How Austrian Are You?

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An economics quiz, from the Ludvig von Mises Institute (link via Charles Oliver).

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  1. I made it all the way through three questions.

    “Good things, when short, are twice as good. “

  2. David Friedman explains why he thinks “the test does very poor job of representing the Chicago position” at:

    http://www.no-treason.com/comments.php?id=510_0_1_0_C

    Robert Murphy, who prepared three of the test questions, responds here:

    http://www.no-treason.com/comments.php?id=514_0_1_0_C

  3. 97…hot damn that’s pretty good

  4. What a great quiz … it’s too bad this level of debate will never make it into mainstream political discourse. I would LOVE to hear candidates for office debating whether the Chicago answer is better than the Austrian answer or the Keynesian answer … but reasoned debate is not something the political class takes to well.

  5. I got an 82, with all of my “wrong” answers in the Chicago school.

  6. ditto to Phil. wouldn’t that be great. I showed some Chicago influence in an otherwise impeccable Austrian pedigree, breaking on unions and national defense issues. (no surprise to me.) I’ve found it sad that high schools teach psychology instead of economics, which seems to be a cause of many problems.

  7. Agreed rob, three for me, too.

  8. 73, all wrong answers Chicago School, except for one neoclassical answer related to the inability of the market to form military organizations. Nertz.

    Guess I’m a damn NeoCon co-conspirator, and had better go post over at Daniel Drezner or some other intellectually deficient commie pinko bastard site.

    Of course, they didn’t ask any questions about social security / safety nets – which ueber-Austrian Friedrich Hayek favored. Wonder how I’d have come out on that one…

  9. 67…all my answers not making me austrian made me a chitown-man…….still a good thing…uncle miltie

  10. I scored 100. But then again I read the Mises site daily and have tried to read Human Action as well as a few other of his books online. So I guess something did sink in after all.

  11. I scored really low!

  12. Me too!

  13. Ditto! Weird…

  14. Me four, and my name is on the damn thing.

  15. what you mo’fos smoken? I got 100%. You must all be neocon scum!

  16. 75% with strong Chicago leanings.

    For me, I can’t get over the notion that the government should be involved in the prevention of fraud, or, similarly, that markets function better when information is more accurate and plentiful.

    It is a step that Ludwig asks of me often, but I can’t seem to take it. I don’t feel too bad, Milton Friedman couldn’t, either.

  17. I scored 97% – I took the Objectivist view on Unions – they are a form of voluntary association – and got scored down for that.
    Anyone who wants to read up on Austrian economics can buy books from http://www.renbook.com

  18. 78% with strong Chicago leanings. I’m with Jason on the fraud protection and plentiful information.

  19. I did the test twice, once posing as an Austrian, once as a Chicagoite (or whatever). I failed of perfect scores because I accidentally marked the wrong circles, once on each quiz.

    I haven’t read Friedman’s critique yet. One glaring point is that often it is testing for anarchist/minarchist rather than Austrian/Chicago. But Friedman is an anarchist, and most of the prominent Austrian economists (Mises, Hazlitt, Hayek) were not anarchists.

  20. I would also confess to not having a good grasp (though I’ve read it several times) of how the Austrians and (apparently, though not if you read David Friedman’s critique) the Chicagonians can exclude expectations from the business cycle and stock market analysis. That seems to be like talking about the horse and buggy without talking about the horse.

  21. 87 here…lovely lovely quiz

  22. 94%. Lost marks on national defence, unions, & roads. I guess they don’t like minarchists.

    The Marxist answers were pretty blatantly idiotic. I don’t know whether this says more about the writer or about Marx.

    I’m tempted to devise a new drinking game, where one must sit through a lecture on Classical Marxism and take a shot whenever one hears the words “worker”, “labour”, “class” or “exploit”.

