Comment by dahart

> can one argue that the optimal amount of online sex trafficking and child abuse is greater than zero?

No, this fraud argument does not apply to child abuse or sex trafficking. The reason is because the fraud argument is talking only about direct financial loss of fraud compared to direct financial loss of enforcement. The fraud argument doesn’t actually work if we’re talking about individuals losing their savings, it only makes sense if you assume the cost of fraud is borne by banks, and that it’s a marginal cost and does not bankrupt anyone.

There is no amount of money that makes the damage done by sex trafficking or child abuse okay, and there is no reasonable way to convert the damage done by these crimes into money. To suggest that the optimal amount is non-zero would only be an externalizing of the damage and costs of such crimes, and to essentially reduce our morals to money. And that’s exactly what this very argument does in other contexts; it externalizes non-financial damage, and sometimes financial damage too. This argument is made in other contexts, and it’s sometimes wrong and/or full of assumptions that aren’t true.

We could imagine extreme hypothetical situations that might clarify the argument or how to think about it - is it equivalent if 1% of people suffer a 100mm knife wound or 100% of people suffer a 1mm knife wound? The 1% would all die. In the other case, everyone suffers a mild inconvenience they forget about by tomorrow. Despite the equal amount of flesh damage, these are not remotely equivalent, and thus can’t be compared or declared as optimal. The type of damage done matters, and the number of people affected and amount of damage done to individuals matters.

Beware arguments that reduce negative outcomes to money. These tend to favor businesses (who are biased to prefer less regulation) and tend to externalize all the indirect costs and the costs to society. This is exactly what has been done with regard to pollution over the last century - it has been successfully argued that the optimal amount of pollution is non-zero, and we’re starting to see the consequences of that and pay costs for decisions made long ago. There was a pretty good paper I read [1] that re-evaluated these arguments for several specific large public works projects in the 50s through 70s, where the post-facto costs and outcome benefits calculations were shown to be different by orders of magnitude compared to when the decisions were being debated. IOW there is good historical precedent-based reason not to trust someone who claims the damage will be minimal or equivalent to the case where we put some effort into minimizing it.

[1] https://scholarship.law.georgetown.edu/cgi/viewcontent.cgi?a...