I don't disagree in broad terms, but I think it's also quite possible that some configurations of trading will result in the "support" tail wagging the investment dog. At least, that would be the expected result if you think of markets like a dynamical system; in non-trivial dynamical systems (which I'd assume the economy is), the usual case is that there are significant internal dynamics (feedback loops, attractors, etc.) that in a number of cases will modulate, and may even dominate, the movements caused by external inputs. If that transfers to trading, there may well be pathological market dynamics that have little to do with the fundamentals of providing services to (ultimately) investors. Whether the dis-value of those pathologies produced outweighs the value of the services provided would then be the relevant question. Viewed as a machine, does the machine that includes the HFT lubricants run better in general, or is the reduced friction offset by a undesired effects such as greater risk of malfunction?
