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Diseconomies of scale in fraud, spam, support, and moderation

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Re: Diseconomies of scale in fraud, spam, support, and moderation

#171

Post by mschuster91 »

BrenBarn wrote: post #139
jakewins wrote: post #132

Earlier quoted context omitted.

> In the sense of benefit to the overall economy, to the society in which that economy sits, or to humanity in general, virtually all economies of scale are actually harmful You had me until here. Economies of scale in commodities is the thing that makes it so we don’t have to do sustenance farming and everyone gets to have sewn clothes on :) There’s truth in both sides there - we want nail production to not be done…

I guess I forgot to repeat the part about "extremely large" there. But I mean like "all economies of scale beyond a certain point". In any case, I'm not sure I agree that economies of scale are the thing keeping food on the table. Like, yes, we want nails to be made in some efficient way, but that's not what I mean by "economies of scale". What I'm talking about is the size of the companies involved. If there are 10…

> If there are 10 factories making nails, I'd rather have them be run by 10 different companies than one. And you might be able to convince me that 9 or 8 or even 5 companies is reasonable, but not one or two.

Well, a nail is fungible, as are many other products. So what you'll end up with instead is a bad situation on its own.

The 10 nail factories win sales contracts by competing on price (obviously), so there is a massive incentive for the companies to undercut each other by going offshore, exploiting their staff (which usually leads to an enshittification across the industry), exploiting the environment (by "saving" on emission mitigation or outright handing waste over to the mafia instead of recycling) or by cutting corners in the process (water down the material composition with cheaper raw materials or be less strict in outgoing QA and hope the customer doesn't notice). In the end you have 10 companies shipping crap nails but since they were so much cheaper than what was there before, there are no high quality nails on the market, and no bank will give anyone a loan to try and start up a company selling high quality nails.

We've seen that happening quite often over the last decades... UK and German public transport where the "private" competitors have reduced staff and maintenance to the utter bare minimum, "chinesium" being so widespread it's a legitimate meme, or by Europe being completely dependent on India and China for basic pharmaceutical compounds.

In contrast, a government controlled (or outright owned!) monopolist has entirely different priorities, and the customers/citizens will get high quality products again.

Re: Diseconomies of scale in fraud, spam, support, and moderation

#172

Post by Const-me »

AnthonyMouse wrote: post #169
jakewins wrote: post #132

Earlier quoted context omitted.

> In the sense of benefit to the overall economy, to the society in which that economy sits, or to humanity in general, virtually all economies of scale are actually harmful You had me until here. Economies of scale in commodities is the thing that makes it so we don’t have to do sustenance farming and everyone gets to have sewn clothes on :) There’s truth in both sides there - we want nail production to not be done…

> Economies of scale in commodities is the thing that makes it so we don’t have to do sustenance farming and everyone gets to have sewn clothes on :) There are really two different kinds of economies of scale. One is the one you ordinarily think of, where you're big enough to amortize certain fixed costs over a lot of units so the fixed costs become a small part of the price. But the scale you need for this isn't all…

I agree in general, but note some industries are exceptions from that rule.

For example, for Boeing and Airbus these two scales are pretty close because modern airliners are very expensive per unit, and fixed R&D and tooling costs are sky high. Another example is TSMC.

However, none of that applies to internet search, social networks, web services, and most other goods and services.

Re: Diseconomies of scale in fraud, spam, support, and moderation

#173

Post by hnben »

jonathanlydall wrote: post #110

The problem with internet fraud is that no one is really trying to make the fraudsters accountable for their actions, instead what they’re doing is essentially “shoo’ing them away”, and fraudsters after being shoo’ed away simply try again until they, almost invariably, eventually do succeed. Subsequently, the industry of fraud is generally lucrative and is thus constantly growing. When I worked at Blizzard, there wer…

> but there was no process for reporting the fraudsters

what would be good incentives to make companies like blizzard start reporting fraudsters?

I am thinking along the line: companies can pay $X to make a report, and will receive $X5 if that reports leads to a fine. And they have to pay additional $X10 if that reports turns out to be frivolous. (If the report appears to be valid, but doesn't result in a fine, than they get no payoff).

My worry is that bad incentives would lead to over-reporting or some other bad thing.

Re: Diseconomies of scale in fraud, spam, support, and moderation

#174

Post by hyperpape »

no_wizard wrote: post #2

What all this says to me, in total, is that greater competition where you have a bunch of potentially medium sized companies or smaller but no clear massive (50%+ market share) leader that power can’t congregate means they have both incentive to provide a better experience and having multiple targets makes it harder on negative actors, effectively. Thats my takeaway here is that we should as a matter of regulation /…

Worth noting that by market cap, Twitter is 20-30x less valuable than Facebook.

Re: Diseconomies of scale in fraud, spam, support, and moderation

#175

Post by Anotheroneagain »

ric2b wrote: post #160
kombookcha wrote: post #148

Earlier quoted context omitted.

You're framing the above poster as an anarcho-primitivist for saying that we would be better off with 5 global conglomerates controlling t-shirt production than 2. I don't think obfuscating "there is a dropoff point in size where economies of scale stop being better for humanity and start getting worse" with "we must switch to artisinal backyard t-shirt making" is really steelmanning here.

The poster is against oligopolies but is using the term "economy of scale" instead, which is incorrect and causes confusion.

I wasn't talking about "oligopolies". I was saying that economies of scale doesn't imply that bigger is better, but there is an optimal size that may not really be that big for most kinds of business.

