Hi Walter, this line of questions is not going to lead to a proof of your position. The S&P index removes failures, so your question fails to address survivor bias. Also, you argue the perfect over the good as a reason for status quo.
But the overall growth in the economy and strong long term growth of much of the S&P 500 is ample evidence that investment is not dominated by short term thinking, and that the S&P 500 is not a massive pump & dump scheme.