Comment by unicornporn
3 years ago
Reminds me of Marx and his theories on the productivity of crime.
The criminal moreover produces the whole of the police and of criminal justice, constables, judges, hangmen, juries, etc.; and all these different lines of business, which form equally many categories of the social division of labour, develop different capacities of the human spirit, create new needs and new ways of satisfying them. Torture alone has given rise to the most ingenious mechanical inventions, and employed many honourable craftsmen in the production of its instruments.[1]
That is the broken window fallacy (https://en.m.wikipedia.org/wiki/Parable_of_the_broken_window) which was written in 1850, and Marx wrote the document you linked to in 1862 & 1863. Although I find Marx so impenetrable to read that I can’t even tell what his opinion or theory actually is. I would guess Marx read it, but he doesn’t respond to it, perhaps because in that linked document Marx says “For which reason all vulgar economists—like Bastiat…”. I also wonder what defines an economist as vulgar?
Fraud is waste. Businesses optimise for profit, and that optimisation often leads to some level of waste. No process is perfect.