This article falls into the common pitfall of over rationalizing "the market". It's true that from first principles you don't want to establish the bureaucratic apparatus it would take to effectively eliminate all forms of fraud, this is the intuition most people tap into when they say "you can't catch every crime". This is in fact not a surprising observation, most people just understand it as common sense. It's also not the main motivating factor driving the enforcement of monetary fraud prevention.
The monetary system doesn't care about fraud. Banks, credit card companies, and the rest of the financial sector make money from transactions, with no regard for who spends the money, who owns it, or if the transaction was legitimate. Bad actors need banking too, and their transactions are just as valuable as the ones your grandmother makes.
Here we find the sharp divide that fraud controls try to bridge. The social cost of fraud is extremely high. Yet the proportional value, defined in a capitalist sense, of fraud is close to 1. A transaction that happens to be fraud is almost if not as valuable as a transaction that happens to be legitimate. For a bank, the optimal amount of fraud is not just non-zero, it's basically as much as possible.
The monetary system doesn't care about fraud. Banks, credit card companies, and the rest of the financial sector make money from transactions, with no regard for who spends the money, who owns it, or if the transaction was legitimate. Bad actors need banking too, and their transactions are just as valuable as the ones your grandmother makes.
Here we find the sharp divide that fraud controls try to bridge. The social cost of fraud is extremely high. Yet the proportional value, defined in a capitalist sense, of fraud is close to 1. A transaction that happens to be fraud is almost if not as valuable as a transaction that happens to be legitimate. For a bank, the optimal amount of fraud is not just non-zero, it's basically as much as possible.