What exactly is artificial about 401K incentives? 401K plans give individuals the ability to invest tax free income into the various stock markets, bonds, or even money markets. I have accumulated a nice nest egg, nothing 'artificial' about it.
It provides an incentive to place money in stocks and bonds when there might be no good reason to do so other than the tax break. Furthermore most 401k holders haven't the foggiest idea how to evaluate the quality of equities. They just delegate that responsibility to the "pros". Of course the "pros" who manage 401ks have little incentive to be competitive because their jobs are partially secured by government policy not by their performance. Sounds like a receipe for a bubble to me.
Equities and bond markets exist to raise capital. Its entirely conceivable that they can reach saturation...but that doesn't matter to a 401k program. It will just keep pumping in dollars regardless how poorly they are allocated.
Artificial incentives reduce the efficiency of markets.