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Monday, July 13, 2015

Don’t Let Me Design Your Retaining Wall

The Market Protects You from My Incompetence

The State of California says I’m qualified to practice civil engineering. That means you can trust me to design structures that achieve a high degree of safety, economy, reliability, and maintainability. I even have an official rubber stamp that I can apply to drawings or calculations. It is supposed to guarantee that I know what I’m doing and that I follow generally accepted best practices.

But I haven’t practiced engineering in decades. I used my license perhaps half a dozen times in the 1970s. My rubber stamp has sat idle ever since.

Civil engineering, like other professions, requires a high degree of specialization and training. When clients seek both advice and services from the same professional, a conflict of interest can arise. Clients therefore seek the opinions of informed third parties, including certification organizations. These opinions are especially important when hiring civil engineers, because their mistakes can cause injury or death.

Certification organizations can make two kinds of errors: they can approve unqualified applicants and they can disapprove qualified applicants. These are called type I and type II errors in many kinds of estimation activities.

My own case is a prime example of a type I error. I am now utterly unqualified to practice civil engineering. I have forgotten most of what I once knew, and besides, the design and analysis methods for steel and concrete have both changed radically in recent years. It would be a lot worse for me to resume practice under cover of my license than for a contractor who had built many retaining walls to design and build one similar to others he had built — unaided by a licensed engineer. Yet, I would be acting within the law, while the contractor could face penalties for practicing engineering without a license.

I keep my license current as a trophy of sorts, but really, someone should take it away from me.

State licensing boards are not the only sources of information about engineers. Start with college degrees: a BS in civil engineering from an accredited university. Continuing education classes help. And nothing can take the place of experience and a professional reputation.

Reputations have long been cultivated by word of mouth. People ask their friends to recommend a good engineer or dentist or gardener. Today, the app economy makes reputation that much easier to track — and ever more important to protect. Businesses guard their reputations jealously on Amazon, eBay, and Yelp. Online comments have their drawbacks, but here again reputation comes into play. Organizations like Yelp are concerned about the quality of the posts on their sites out of concern for their own reputations.

Nothing can take the place of experience and a professional reputation.


This is the essential difference between state and private licensing organizations. It’s not that state board members are bad people, and private individuals can certainly make mistakes. But government and market institutions face fundamentally different incentives. State licensing board members need not worry as much about their reputations. They are seen as dedicated public servants. They are immune from competition. They act under cover of obscurity. And they are safe from prosecution for all but the most egregious malfeasance.

New members of government boards are usually motivated by the best of intentions, but over time, and often subtly, they can become heavily influenced or even outright corrupted by the power at their disposal. They often become unwitting allies of the people or organizations they are regulating. State regulators can protect their capitalist cronies from competition, as the Louisiana State Board of Embalmers and Funeral Directors did when it told the monks at St. Joseph’s Abbey that they couldn’t sell caskets, something monks have been doing for centuries. The licensing board was made up of — surprise, surprise — funeral directors.

If all state licensing boards disbanded tomorrow, the existing private alternatives could not fill the gap, and this is what many people find so scary about the idea of reducing the government’s role in regulating our safety. But new businesses would respond to the demand.

Market regulation would not look like a private version of the state model. The combination of competition and reputation would create services that look more like Yelp and Uber and less like the Louisiana board of embalmers. If you want to know if the monks will build you a sound casket, check how their previous customers have rated them. Then compare their prices to those of the myriad funeral services competing with them.

But don’t bother looking up my rating in the civil engineering app. Just rest assured that the market is protecting you from my incompetence.

  • Warren Gibson teaches engineering at Santa Clara University and economics at San Jose State University.