Archive for April 2nd, 2010

Inspect This!

Friday, April 2nd, 2010

Minnesota has inspectors for just about every possible activity. The burden is inestimable at this time.

Dairy Inspectors
Health Care Facility Inspectors
Public and Charter School Inspectors
Electrical Inspectors
Rental Property Inspectors
Asbestos Inspectors
Building Inspectors
Fish Farm Inspectors
County Weed Inspectors
Ag Program Inspectors
Game & Fish Storage Inspectors
Lead Inspectors
Locomotive Inspectors
Manufactured Homes Inspectors
Meat Inspectors
Mine Inspectors
Municipal Waste Inspectors
Mutual Insurance Inspectors
Plumbing Inspectors
Motor Vehicle Inspectors
Water Conditioning Inspectors
Weed Inspectors
Wild Animal Inspectors


These are just a few of the mandates to ‘inspect’ found in the MN rules. I’m certain there are more layers of inspectors sanctioned by county and municipal boards all over the state. This begs the question… What constitutional mandate is satisfied by all these inspectors?

Well understood management principles teach us that decisions should be pressed down to the lowest level of responsibility. Relying on an inspector or supervisor’s review to identify and correct all possible mistakes is a futile and inefficient process. You cannot inspect every activity all of the time. But you can place the burden of compliance down to a level most capable of identifying and correcting problems. The installer of an apparatus is the party most likely to locate and fix a problem with the installation. Instead of laborious inspections, the state can provide assurance that the public is protected through insurance, minimum performance criteria, and warrantee expectations.

The state should never be performing activities that contribute to profitability. Food inspections in general are focused on bacteria and disease. Introducing infestations into the food supply can destroy entire truck loads of cargo and contaminate production lines. This is a profitability issue for the producer, the processor, the retailer, and the consumer. There is no need for a state inspection as the penalty for improper operation is a natural outcome. The interested parties have a natural incentive to produce disease-free products or face the consequences of loss due to negligence. Current reliance on the state inspection process provides a false sense of security at a very high price.

When possible, traditional ‘inspection’ processes can be implemented by a “peer review.” For example, an electrical, plumbing, or building inspection can be conducted by asking a knowledgeable party to review, criticize when necessary, and accept co-responsibility for adequate compliance. When appropriate, the peer review can be conducted on a sampling basis and possibly by an industry association funded by the interested parties.

To safeguard the public, providers of service or products should be expected to maintain insurance policies suitable to compensate injured parties, including state investigation and mitigation costs, in the event of failure. Insurance companies establish premiums based on risk. When appropriate, they can request or require the insured to submit to voluntary reviews to determine compliance and corresponding risk. Failure to conduct adequate oversight will induce onerous penalties, which provides a natural incentive for the parties to maintain compliance. The invisible hand of natural motivation is far superior to the state’s heavy boot at the throat of industry.

Each viable industry in Minnesota has a trade association—in some cases, many associations. These associations should develop suitable self-regulating criteria to eliminate the state’s mandate to ‘inspect.’ Individual failures should have implications for the whole industry. Once again we see how natural consequences provide incentive to self-regulate instead of relying on a false sense of security provided by over-worked state inspectors.