Comment by chongli
3 years ago
I think you’re conflating the terms optimal and ideal. The ideal amount of fraud in society is zero. The optimal amount of fraud in society is not defined, because optimization problems are always subject to a set of constraints.
So then we may ask: “what is the optimal amount of fraud in society such that the costs of legislation, education, and enforcement do not exceed X% of GDP?” and that is a different question. You might also throw technology and R&D in there because new tools make it easier to investigate fraud. Of course new technologies also open up new possibilities for fraud, so this is a very complicated exercise. But I think it’s fair to say that given any reasonable constraints, the optimal amount of fraud is nonzero.
The way this is phrased, I expected to learn there was some benefit to a low amount of fraud, as such. There is not. There is a benefit to a high amount of trust, which necessitates accepting some amount of fraud.
The optimal amount of crime in a society is non-zero because a society with zero crime would be a dystopian police state where innocent people sometimes get caught up in the justice system's net to make sure it catches all of the criminals.
The classic principle of Anglosphere common law is that its better to let 10 criminals get away with it than to convict 1 innocent person. The same idea applies to fraud because overzealous fraud prevention causes problems for legitimate users whose actions incorrectly get detected as possible fraud. The benefit to tolerating a low amount of fraud is that your product won't be hostile to your legitimate users. The benefit to tolerating a low amount of crime is that you will live in a free society rather than a dystopian tyranny. Freedom is good and it is worth giving up quite a bit of safety for the sake of being free.
I said this somewhere else, but there’s 2 things at play here:
- A utopia where people don’t defect in prisoners dilemmas (most types of crimes like shoplifting: the store won’t have to hire loss prevention and cashiers, and you pay less for their reduced costs) is ideal, but:
- Such a utopia doesn’t and can’t exist because defection individually increases utility at the cost of everybody else. Hence cashiers, loss prevention, KYC, etc.
Thus the real world is a careful optimisation problem where we have to search for an equilibrium at which society as a whole benefits the most. People can argue all day about where this is, because the trade offs involved are non-obvious:
- More surveillance means, all else being equal, less crime, but police officers can defect too and only arrest minorities and use said surveillance for something else, etc.
The problem is walking through a very high-dimensional search space, and we humans are had at it. There’s no real solution though, because individual incentives don’t line up to solve it.
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I’d argue that the optimal amount of crime is zero but the optimal amount of possibility of crime should be non-zero. That’s a necessary escape hatch out of a police state or authoritarian government. After all, the resistance against the Nazis was technically criminal at that time, even though now we’d all agree it was a good thing it occurred anyway.
It is especially important nowadays because unlike back then where technology was limited and surveilling 100% of the population was impossible, it is very much possible today and is already being done in certain places such as China.
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repeating myself but
> ts better to let 10 criminals get away with it than to convict 1 innocent person.
is arguably false. it forgets that 10 criminals had 10 or more victims. If you optimize for the least number of victims then it's easily possible that convicting a few innocent people has a net positive in lowering the total number of victims including the victims of being wrongly convicted
to put it another way, perfect is the enemy of good. In this case if in pursuit of perfection of having zero wrongly convicted you end up causing more victims of criminals then you've arguably failed
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> The optimal amount of crime in a society is non-zero because a society with zero crime would be a dystopian police state where innocent people sometimes get caught up in the justice system's net to make sure it catches all of the criminals.
At this point you're just playing with the definition of crime. I would argue that it is criminal to deprive an innocent person of their freedom, and challenge that your proposed scenario is actually "zero crime".
Secondly, you talk of catching "all of the criminals". In a "zero crime" environment there are no criminals - by definition if there is a criminal, then a crime has been committed at some point.
All that said I agree with your larger point - the cost of freedom is that people are not constrained before the fact from committing crime, and that's a good thing on the whole.
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We don’t need there to be a benefit to a low amount of fraud to optimize for it. Optimization is a purely mathematical exercise [1]. Once we construct the problem with a chosen set of constraints then we apply mathematical techniques to solve it. Of course, many types of optimization problems (especially non-linear or non-convex) can be extremely difficult to solve optimally without relaxing some constraints or settling for approximations to the optimal solution.
But, besides that, the task of interpreting the results and of potentially selecting new constraints or even a new objective function is a separate matter. Perhaps we should be seeking to maximize trust rather than minimize fraud in society. But then we have to ask ourselves: “what would that look like?”
[1] https://en.wikipedia.org/wiki/Mathematical_optimization
There does not need to be a set of constraints for optimisation to be defined. You can talk about optimisation on an unconstrained domain, for example all of ℝ⨯ℝ. But there DOES need to be a measure function that measures what you are optimising for. The benefit of fraud would be one such function you could optimise for, and that seems to be what GP is after. The pure amount of fraud is a different one, which seems to be what you are interested in.
Even without trust, you will reach an optimal amount because preventing fraud tends to become more expensive than the fraud itself, once you cover the simple and easy cases
The benefit to a low level of fraud is that people are still looking out for fraud, so the society is more robust. If there was no fraud, and someone just invent fraud (it will happen), the damage could be devastating.
they would have to be Moriarty level like in their inventiveness, most people start low and then expand their inventiveness with experience, the low early frauds would establish the new invention in the society.
Also The invention of Lying: https://www.imdb.com/title/tt1058017/
I think you're conflating the standard english word "optimal" with mathematical optimization.
user5678 is correct; this isn't a case where the mathematical use of the word differs from the normal use.
I meant optimal fraud at 0 as in a utopia would have no fraud whatsoever; a utopia where everybody cooperates in prisoner’s dilemmas, where I can lend a stranger my phone and not worry they’ll run off with it, and where cashiers don’t exist because you can count on people leaving money as they walk out the store. Obviously this utopia doesn’t and can’t exist: people defect because it works against cooperators. Fraudsters are people who defect in the societal game of iterated prisoners dilemma, and thus we have to build defences against them until some sort of Nash equilibria is reached.
So I guess I did mean optimal in two different ways. One is a utopian cooperative paradise, the other an optimisation problem for an optima where businesses make the most money and society overall is richer than if business activity got crippled.
The word “optimal” just means “best” or “most favourable”. It doesn’t necessarily apply a formal optimisation.
Eg here’s an online free source but any dictionary will tell you the same. https://www.wordnik.com/words/optimal
> So then we may ask: “what is the optimal amount of fraud in society such that the costs of legislation, education, and enforcement do not exceed X% of GDP?” and that is a different question.
It's also not a question of any particular interest; you're interested in what maximizes (good - bad), not what maximizes (good / bad).