Both political parties have begun to focus greater attention on the growing income inequality in the United States. While there probably are many factors contributing to the inequality, one factor has received relatively little attention: the nature of the U.S. political system encourages increasingly complex regulatory frameworks, which benefit those with more resources to navigate those frameworks. As the frameworks get more complex, the advantage of those with resources increases.
Federal and state legislatures and executive agencies are highly responsive to stakeholder interests. When confronted by stakeholders with competing interests, these institutions try to reach accommodations, which tend to increase complexity, e.g., exceptions and exceptions to exceptions. This complexity by itself benefits those with more resources. Thus, to some extent, the very responsiveness of political institutions inadvertently contributes to inequality.
I suspect that this dynamic, which I term the complexity dialectic, occurs throughout our economy, but I discuss it in this paper with an example from the Digital Millennium Copyright Act.
The DMCA places restrictions on the circumvention of technological measures that control access to copyrighted works or that prevent the infringement of copyrighted works. The initial prohibition proposed by the Clinton Administration in 1995 was a 75-word sentence banning the manufacture of a device whose primary purpose was to circumvent any system that prevents the infringement of a copyrighted work. By the time of its enactment in 1998, this provision ballooned to 4,032 words.
The provision as enacted had a much broader scope than the provision as originally proposed, but some industries succeeded in obtaining comprehensive exceptions. Constituencies with less lobbying power have had to rely instead upon a triennial rulemaking process to gain exemptions from the circumvention prohibition.
The triennial rulemaking has evolved into a complex undertaking that is difficult, if not impossible, for individuals or entities to navigate successfully without retaining counsel. Moreover, the exemptions themselves have grown more complex and more difficult to apply. The average number of words per exemption increased from 17.5 in 2000 to 234.5 in 2013. Additionally, some exemptions are very narrow, resulting in arbitrary and unfair distinctions.
This complexity dialectic can be seen not only in the copyright law, but in all fields. The nature of our political system, with its high level of responsiveness to active stakeholders, virtually ensures this result.