Old questions are worth asking

Contrary to the adage, there is something older than yesterday's news. How about a column from 25 years ago? That's what I'm looking at right now ' a clipping, sent by a friend, of something I wrote in 1976 about the potential drawbacks of index funds. Even then it was a quixotic argument, easily ignored in the dramatic rise of the 'passive' school of investing. And yet the question still bears thinking about: don't these funds, by their refusal to favour one stock over another, subvert the basic economic purpose of the markets? Index investors seek merely to match the performance of an...