Re: Diseconomies of scale in fraud, spam, support, and moderation

#176

Post by holigot »

jph00 wrote: post #137
bongodongobob wrote: post #119

Earlier quoted context omitted.

Well what can you do? Trace their IP back to a VPN or web of proxies? Or more likely grandmas infected Windows XP computer? Then what? Start kicking doors down? Going to get the FBI involved for a $20 purchase? Reminds me of Lebowski asking the cops about his Credence tape.

When I was at FastMail I did a lot of very manual work to not just block spammers and other abusers, but to make their life as difficult as possible. That included figuring out how to notify the people running the servers they used (including sometimes finding the IRC chat for the folks on that server and telling them they had an intruder). One of my favorite things was to redirect bounce messages that were targeted…

Thx for this detailed feedback.

Is there any reason why you did change mail away from Fastmail after such a long time and now use Google as Mailserver?

Re: Diseconomies of scale in fraud, spam, support, and moderation

#177

Post by EchoChamberMan »

BrenBarn wrote: post #128

I think the post underestimates the scope of these problems. It touches on it briefly, but I've mostly come to believe that it is in general bad for companies to become extremely large. It's not just an issue of content moderation. One reason that the article does touch on is the detachment from support. Large companies no longer need to care about the individual consumer, so they stop doing so. A sort of corollary f…

Competition and other things are supposed to keep company size down, but these days companies just buy their competitors and squash them.

Re: Diseconomies of scale in fraud, spam, support, and moderation

#178

Post by simpaticoder »

BrenBarn wrote: post #128

I think the post underestimates the scope of these problems. It touches on it briefly, but I've mostly come to believe that it is in general bad for companies to become extremely large. It's not just an issue of content moderation. One reason that the article does touch on is the detachment from support. Large companies no longer need to care about the individual consumer, so they stop doing so. A sort of corollary f…

> it is in general bad for companies to become extremely large.

The core idea of your post is "moral hazard"[0], which describes a state where you are divorced from the consequence of your decision. Your idea also uses the intuition that the risk of moral hazard grows quickly with the scale of human endeavor, and reaches ~1 at a certain size. Moral hazard encompasses both the harm you do to others directly, as with missing or malicious support, and the indirect harm you do, as with externalities like pollution or depressing a local economy.

I personally think your intuition is obviously correct.

Moral hazard disconnects the social corrective circuitry present in small human groups like families or villages, but it also enables the creation and accumulation of vast wealth. This problem is known in philosophical circles as "The Problem of Dirty Hands"[1].

0 - https://en.wikipedia.org/wiki/Moral_hazard

1 - https://plato.stanford.edu/entries/dirty-hands/

Re: Diseconomies of scale in fraud, spam, support, and moderation

#179

Post by lotsofpulp »

Nursie wrote: post #126
lotsofpulp wrote: post #120

Earlier quoted context omitted.

I specifically wrote why know your customer laws are bad. A law that makes a bank liable for their customer’s illegal actions harms people who kind of sort of look like they could be doing something illegal, even if they are innocent. Plainly discriminatory. A law that makes hotels liable for human trafficking harms people who “look” like human traffickers. Guess what, now people who want to pay with cash or don’t ha…

If you sell something to the public, you must abide by certain regulations. A law that says "Amazon must know their sellers and be able to pass the consumer on to those sellers, or it is liable itself as a backstop" might indeed shut some people out of Amazon's marketplace who cannot comply. But those people would not be allowed to legally retail to the public anyway, as they couldn't fulfil those requirements > The…

A business is someone. And KYC should just be the government providing an identify verification API so that in the event there is a problem, the government knows who to go after.

Government leaders just want to be able to point fingers at as many people as possible with KYC laws (which do more than just require the business to verify who they are doing business with).

A business should know who they are transacting with, but a business should not be vetting them for illegal activities. That is a job for courts. Businesses can even be required to report who buys what and how much (for example, bulk supplies to make methamphetimine or explosives), but the business should not be using nebulous heuristics such as credit score or income or other non illegal things to figure out who may or may not be a criminal.

Last example, the US government should require online marketplaces to know who they are doing business with, and it should be someone within US jurisdiction. The US government should also provide the online marketplaces with an identity verification API to do this. So when a product sold on Amazon causes a problem, it should be easily possible for the government to charge the seller with a crime, and dole out an appropriate punishment.

Re: Diseconomies of scale in fraud, spam, support, and moderation

#180

Post by nradov »

palmfacehn wrote: post #115
jonathanlydall wrote: post #110

The problem with internet fraud is that no one is really trying to make the fraudsters accountable for their actions, instead what they’re doing is essentially “shoo’ing them away”, and fraudsters after being shoo’ed away simply try again until they, almost invariably, eventually do succeed. Subsequently, the industry of fraud is generally lucrative and is thus constantly growing. When I worked at Blizzard, there wer…

From the article: >And if I ask who do I trust more, my local reputable electronics shop (Memory Express, B&H Photo, etc.), I trust my local reputable electronics shop more. Not only are they less likely to sell me a counterfeit than Best Buy, in the event that they do sell me a counterfeit, the service is likely to be better. An international, multi-government taskforce is one solution, potentially. Maybe not. For t…

An international, multi-goverment task force is no solution for the routine wire fraud that impacts most consumers. Due to corruption, incompetence, and political disputes, the countries where most of that fraud originates won't participate in a meaningful way.
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