macrocephalopod

This is because index funds free ride on the research of active investors. If no one was tracking the decisions and performance of individual companies and deciding who to buy and sell, how exactly would prices be set and how would markets impose discipline?

Bit of a straw man argument IMO. Even in the US where it the most advanced, passive is still just 17% of free float, after five decades. Active will always be around.

How does that in any way negate what I said? You are comparing the performance of funds that do no research and essentially crowd source across active funds but whose existence would not be possible without them? Not exactly apples to apples IMO

How much should active managers be paid for their inability to beat indexes? Surely, they are overcompensated because they don’t outperform. Optimally, there should be enough active mgmt to earn its fees and no more. Thus, we are still oversupplied with active.