1) You do not need "abnormal" returns to cover inflation (see wiki definition at the OP).
No, you don't, but you still need increasing inflows for obvious reasons.
2) Then the shops, malls, factories, self-employed professionals, the entire economy are a Ponzi scheme. What is the usefulness of such a definition?
You can have increasing inflows outside a Ponzi scheme. It's called "capitalism."
A stock market becomes a Ponzi scheme given the example in the wiki.
3) The market can continue operating even if the fees become insufficient. Remember "Margin Call" - they let go like 80% of their staff. They can shed staff, increase the fees. So instead of 0.01% fee you'd have to pay 0.1% and that'd put off a bunch of small speculators. The market will shrink but continue operating. At recession times the market stays on depressed levels for months or even years but continues operating.
I am referring to the organization that runs the exchange, not the brokerage firms.
We can manipulate the definition of Ponzi however we like, but then again, what is then the usefulness of the concept. The original wiki definition at the OP includes the word "perpetuation".
If it's seen as a Ponzi scheme, then forum members who support that might be discouraged from trading in stocks. The same goes for anyone who will use a rise in the stock market as evidence that the economy is improving.
The are references to the entire economy as a Ponzi scheme above in the thread, that's why the comment was made.
Sorry, I am only referring to the title of the thread. The idea of the "entire economy" being a Ponzi scheme is another topic but may be considered given the nature of money as well as the premise that market forces will ensure continuous economic growth in a world with limited resources.
How is the market guilty of it. Lots of people are pouring in in search of free money and a greater fool. Lots of people are gambling in Las Vegas. Do not forget that many people, normally a substantial majority, stay away both from the bubble investments and from gambling.
This argument makes no sense to me. It is as if you want to separate the idea of a stock market with the actual one involving "lots of people...pouring in in search of free money," etc. This, of course, implies the possibility of a stock market that will involve only people who will 'stay away [from both] the bubble investments and from gambling." Good luck with that.
You might be attacking the wrong guy. If pensions plans are directed to a place unsuitable for them, that you'd rather be after whoever directs them rather than after that place. If a broker makes empty boasts then go after that broker.
I think this is what got the U.S. into trouble in the first place, i.e., the assumption that the market is "self-correcting," and that the reckless will suffer and the prudent will triumph. Of course, that assumes that the reckless aren't in power.
What is exactly you suggestion for the way forward? To shut down the market? If anything, the market provides another degree of economic freedom. You always have an option of going there or refraining from going there; if the market is not there, then no such option is available.
There is no "way forward". And if "the market provides another degree of economic freedom," then count on people to look for more "economic freedoms," leading to more economic crises. The idea of "going there or refraining" will become irrelevant given problems like peak oil.
Seeking speculative (more than normal) returns in the market is a less then zero-sum game - you have to rip off the guy on the other side of the transaction plus keep your broker fed. No one hides this fact. So if you are after free money from the market then this is not exactly the place for high moralizing. You win - enjoy, you lose - take stock and go on. You were after ripping off that other guy and he did not let you - not exactly the point for grand moral standing.
Except that the "zero-sum game" actually involves the powerful getting bailouts at the expense of the citizenry, which the former can easily do because they are powerful. Also, the "zero-sum game" through financial speculation contributes to higher food and oil prices, if not to economic crises that leads to more unemployment and lack of income.
So much for that. Eventually, the real zero-sum game will come out: we use lots of oil to prop up "economic freedoms" including a stock market, and when oil production starts to go into decline....
But the other side of the coin - the market puts you in a perfect competitive position, where your performance depends only on yourself. You and impartial numbers only. A breath of fresh air really. And far from free money - hard work. Many other economic activities like "jobs" have long digressed mostly to nothing more than endless fuss of office politics.
"Impartial numbers," indeed. Like much of total money supply.