Patio11's soundbite as often shared puts the cart before the horse.
He says that the "optimal amount of fraud is non-zero" as if allowing some fraud is necessary for society to function. But what he actually means is that since not all fraud is prosecuted and prevented, allowing some fraud is just the price we pay for actually getting things done.
Take the analogy of food processing. It is accepted that some small percentage of ground coffee will be insect or rodent remains and their feces. It's not like making ground coffee requires animal remains and feces.
I read Patio11's soundbite to mean that ground coffee requires animal remains and feces.
> The law of diminishing returns is not natural law - it is just an observation of something that happens in practice but not always. E.g., people often choose to spend time and treasure treating an incurable cancer or send the Coast Guard to search for five people in a submersible.
Most of the time we choose to value human life at approximately infinity (especially our own lives!). When one side of the equation is near-infinite, it makes sense to keep going long after the curve has begun to flatten, but that doesn't prove that returns don't diminish, just that the value of the goal is extremely high.
Diminishing returns isn't a natural law in its own right, but it's the direct result of natural laws. It has its parallels in half lives, in the inverse square law, and in basic probability theory. While the probability of something is high, it's easy to find and eliminate because random chance is on your side. When it becomes lower, random chance starts to work against you.
