Discussed algorithmic trading recently with an economics professor and mentioned the claim that this can create instabilities. For instance, if too many use similar programs, these can create feedback loops such that sales trigger new sales that trigger new sales etc. Or that the mix of currently existing strategies interact in such a way that they create a bubble. The response was that this is unlikely to happen - as traders will take into account the nature of and intereactions between the different strategies that are out there. As Robert Anton Wilson said, you can always see the invisible hand as long as you look hard enough and long enough (or something along those lines).