I would second Jim's suggestion ("the problem is that it's incomplete") in the case of
a short presentation. THe focus on preference formation and the role of institutions
in this is also a good idea.
Just pointing out the implications of "endogenous preferences" tends to undercut all
the "welfare" conclusions of NC theory. Herb Gintis' 1970s work (in AER 1974 May, I
think, and other places) points out some of the implications of endogenous
preferences, adaptive preferences, and feedback effects. See also
http://www.zmag.org/books/4/4.htm and references therein.
While for a "static analysis" one _might_ assume exogenous preferences, for any story
about grwoth and change over time endogenous preferences are important and such
preferences can't be taken about of by mainstream economics.
Alternatively, you could focus on technology development and technology choice: a
large literature exists on this which directly undercuts NC theories of exogenous
technology development and so on.
More fundamental is the (lack of) treatment in NC theory of power in its various
manifestations. BUt this would be a much more challenging issue to tackle in a short
presentation.
Eric
.
What a big order! If I were to be forced to talk about this subject, I'd stick to the
basic point that "the problem with mainstream economics is not that it's wrong in its
own terms as much as that it's incomplete." For example, the mainstream's "new
institutional economics" (NIO) is a matter of explaining the form of institutions in
terms of technology (including transactions costs) and individual tastes, which are
given at any one time. But this leaves out the way in which the institutional form
_feeds back_ to help determine the types of technology developed and applied and the
preferences and expectations of individuals. It thus ignores the way in which
institutions can "take on a life of their own," developing independently of
exogenously-given technologies and preferences.
There was a good contrast in the JOURNAL OF ECONOMIC LITERATURE, where Oliver
Williamson presented the NIO (September 2000, vol. 38, number 3) and Geoffrey Hodgson
(March 1998, vol. 36, number 1). It's interesting that even though the former wrote
after the latter, he ignored the latter's contribution. (Perhaps arrogance is a
characteristic of the mainstream?)
