A 401K is just an investment in indexes linked to your pension, there's nothing stopping everyone putting their own money into an index themselves. The question makes sense, how many people could the market support if everyone was investing and not spending.

> A 401K is just an investment in indexes linked to your pension, there's nothing stopping everyone putting their own money into an index themselves

This is mostly incorrect.

A 401k in the United States is a tax-advantaged investment account. You can buy shares of individual companies, you can purchase index funds, you can leave it there as cash, buy gold, or just about anything you want or you'd expect to be able to purchase using a brokerage account. Depending on the route you take (Roth or Traditional) you can realize tax savings now or at a later point. 401k Accounts are programs offered by your employer as well [1].

One of the many reasons the OP's question doesn't make sense is because not every country in the world has a 401k program.

[1] There are other programs for individual owners or for those who have an employer that does not offer a 401k.

>how many people could the market support if everyone was investing and not spending.

I think the more salient question is how many people could the market support if everyone was consuming and not producing.

Not producing as in the goods and services that people want such as clean toilets and food and nursing home care. Or not producing the kids who will go on to produce the aforementioned goods and services.

An overabundance of investment without an outlet would just decrease yields. Hypothetically the yield could go negative.

It is a self correcting problem. If the yields are too low people can spend it on hookers and blow before dropping it into a money shredder. The yield shouldn't drop much below the premium for the time preference of money.