Is Passive Indexing Marxism?

This is an interesting contention by Bernstein Research that passive investing through index funds, and the massive government incentives to invest in them through tax-deferred and tax-sheltered retirement programs, is worse than Marxism.

https://www.scribd.com/document/323564709/Bernstein-Passive-Investing-Serfdom-Aug-2016

The contention is that:

1. Markets are a mechanism to allocate capital
2. Indexing and the infrastructure supporting index causes capital to be allocated inefficiently without effective analysis and with leakage to those who do very little or nothing
3. Bad companies get disproportionately MORE capital and positive attention (either via direct capital investment or lack of shorting) and good companies get disproportionately LESS capital and positive attention

Photo by Rick Tap on Unsplash

The Left would be heartened by the positions here since it would mean that any arguments against poor people on welfare would first need to address what’s essentially welfare for high income people. The Right would be heartened as well since it’s a strong statement against earning undeserved income and wealth, while at the same time making a statement against the perverse incentives introduced by government policies WRT taxes and tax-deferred retirement accounts.