  23. 82 here. I agree with the above statements by Jason Ligon and Russ. Any attempt to impose Rothbardian private security agencies in lieu of government would quickly degenerate into some form of feudalism or mob rule. I can just see the discussion. “What you don’t want to use our protection services?” “You see you could lose some kneecaps if you refuse our friendship, now do you understand”

    Somewhat tangentially, my other deviation from Austrian orthodoxy is the gold standard. All money is commodity money in the sense that I can trade it for commodities and hold on to it in the face of governmental inflation. Gold simply holding its value better and is more liquid than say pork bellies. And best of all, currently, I don’t need the government’s permission to hold onto these commodiites. The real enemy is fractional reserve banking and the government’s easy money policies. In the end I don’t think it matters much what the money is, governments will find a way to debase the currency whether it is by shaving edges off of gold coins or lowering intrest rates.

  24. I enjoyed the quiz, maybe because I took the Reader’s Digest (10 question) version. Hey, I’m at work, I gotta look busy!

    Scored a 95%, so not too bad.

  25. I think Charles Oliver said it best on his blog, the Qustion should have been, HOW ROTHBARDIAN ARE YOU?

  26. Ummm… some of the answers are not mutually exclusive.
    In particular in regards to interest rates and money.

    Or the taxes question – it’s really a matter of degree.

    Or the Great Depression question – not only very lacking in potential choices but each choice confounds several different theories. I grudgingly answered d, although there are several statements in that question I disagree with.

    Or on trade – A and D could both be right (though D misrepresents the role of WTO somewhat)
    etc.
    etc.
    etc.

    Or on saving – calling D the Chicago answer is pretty sloppy. No Chicago school economist would argue that encouraging saving is desirable of itself.

    Furthermore, the questions on economic growth and business cycle fail to include standard neo-classical/new-classical answers, as in:

    business cycles caused by technological shocks which are then amplified through labor decisions and possibly sticky prices (last one if you’re of new keynesian variaty)

    economic growth is caused by accumulation of physical and human capital as well as technological progress, the rate of which might very well depend on the extent of the market

    Anyways,
    I got 63 outta 100 with 6 Austrian, 1 Keynesian and rest Chicago.
    I realize it’s difficult to write a decent quiz of this sort but it seems to me the honorable folks at LvMI (God Bless Them, and God Bless Auburn, AL, my alma matter) know more about Austrian economics then they do about other schools. As should be expected.

    radek

  27. “Somewhat tangentially, my other deviation from Austrian orthodoxy is the gold standard. All money is commodity money in the sense that I can trade it for commodities and hold on to it in the face of governmental inflation. Gold simply holding its value better and is more liquid than say pork bellies. And best of all, currently, I don’t need the government’s permission to hold onto these commodiites. The real enemy is fractional reserve banking and the government’s easy money policies. In the end I don’t think it matters much what the money is, governments will find a way to debase the currency whether it is by shaving edges off of gold coins or lowering intrest rates.”

    Shadow,

    My thoughts exactly. The Rothbardian position that gold leads to no inflation is a misrepresentation. Gold leads to inflation in relation to the international value of gold. Someone else can hoard or dump you into poverty, and, as you pointed out, there is just as likely to be hanky panky with the relationship between actual gold stores and paper as there is to be hanky panky with the amount of paper in a fiat money scenario.

    The argument, it seems to me, should be for disciplined oversight of money, not for some fanciful notion that commodity prices are immune to manipulation.

  28. statist neocon slime!

  29. A few thoughts:

    As has already been mentioned, this is not
    really an Austrian quiz but rather a LVM/
    Rothbard quiz. Both were smart gents but
    Hayek and Schumpeter were far better
    economists.

    Also, it seems odd to me to define a school
    of economics in terms of policy positions
    rather than methodology. As I read it, there
    were 24 questions about policy positions and
    one about methods. There should have just
    been the one. That said, Austrians are
    people who think that all you need to know
    is the sign of an effect, and that theory
    always predicts the sign. Both are false,
    which is why you have to do some empirical
    work (and which is why Austrians are marginal
    – pun fully intended – in the profession).

