At what point does profit maximization become unethical? Since demerit goods negatively impact consumers and overall society, is it justifiable for those firms to attempt to maximize revenue? These questions and more are explored in the rising field of addiction economics, exploring economic research focused on evaluating the exploitation of addictive goods in our market, from drugs and alcohol to fast fashion. 

Globally, alcohol and tobacco spending is expected to reach around $2.1 trillion by 2029, with companies like Marlboro and Anheuser-Busch InBev being the top earners. Thanks to their disastrous impacts on individual health and the environment, many have called out these firms for their ethics. In particular, Townsend Harris High School students launched their #QuitLying campaign to call out vape companies for exploiting young addiction-prone teenagers. 

Recently, many have also been calling out the rise in fast fashion, or the rapid production of cheap clothing. While it may not seem conventionally addictive, as new microtrends rise and fall, we often feel obligated to keep up with them, perpetuating a harmful cycle. Although the individual effects on our disposable income may be bad enough, workers and the environment suffer tenfold thanks to this addiction, with less than 2% of garment workers making a living wage. 

The unethical nature of addiction economics has generated backlash for companies that prey on consumer biases and behaviors. To make a difference and send these companies a message, we must call them out and avoid the negative externalities that manifest as a result. 


References

Degenhard. “Global: Total Consumer Spending on Alcohol and Tobacco 2014-2029.” Statista, 16 Jan. 2020, https://www.statista.com/forecasts/1164018/alcohol-and-tobacco-consumer-spending-forecast-in-the-world.

Greenley, Rachel. “Opinion.” The New York Times, 25 Nov. 2022, https://www.nytimes.com/2022/11/25/opinion/warehouse-fastfashion-return.html.

Ross, Emma. “Fast Fashion Getting Faster: A Look at the Unethical Labor Practices Sustaining a Growing Industry.” International Law and Policy Brief, https://studentbriefs.law.gwu.edu/ilpb/2021/10/28/fast-fashion-getting-faster-a-look-at-the-unethical-labor-practices-sustaining-a-growing-industry/. Accessed 8 Nov. 2024.

“Students Call out Tobacco Industry on Quit Lying Day.” Www.Heart.Org, 15 Jan. 2020, https://www.heart.org/en/around-the-aha/students-call-out-tobacco-industry-on-quit-lying-day.