Skip to main content

Complexity of Challenges and Increasing Degradation of Capabilities

While reading some paperwork regarding International Tax Law subject following statement drew my attention:

"The complexity of the international tax rules makes it nearly impossible to diffuse the public sensibility about the issues."

It is from the speech "Sense and Sensibility: The Policy and Politics of BEPS" by Manal S. Corwin. 

The full text can be found here:

That thought is not unique to tax law. In my experience of more than 3 years doing what I call “applied dispute resolution” which correlates with law research and paralegal activities I see that in any area of law, social matters, environmental, humanities, economics and others we can witness increasing level of challenges that our society face.

Let’s take as an example The Law.

Carefully crafted legal framework is one of the essentials of contemporary society. However what we see is:

- Growing complexity of legal system. Even some regular activities that are related to private or common property and should be easily resolved take 
a) law specialists, because legislation and common law in those areas are so tangled that usually people don’t take any action at all even if they are right; 
b) time and effort incompatible with the perceived risk of uncertainty when dealing with matters regarding property, rights and wrong doings.

- Growing costs of people who interpret the law to others and of the whole justice system. As a consequence we are getting increased entry level to achieve so-called justice.

- Increasing number of issues that current legal system cannot resolve at all in the current state of affairs within the society.

- Too much interpretation is required, because laws and their implementation are complicated. 
If there is a dispute during any social interaction there is a couple of options:

i) come up with an agreement that suits all parties without getting to legal system
ii) get to legal system as an authority to help resolving the problem

Agreement is impossible in situations when all parties keep their positions tightly. If responsibility is higher than minimal, i.e. involves large sums of money or big effort to undertake – responsible party will avoid agreement at all and make everything necessary to extend the period allowed to act responsibly in a hope that other parties would give up.
In this case the winning party is the one with more strength, ruthlessness, financial and human resources, courage and network with various other entities including government agencies. Therefore in majority of potential cases that should be resolved by legal system people or companies who feel oppressed and bullied by others don’t do anything and just accept the situation as is. This approach doesn't improve either their lifestyle or the society in general and is simply wrong.

Consider a couple of examples.

Some government agency allegedly breaches legislation. All the legal research is done by affected party and documents supplied to the agency with explanation of why the legislation considered breached in that case with references to statutes etc. Response from the government agency is: we did everything right if you think otherwise go to the court. Court process was estimated to come up around $12000-20000 without limit, which straight away puts the offended party into a position where legal system bestowed upon us is not an option at all.

Another matter is relevant to the situation when damage is done to the property and is documented, but the legislation does cover the wrongdoer from any charge or makes the procedure too expensive and complicated for the damaged party to try and get remedy. A residential tenant caused water damage to the unit below the one he occupied. It was pointed out to him in person and he agreed that it’s his fault. The damage was reported straight away with photos to the strata manager of the owners corporation and to the member of executive committee and the notification was forwarded to the tenant’s agent. The tenant’s agent agreed in writing to recover the damage and costs involved. Three days after the tenant’s agent changed the mind and said that the tenant is refusing that it’s his fault, that the owner of the unit below lied before and that they are going to fight. After careful review of the situation the owners corporation strata manager suggested that it will be almost impossible to get the remedy from the tenant, because of existing laws and that it would take more money and time to try and chase up the tenant than to just rectify the problem at owners corporation cost (all owners).

The other type of matters arises from strata living in Australia. At the moment there is more than 3 million people live in strata schemes across the country which is more than 10% of population, but from experience it looks like only a few understand legislation in that area. This is not because the rules are wrong or not effective – the rules are complex but the level of understanding is low. 
Problems of complexity that is higher than changing the light globes take months and years to resolve!

It’s just a couple of examples out of multitude of others I had a chance to work with in the recent past.

Imminent growth of issues complexity is faced by indefensible decrease in people's understanding of the issues and ability to resolve them.


  1. Nice article.
    I think the problem is the laws/rules are made complex so that it cannot be understood by a common person.

    1. Well I have been thinking about this for a while and in my opinion the laws are not made complex so it "cannot be understood". The laws represent the nature of our social collaboration and relationships. Which means the laws just reflect the complexity of our nature. Therefore if we follow this complexity by just implementing mere representation of it in a legal case or statute or in the legal process we inevitably increase complexity. However I shall admit that there is a level of intervention into the natural process by people who would like to make this even more complex :)
      Our life is getting busier every day and we just physically don't have an opportunity to catch up with that complexity unless we quickly close that gap somehow. By increasing our potential as humans, by spending more time doing intellectual work and not just work for biologically necessary things.


Post a Comment

Popular posts from this blog

Energy Business Case - Coal Mine in West Virginia

Situation Coal in Africa: An opportunity is available to invest in a coal mine in West Virginia. The mine’s value is less than in past years because of actual and anticipated restrictions on coal-fired power generation in the United States. However, the mine has a chance to sell its coal on contract to a public utility in West Africa. The utility is working through the World Bank for financing to build a number of coal-fired power plants. If they obtain World Bank financing, then a customer for the coal mine is assured, at least for the duration of the contracts. The power plants will employ the best current technology for burning coal, which exceeds all current air quality standards for the region. However, the power plants will not be designed to attempt carbon capture. The area of Africa the plants will serve suffers from extreme energy poverty, with some of the lowest per capita energy consumption in the world.

Overview of the Region West Africa is the westernmost region …

Energy Market Analysis - Coal Reserves for Decade Ending 2012 and Price Forecast

According to the British Petroleum Statistical Review of World Energy, 2013, global coal reserves declined in the decade ending 2012:

Figure 1. Proved coal reserves.

Proved reserves of coal are generally taken to be those quantities that geological and engineering information indicates with reasonable certainly can be recovered in the future from known deposits under existing economic and operating conditions.

If we look at supply and demand factors in the decline, we can see that:

a) Coal price has grown significantly in the decade ending 20121:

  Figure 2. Prices in US Dollars per tonne.

b) Coal consumption has also grown significantly worldwide2:

Figure 3. Coal consumption by region.

c) The price of substitutes (i.e. Natural Gas) has also grown. Not so in North America though, but if we look at the world trend it is growing3:

Figure 4. Natural gas prices.

Therefore if the rule of supply and demand worked we would see increase in proved reserves for coal, because increase in dem…

Wine - Castello del Poggio Moscato Provincia di Pavia

Awesome wine. Sweet with notes of pear, caramel, apricot.

Some details