"Done "correctly," HFC is bad for society because, like insider trading done "correctly," it specifically screws the "have nots" to benefit the "haves.""
I'm as critical of the industry in which I work as anyone, but I do feel the need to point this out: HFT is *nothing* like insider trading. If you don't understand why there's a difference between the two, I doubt there's a useful discussion to be had here.
"Yes, the screwed-up trades are a problem, but those are the side-show. The real problem is that those with the ability to do HFC can use that ability to "jump ahead in line" and screw those who don't have this ability."
Again, nope. The time-advantage aspect of HFT is no different to the first traders who made use of the telegraph system to run arbitrage strategies between Chicago and New York.
I do understand that the "high-frequency" aspect of high-frequency trading is often emphasized by the media but, as someone who's worked for the most successful HFT prop fund in Europe for six years, I can safely say that the "high-frequency" aspect is vastly overrated. Absolutely none of the successful strategies with which I'm familiar depend crucially on sub-microsecond (or even millisecond) latency. Rather, they're all based on extremely sophisticated combinations of statistical analysis, DSP, machine learning, and human intuition.