Philosophical Economics has a thoughtful essay on this: https://www.philosophicaleconomics.com/2016/05/passive/ https://www.philosophicaleconomics.com/2016/05/

Philosophical Economics has a thoughtful essay on this: https://www.philosophicaleconomics.com/2016/05/passive/ https://www.philosophicaleconomics.com/2016/05/passive/ I’m going to argue that the trend towards passive management is not only sustainable, but that it actually increases the accuracy of market prices. It does so by preferentially removing lower-skilled investors from the market fray, thus increasing the average skill level of those investors that remain. It also makes economies more efficient, because it reduces the labor and capital input used in the process of price discovery, without appreciably impairing the price signal.