I understand better now. When you say "we as a society", do you mean the government? The federal government?
No, not necessarily. Certainly the federal government is the biggest player in setting those rules, but depending on how you look at it, they are really set by a much broader slice of society. The Nasdaq sets up rules like that for stocks to be reported there. We have certain conventions that companies just follow because that's how it has always been done. Employees expect some things and not others. Employers enact their own policies, etc. The rules of the game are vast and complicated network of legal rules, private organization rules, conventions, traditions, expectations, etc.
You want the federal government to establish tens of thousands of rules controlling the behavior of businessmen?
No, the federal government already has tens of thousands of rules controlling the behavior of businessmen. I want them to be less skewed to favor owners over workers.
To be clear though, there isn't really a "don't make a rule" option in most these cases. For example, take the question of how corporations report expenditures on capital equipment. Right now the rule is that you have to record the cost spread across the years it is likely to be used. That is that way because otherwise you could just buy the number of widgets you'll sell in 5 years in year 1 and count it all in year 1. It would look terrible for you year 1, but then years 2-5 you would look radically more profitable than you are. So, the federal government says everybody needs to count it across all 5 of those years. If nobody made the rule, even the stock exchanges, then each company would just do it differently. In effect, the "rule" would be "each company can count expenses however they like". That wouldn't be good for anybody because investors couldn't put any weight on the numbers and companies couldn't signal investors that they were actually, really, doing well because there would be tons of companies faking it. So then auditing agencies or stock exchanges would come up with rules, but they would differ, so at least for non-professional investors, it would be a pretty useless system. You can say that the investor could just ask what rule they were using, but remember there are 10s or even 100s of thousands of rules like that. You'd need a Phd. and tons of time to dedicate to figuring it all out. So, better to just have one standardized system for that.
Now, other kinds of rules are better left to cultural norms or convention. For example, that the employer reimburses meal expenses, but not booze that you consume, when you travel for work is probably the norm. But what rule is optimal varies from company to company, situation to situation and position to position. For example, maybe a sales guy taking a customer out for drinks at one company should be reimbursed for the booze and maybe in another situation an employee that is traveling to one location for nine months for work shouldn't be able to expense every meal at another company. And it's ok in that situation to have them vary from company to company because it isn't that hard for an employee to learn the policy of their one employer and that's all that really needs to know.
So, different rules are optimally set at different levels.
eace
