The argument is not that you get better prices, it’s that you get accurate prices.

First, this definition has always been circular: what’s the most accurate price? The one the market comes up with. More market, more accuracy!

Second, there is never any reconciliation of the costs society is saddled with in order to chase arbitrarily more accurate prices, the most obvious of which is the massive quantity of fat skimmed off by the financial services sector.

Third, as an index investor, I more or less couldn’t care less. This hyperfixation on accuracy only really matters to people who are actively trading, which is already a fool’s game.

> First, this definition has always been circular: what’s the most accurate price? The one the market comes up with. More market, more accuracy!

Market makers and HFT don't determine price: price is usually purely determined by the net inflows and outflows as decided by humans. MMs just smooth it out over time so everyone gets good pricing at the time and in the size they want it.

> Second, there is never any reconciliation of the costs society is saddled with in order to chase arbitrarily more accurate prices

By definition market makers are earning a fraction of the price improvement they provide, ergo the costs to society have to be less that the benefits for better pricing for the companies to stay in business!

> Third, as an index investor, I more or less couldn’t care less

As an index investor you should absolutely care! How do you think you are able to buy into the fund at a reasonable price? And then how do you think the fund is able to rebalance without transaction costs destroying performance long-term?