    If there are any bright undergrads out there
    thinking of going down the Austrian path –
    do not do it. Get a neoclassical doctorate
    and save the Austrian stuff for after tenure.
    You’ll be a much better Austrian if you
    actually understand the neoclassical position
    and you will get a much better job.

    Jeff

  30. “Somewhat tangentially, my other deviation from Austrian orthodoxy is the gold standard.”

    Actually, most Austrians are for market money. Whatever comes out of the result of the market is perfectly acceptable to Austrians. They just expect it to be gold and silver because that’s what usually comes out of the market.

    There are some who want a state-enforced gold standard, but that’s not prevalent in Austrian economics.

    “All money is commodity money in the sense that I can trade it for commodities and hold on to it in the face of governmental inflation. Gold simply holding its value better and is more liquid than say pork bellies.”

    Sure, Austrians don’t claim any differently.

    “And best of all, currently, I don’t need the government’s permission to hold onto these commodiites. The real enemy is fractional reserve banking and the government’s easy money policies.”

    Fiat money and fractional reserve go hand-in-glove. If the money’s value is defined by the state, the state can redefine it at will.

    “In the end I don’t think it matters much what the money is, governments will find a way to debase the currency whether it is by shaving edges off of gold coins or lowering intrest rates.”

    Pretty much.

    – Josh

  31. I didn’t even finish the third question. None of the statements about interest was acceptable to me.

    I fully accept that time preference as a phenomenon exists. I just don’t think it’s the dominant factor in determining interest rates in “actually existing capitalism.” Too bad there wasn’t an answer along the lines of “Interest is primarily a monopoly charge on access to credit, made possible by government interventions like legal tender laws, capitalisation requirements and licensing for banks, and other entry barriers. To the extent that it reflects the secondary factor of time-preference, its steepness is affected by historical factors like the distribution of property and the extent of labor’s access to the means of subsistence and production.”

  32. In answer to the person who claims Mises would have done badly on this quiz:

    I just took the quiz — not as myself, but as Mises. (I.e., I just tried to answer as my familiarity with his works tells me he would have done.)

    He scores a 92, although at times, such as #1, #15 and #17, he was unhappy with any answer.

    He clearly gets a few “wrong,” such as #10 and #22.

    I don’t understand the person who complained that the “right” answer is always Austrian! The quiz was CALLED “How Austrian Are You?” not “How Right Are You?”

    Naturally, in a quiz to determine how Austrian you are, an Austrian answer scores highest!

    All that being said, some of the answers are clearly anarcho-capitalist rather than Austrian answers, e.g., the ones that “Mises” got wrong.

  33. I’m not an economist, at all. Never even taken a class, though I do read politics/economics arguments in other contexts. So I was interested to find out which theories/ideas percolated to my brain (however they got there). I took the short form, as the long form had a whole bunch of questions I had never even thought to contemplate before. Got a 28: all Keynes / Chicago.

    I gotta go read some Austrian stuff, just to find out what I’m missing. It sounds like some crazy-ass shit to me, but I try to be open-minded.

  34. tested, scored and posted yesterday _3:20 pm. with no statement of anything of regarding ecomonic intellect……

    this post is just to say how much i am enjoying and appreciative to all for these stimulating echanges/banter….

    so just a note of thanks folks ….
    are there other sites that any of you may beare familiar with that center on these type of econ-disscussions or such…???.

    ted

  35. “be” i/o beare

  36. Kent,
    if you want to read something about Austrian economics that is easy to get into for the layman and is an entertaining read, then go for Gene Callahan’s book “Economics For Real People”. It is the best introduction there is to austrian economics.

