The emperors of ancient Rome, so Gibbon tells us, erected ever more stupendous monuments to themselves in direct proportion as the empire was collapsing.

I am perhaps the first to compare Toronto, City of the Sloped Shoulders, to the grandeur that was Rome. Granted, Ostrogoths and Visigoths laying waste the city there are not (unless you count Huang & Danczkay). But the analogy is apt for all that. Just as the self-congratulatory babble of Torontonians peaks, ''the city that works'' has stopped working.

The city fathers remain happily absorbed with their monuments. As the Dome, behind schedule and over budget, nears completion, a new temple, the Ballet Opera House, begins to rise. The merchants add their own menhirs: from Scotia Plaza to BCE Place to the World Trade Centre. The city bids to host the Olympic Games in 1996. But a mere Olympics, you say? How demeaning. Let's have the 2000 World's Fair for afters.

But strewn about the feet of these colossi is a rising heap of social ills. Thousands of homeless sleep in the street. Not two in a thousand apartments in the city are for rent, while the price of a house has risen beyond reach of all but the wealthiest. In other areas - health care, water, all types of labor - shortages are increasingly the norm.

It might be argued Toronto is victim only of its own success. But the city and the province have shown a singular lack of imagination or foresight in response to the strains of growth. They seem content to pile ever-greater demands for resources relative to supply onto the same structure of allocation as before.

ABANDONED ALLOCATIVE RULE

Faced with the resulting overload, they have patched together a variety of ad hoc responses. In some cases, they have simply abandoned any allocative rule at all, as in the string of exemptions from density ceilings granted well-connected developers that have slowly eaten hollow the city plan. In other cases, they have tried to compensate by grandiose schemes to boost the supply of the short resource, such as the $1-billion St. Lawrence Square housing project the premier and the mayor cooked up last month.

The furthest extremity of folly, however, is reached in attempts to cap demand by force, like Red Adair on a blowout. Until the recent rains, it was forbidden in one suburb to flush one's toilet; in another, residents were encouraged to snitch on their lawn-sprinkling neighbors. But nothing quite so zany along these lines has appeared as the mayor's plan to turn the two main downtown thoroughfares, Yonge and Bay, into one-way streets - an idea of such Neroesque dementia that last week even the Ontario Supreme Court rejected it.

The consistent theme in each of these examples of misallocation of resources is the authorities' refusal to employ the economist's preferred instrument of the price system to ration demand and call forth supply. One can only speculate on the reasons for this, whether political risk, ignorance, or simple inertia. But the downtown traffic example illustrates two simple truths: first, that without prices, instruments of less-delicate calibre must be employed; and second, that the frontier of feasibility for prices is not unyielding, but changes with technology and other factors.

There is now almost no means of regulating the flow of traffic in Toronto, as in most cities, beyond such ludicrously primitive devices as bumps in the road, or out-and-out prohibition. For the most part, the scarce resource of road space is given away free, first-come, first-serve.

It is as if air traffic were without guidance from the tower, left to sort itself out by process of elimination. Downtown Toronto is thus each day stricken with the urban equivalent of a heart attack. Only in the midst of this madness would the equal madness of loosing the drag racers on Yonge St. even be contemplated.

By contrast, consider a system in which motorists would have to pay a price each time they entered a given street. The price could be raised on overused routes, and lowered on underused routes, according to whatever flow rates are preferred. This is indeed the system used in Singapore and Hong Kong, cities with a traffic flow to make Toronto look deserted.

This raises the image of tollbooths at every corner, and intolerable practical difficulties, and in former times would be correctly dismissed. But technological advance makes all the difference. It is now possible to install meters on cars that read signaling devices planted in the asphalt, and tick over each time the car passes. So no sensible objection to pricing roads can remain - especially given the alternatives.

Without some such reform, the situation can only decline further into crisis. All roads may one day lead to Toronto. But no one will be able to get through them.