in to create that value. Why? Because it necessarily entails a large section of our production being focussed on a small proportion of the people. And even ignoring issues of fairness, diminishing marginal utility means that those people don't derive nearly so much value as that same effort directed at the masses would create.