The Austrian Quiz

No, this not a compilation of Schwarzenegger trivia. The smart folks at the Ludwig von Mises Institute have put together a 25 question quiz to test your knowledge of the Austrian School economic framework. Whether or not you agree with the Austrian answers, the questions are useful starting points for anyone trying to understand the interplay between government, economics and society. But be warned... This quiz is not for intellectual girlie men!

Each question in the quiz is followed by an Austrian School answer, a Chicago School answer, a Keynesian-Neoclassical School answer, and a Socialist answer -- all broadly defined. It is these broad definitions and the fundamental questions themselves that provide ample fodder for thoughtful individuals. As an example, here is the first question and the four multiple-choice answers:

1. What is the correct economic status of private property?

1) Property is a naturally arising relationship between human beings and material things. Property and enforceable property rights make possible economic calculation, a wider and more productive division of labor, and therefore increasing levels of prosperity. Indeed, civilization itself is inconceivable in the absence of private property. Any encroachment on property results in loss of freedom and prosperity.

b) Property is at the heart of most serious inequalities and oppressions in modern civilization. Only by regulation, transfer payments, redistribution of property, and common ownership can society arrive at fairness, justice, and human dignity for all.

c) Property is an important component of our social system but its status as a "right" is contingent. It must be subject to regulation and modification for the general good. The state must intervene to prevent abuses of economic power, even at the cost of reducing traditional prerogatives of owners.

d) Property is central to prosperity and economic growth. Accordingly, it is of the utmost importance that the state, or more abstractly the law, maintain and modify the bundle of property rights in such a way as to allocate transactions costs in such a way as to promote maximum growth and economic efficiency. Property does not arise naturally, but is the end product of the legal system.

Thought provoking... In this first question, the progressive liberal social values of my youth still hold sway over me. But in other questions, these are brought face-to-face with my increasing acceptance of more Austrian attitudes toward the role of government in managing the economy. The quiz as a whole is truly exceptional. The questions cut to the heart of the role of government in society and are thus important questions to address for those of us who see that a remaking of American society in the coming decades is inevitable.

For the impatient, the 25 questions of the quiz are listed here. Future postings will address them one at a time.

1. What is the correct economic status of private property?
2. What is the proper method to conduct research in economic science?
3. What is the reason for the interest rate, and should the rate be regulated?
4. What is the economic impact of saving?
5. What is the source of economic value?
6. What is money and how does it originate?
7. What causes the business cycle?
8. What is the right anti-recession policy?
9. How viable is socialism?
10. What is the proper size and scope of government?
11. Who should regulate consumer products and how?
12. What are wages?
13. What causes economic growth?
14. What is your view of economics and the environment?
15. What do taxes fund?
16. What caused the Great Depression and how effective was the New Deal?
17. Do markets create and sustain monopolies and what should be done about it?
18. What is the role of equality and inequality?
19. What is your view of free trade and globalization?
20. What is the function of the stock market?
21. What are labor unions for?
22. What are the economic implications of national defense?
23. What about goods like education and roads?
24. What are the economic implications of warfare?
25. Who serves society best?

Good questions all. I wonder how Arnie would answer?