I don’t have to much to say about Roger Kerr now that he’s passed away. I never met him – apparently he was a nice guy, and various people admired his intellectual prowess. It’s worth pointing out that at the beginning of his career, his neo-liberal, extreme-free market views were a respectable and sensible response to the obvious failures of both authoritarian and democratic socialism.
And some of the ideas that came out of the movement Kerr championed were very valuable. You only have to look at the institutional problems we have with our police, military, intelligence and diplomatic corps to recognise the merits of public choice theory. And Kerr played a key role in moving us away from an indiscriminate business subsidy economy.
Of course, the model Kerr championed turned out to fail just as spectacularly as the democratic socialist economy it replaced. The supply-side hypothesis – that the very wealthy would grow the entire economy by investing their excess wealth in productive capital and this additional wealth would ‘trickle down’ – did not eventuate. Turns out the wealthy like to convert their excess wealth into financial products and gamble it in various speculative markets. Instead of economic growth you get destructive bubble-bust cycles. And during the busts, the rich use their political influence to bail themselves out with public money. The model also failed to find market solutions to the economic problems of externality – most famously, the impact of various industries on the environment and public health.
Maybe future intellectuals will find solutions to these problems, and one day we’ll all live in Kerr’s free market utopia. Right now the tendency is for thinkers in Kerr’s tradition to deny that these problems even exist.