    Best

    Daniel

  37. This is a more balanced crew than some Threads on the Austrian Quiz. For the record, I got a 60. I found all answers to be too extreme in each case, trying to span the entire spectrum of each school of thought. There should have been 100 questions of great specification. It was a Quiz directed towards highlighting detortion. lgl

  38. I got a 78, and I was slightly above half Austrian answers and half Chicago answers. I really don’t agree with their basic methodology as announced in #2. They say:

    “The economist should not mimic the behavior of the natural scientists, because the social sciences involve human beings. Human action is characterized by intentional behavior, which involves the rational use of means to achieve desired ends. The very subject matter of economics-capital goods, money, wage rates, etc.-is not defined by physical or chemical properties, but instead by the mental or subjective attitudes that human minds take toward these things. Consequently, the proper method for an economist is to start with self-evident axioms-such as that people try to achieve the highest satisfaction at the lowest cost-and logically deduce conclusions from them.”

    I really can’t think of a better way to never find out if your ‘self-evident’ axioms might be wrong. This is the same mistake that Marxism makes, though I will admit that Marx chooses a lot less plausible ‘self-evident’ axioms.

  39. Most of the disagreements here seem to be between the Chicago and Austrian schools. I recommend this lecture by Hans-Hermann Hoppe, which explains the differences in methodology — i.e. what kind of science is economics, empirical (the Chicago view) or logical-deductive (the Austrian view):

    The Austrian Method: Praxeology (2001)
    http://www.mises.org/mp3/MU2001/MU08.mp3

    Another superb lecture by Hoppe discusses the two schools’ very different views on ethics or law:

    Law and Economics (2003)
    http://www.mises.org/mp3/MU2003/MU03-Hoppe-3.mp3

    In that lecture, he calls the Chicago view the greatest threat to property rights since the demise of communism. Sounds over the top, but he makes a convincing case.

    Both of these are linked from http://www.mises.org/audio.asp

  40. Someone said, “Any attempt to impose Rothbardian private security agencies in lieu of government would quickly degenerate into some form of feudalism or mob rule. I can just see the discussion. “What you don’t want to use our protection services?” “You see you could lose some kneecaps if you refuse our friendship, now do you understand”

    So, we should keep it in the hands of forcible government because they won’t force me to accept their protection?

  41. Great quiz, makes you think. 70/100 with mostly Chicago differences and one Keynesian thrown in.

    As much as it is looking for a correlation to Austrian thinking, the quiz also shows up where your own thoughts are taking you. John Mahler’s comments in the previous post are very true. However I do believe there is a role for some government as a organisational element. Trouble is all governments ultimately grow and tend towards socalist ideals. It is their destiny imho. So on that basis they must be, as John points out, kept on a very short leash otherwise we are going to get burnt.

    For those of you interested in the Japanese experience of central banking and government intervention I can highly recommend “Princes of the Yen” by Richard Werner. You thought the Fed was bad…

  42. Hello,

    I am not an economist, in fact, I took only one course that discussed economics.

    I scored 82 out of 100
    16 Austrian
    9 Chicago

    #3, and #7 (Chicago) Honestly,lacking a firm foundation in economics, I answered as best i could. Irnoically, The answer I answered and the Austrian answer were the two I contemplated the most. It was ignorance on the particular subject matter, not philosophy that dictated my response.

    #10, I was lookinhg for somthing in between A and D. …

    #17 were similar to #10. But between C and D. Furthermore, my lack of education may have lead to incorrect definition to certain unformiliar terms.

    #18, I incorrectly marked the one answer, the answer I intended to answer was Austrian. So, Perhaps my score should be readjusted to 86???

    #20, I believe “D” is correct,… It seems to me that some sort of assurances that all is reveal and nothing is withheld is a fair proposition. Neither will, IMHO, harm the economy.

    #21 (Labor Unions)I think “B” was quite fair assesment of labor Unions. There’s a delicate balance here.

    #22: I don’t think I can agree with an “Austrian” on this one. “A” sems to be the most accurate of the purpose of War and national defense.

    #25: Erg, I was doing pretty good doing the 25 questions…. couldn’t think anymore. LOL Still, answered like a good Chicagoan..LOL hey i live in Chicago…LOL

    Love to hear some feedback…

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