Comment by robocat

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.