Not really. Index funds depend on the markets being efficient enough that the cost of finding the inefficiencies is higher than the gain from finding them. The more people who blindly invest in markets, the less efficient the market is in reality, and the more possible gain for those who do research.
Note that I said "people invest in markets", and not index funds above. There is a subtle differences, modern index funds are not true market indexes. There are fund managers who trade actively - however they trade mush less often than a traditional actively managed funds and with different rules. The managers do watch earnings reports and sell bad stocks, but the managers are also in for the long term and re willing to wait out a downturn. The managers also know they are judged by the index, and so bad stocks are not a negative in the same way that active funds are judged. Thus an index fund trades much less often, but they are not really a buy the index as published.
What I am saying is that the definition of an inefficiency in the market is the information that only a closed subset of the market has access to.
Let's take an example: China. While they keep the image of a purely capitalist environment, every company above a certain size is expected to have some sort of government control. That would be the inefficiency of that market, because at that point people stop making decisions based on what the company wants but rather what government wants. You can't have open access to the strategic planning by the government.
Besides, you're clearly trying to argue definitions rather than trying to take a step back and realising that I am arguing abstracts rather than specifics in the first place. In other words - what you're saying isn't denying what I said; it's just embodying the concepts in the real world.
For example: _any_ true real-life index fund would always need to trade at a certain point, and that has to be done by someone. So yes - an index fund is just a "glorified" version of a private fund; because people are still managing it at a certain point. But the reason it still makes money is because markets are efficient.
Note that I said "people invest in markets", and not index funds above. There is a subtle differences, modern index funds are not true market indexes. There are fund managers who trade actively - however they trade mush less often than a traditional actively managed funds and with different rules. The managers do watch earnings reports and sell bad stocks, but the managers are also in for the long term and re willing to wait out a downturn. The managers also know they are judged by the index, and so bad stocks are not a negative in the same way that active funds are judged. Thus an index fund trades much less often, but they are not really a buy the index as published.