Mr. Kling is so disappointed in the Austrian Test that he has named the Austrian School a “sect”. His fundamental criticism is this: “I found it interesting that the ‘Are you an Austrian?’ quiz does not distinguish between knowledge of doctrine and belief in doctrine.”
Now, the questions are not tricky; in fact, they are very simple and address basic material. They do not ask you if you believe that interest is phenomena, which results from value spreads. They ask you, if you consider this statement scientifically true. They do not ask: what do you believe the economic impact of savings is. Rather they ask: is it true that savings leads to more investment. It’s not a question of belief, but a question of scientific validity, that is, which answers, in your opinion, can be argued for in a logical manner.
This takes us to the heart of Austrian theory. Our opponents think that the most important contribution of the Austrian School is that it sees the market as a “process” and gives cheers for private property. However, in my opinion, the more important issue concerns methodology. What is the proper method for examining economics laws? What is the proper way to discuss these matters?
The logic method is necessary in many other areas, e.g. making the statement that some school of thought is a “sect”. If you maintain that a body of knowledge is really just a name for a sect, you have to prove it by logical reasoning. For example, you might show that there are virtually no differences among Austrians and that all of them agree on every subject. That might serve as evidence that the Austrian School is a sect.
But then one immediately confronts a problem: there are wide disagreements among Austrians. Hans Hoppe is against free emigration under present conditions (he is of course in favor in free market conditions), and another prominent Austrian, Walter Block, holds the opposite opinion. Most Austrians consider fractional-reserve banking to be economically harming, while the prominent Austrian macroeconomist, Roger Garrison, argues the opposite position. There are many controversies on the interest rate question. Although virtually all Austrians agree that interest is caused by spread value, they discuss the issue. Is it time preference (e.g. Hans Hoppe, Roger Garrison), spread between means and ends (Jorg Hulsmann), or maybe different value attached to holding money now vis-à-vis in a future (Robert Murphy)? There are also many papers dealing with expectations during the boom-bust cycles. Austrians explore, in the light of Mises and Hayek, the workings of a fictional boom, which is caused by manipulating the money supply and lowering the interest rate. However there are many questions on how entrepreneurial expectations fit into the picture. Austrians often debate these topics.
There are of course more examples. Note that these are just examples of differences in the “Austrian core“ associated with the Mises Institute. There are in fact many more, if you start looking in NYU and GMU. Also there are many contributions in JLS and QJAE which debate and discuss many Austrians ideas. Here, for example, is a piece that discusses differences among Austrians on the question of monetary reform.
Now, Mr. King does not tell you this in his article. Why? Either he does not know it, or he seems to have forgotten about it. The interesting thing is that Mr. Kling makes his statements after announcing his score of 78. What is the connection between his score and his objections to the test? Once again: the questions are clear and demand clear answers (Austrian, Chicago, Socialist or Keynesian/Neoclassical). If anyone has a doubt about a given option, or can point out mistakes, he can always inform Mises Institute about it, so the answers can be modified or changed.
In my opinion, the answers are good as they are. If you wanted to, you could reverse points and scores and call it “The Socialist Test”. Mr. Kling didn’t even raise objections to the specifics of the quiz itself, which is another reason that his “proof of Austrian sectarianism” is not convincing.
