Alcoholism on Indian reserves in the United States has been a chronic and devastating problem for the Native American community. According to a report last year by the Centers for Disease Control, Native Americans report more binge drinking episodes per month and higher alcohol consumption per episode than other races.
Now, one Native American tribe is suing leading beer companies for US$500 million for contributing to alcoholism rates in reserves. In an online debate of the merits of the tribe’s claims, Waheed Hussain, Wharton assistant professor of legal studies and business ethics, argues that “when companies are not paying the full social costs of their activities, they have a special responsibility to mitigate the damage that they do.”
If businesses make profits at an expense to all, it’s not the type of economic activity that lives up to the spirit of free commerce, Hussain adds. “Businesses don’t always pay the full social cost. A manufacturer might cause pollution but not pay to clean it up. A bank might create financial risks, but leave the fallout to the rest of us. When businesses do not pay the full social cost, their activities might actually detract from social prosperity rather than contribute to it.”
Read his full argument here: http://nyti.ms/Mo6Jyl