Capitol Ideas/Under Roman Ruins

...Shunning sleep, I decided to inspect the Roman public transportation system in the afternoon...

...It sounds like they need a tax cut," said Les Lenkowsky from the back of the bus...

...Perhaps it could be put on the table for tomorrow's exchange of views at the USIS library...

...Antonio Martino regaled us with so many interesting facts and interpretations about Italy and Italian perceptions that the free-rider problem somehow never arose...

...There were about twelve of us in the bus—"intellectuals," as Bob Tyrrell teasingly called us—and I think we all began working out simultaneously the public-policy implications of this news about Roman business hours...

...And don't miss St...

...But William Kristol, political science professor at the University of Pennsylvania, got in ahead of me by saying, "True, but it would spoil the charm...

...But did it make sense for the Roman authorities to build, no doubt at enormous expense, a fare-paid underground railway system while keeping in place a "free rider" system above ground...

...We were all "young" on this trip, but some were younger than others...

...As we rattled along underground it did occur to me that although the Roman metro system may not have been flawlessly designed from the point of view of incentives, it was surprising to find they had a metro at all...

...Tom Bethell is The American Spectator's Washington correspondent...

...Roman buses, it turns out, operate on an "honor" system, as follows...

...One of the points that did emerge, need I add, was that the top income-tax rate in Italy is about 60 percent, taking effect at a not-very-high income level...

...free rider" problem that is so beloved of professional economists...

...The tabaccaionist told me that he had sold out, but he directed me to another vendor even farther away from the subway entrance...

...There were a few trained supply-siders in our group, and it is well known that supply-siders do not miss opportunities to analyze the way the world either works or opts for leisure...

...Hence, crowded buses...

...Kristol-the-Younger was no doubt right to suggest that it is not practical to pour the new wine of entrepreneurial energy into such hallowed old bottles as Rome, but the trouble is that the legislation that in practice prevents such an outcome casts a siesta-like pall over the entire country, most of it nonhallowed...

...Imagine how difficult it must have been to excavate the tunnels without boring into long-buried Caesarean sections and so on...

...Given such an incentive-oriented population, it came as no surprise to learn that the underground economy is large...

...He works for the Smith-Richardson Foundation...

...The siesta had ended after all...

...Once again, you find a tabaccaio or some such authorized vendor, you buy your ticket, and you board your bus, which is operated by a driver who pays no attention to the passengers or whether they have tickets...

...Peter's...

...Then there was the lunch hour to consider (or was it two hours...

...But this would not alter my generalization about the Roman disposition...

...I paused briefly to admire the ancient stadium, 1,900 years old and today entirely nonfunctional (but as with the metro, of course, surprising to find it there at all...

...The solution, then, may very well be something like the opposite of enterprise zones —let us call them economic "black holes" (corresponding to Rome, Florence, Venice, etc...

...Martino is one of the Italian experts on this extensive subject, and he had elsewhere pointed out that the Italian "underground" factories do not just turn out small things like pins (as one might imagine) but large things like buses...

...I emerged at the station called Colosseo, which is near to the center of Rome...

...You are supposed to push your ticket into a machine, which goes "clonk" and stamps it with the date...

...Eventually I bought the ticket, returned to the subway, was admitted by the uniformed guards, and boarded a train...

...First I attempted to enter the Metro system at a station called Repubblica, but this proved to be difficult...

...However, I did not let it distract me too much from my supply-side train of thought...

...By this time we were passing close to the Roman Forum, a "marketplace of ideas" in former times, and one or two other well-known sites of Imperial Rome...

...Once in a while a ticket inspector may come aboard and check up on everyone...

...and of course there was the afternoon siesta...

...I was about to correct him gently by saying, "You mean, tax rate reduction, especially the top marginal rates on income, with particular reference to rates on investment or 'unearned' income," which is my standard interruption on these occasions...

...All of which goes to show how difficult it is to work things out satisfactorily in this life...

...I think I noticed only three or four people on the platform...

...Two uniformed guards standing by the entrance gate told me that I would have to go back outside to a certain tabaccaio where I could buy the necessary ticket...

...Such a complex system must surely have strong "disincentives" built into it, I reflected, and the Roman citizenry evidently concurred...

...They have obviously been abandoned in mid-construction...

...We might perhaps have enjoyed a meaningful exchange of views on that subject too at our meeting the next day, but alas it was not to be...

...where the tax rates stay high and the regulations complex, while elsewhere the government vastly simplifies things for the citizenry...

...No doubt, the economic forces needed to preserve old buildings in one place make it difficult to put up new buildings elsewhere...

...Only about nine or ten of them were on the train—this in the middle of the afternoon...

...There is so much demand for them, as I have already explained...

...CAPITOL IDEAS UNDER ROMAN RUINS by Tom Bethell As we drove into Rome, past litter-strewn outskirts which would have made any American liberal feel proud of his Environmental Protection Agency, the guide in the front of the bus remarked that Roman shops were closed on Monday mornings...

...Bits of pieces of marble were lying here and there amidst the cat-littered grassy slopes, and old ruins were set elegantly amidst pine trees...

...This would have been the equivalent of rush hour in America, but the station was almost deserted...

...These incomplete structures, the infallible signs of a disorganized economy, seemed to be the contemporary echo of the numerous "incomplete" buildings in the center of Rome—I mean the surviving ruins from the Imperial past...

...Not a construction worker is to be seen, uncut grass completely surrounds the building frames, and vegetation curls up over the edges of recently laid concrete...

...You risk a fine, but it is a good bet that there will be no inspector, so in fact most bus passengers are "free riders...

...We passed a small circular temple with a conical roof, said to be 2,300 years old...

...Well, let us at least not get into the...

...As best I could make out the time to go shopping was about five o'clock in the evening...

...Anyway, I've gone on far too long with this nonsense...

...Could young Kristol be right, I worried...

...Of course, you only have to propose such an idea to realize what could go wrong: incentive-minded Romans would no doubt prefer to live in low-tax Entrepre-neurland than amidst the high-tax charm...

...Or was Kristol right to suggest that under certain circumstances and in certain societies fully depreciated ruins acquire a higher implicit value ("charm") than is likely to be attained by any alternative resource use...

...What I really meant to say was that Rome is a nice place to visit, and for all I know is a nice place to live, too...

...Thus I felt I had established the significant point that Romans were incentivists and would so report to Prof...

...Dozens of small cars were rushing about madly in all directions, and the buses were packed to the bursting point...

...Laffer on my return to America...

...A meaningful question, I think we'll all agree, but one to which there could be no simplistic answer...

...Soon the authorities would have to build a new Roman wall around the city to keep people in...

...How such conspicuous enterprises as bus factories can possibly elude the revenue agents and the constabulary I don't know, but of course it is encouraging to know that they do, otherwise I dare say siestas would be even longer than they are...

...With the following cautionary footnote: it could have been, of course, that ridership was sparse because the people were all still taking siestas as a result of other disincentives already mentioned...

...Were there opportunities here for entrepreneurs—opportunities which could only be realized if there were a significant shift in the relative price (or "opportunity costs") of leisure and effort...

...One thing you are bound to notice on a journey to Rome's outskirts, or indeed on the journey in from the airport, is the very large number of half-built structures standing forlornly by the side of the road— houses, apartment buildings, and even office buildings...

...We have just flown in from New York and have not yet put up at our first hotel, yet here we were already engaged in dialogue and a meaningful exchange of views...