Superior Social Engineering

If somebody’s gonna do it, it ought to be done better.

I’ve never had much time for social engineering. Not only is it usually an affront to freedom, but it usually comes with perverse unintended consequences. Still, one might make the case: If somebody’s gonna do it, it ought to be done better.

While I would never want to offend the sensibilities of those who just want to be left alone by the authorities, I would like at least to imagine less poorly designed systems than the ones we currently suffer under.

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Here are some proposals, in no particular order.

1. Mutual Aid Mandate. One of our dedicated readers, Eugine, told me I was pulling punches when it came to diagnosing US debt woes. I had not pointed hard enough at entitlements as the primary source of the problem—but they are. 41-45 percent of all federal spending goes to the three main programs. While it’s important to call out corruption and cronyism, welfare and entitlements combined account for 60 percent of mandatory federal spending.

   Therefore, in exchange for dismantling all welfare and entitlement programs, every citizen must become a member of a mutual benefit association. Anyone who makes less than a certain income would qualify for a government-issued mutual aid voucher or EITC, with able-bodied work requirements and other limits (say, a 2-year lifetime limit on full benefits, then a 25 percent taper). Private charity donations get a 100 percent tax credit (up to 50 percent AGI) to backfill gaps. Your Social Security Number (SSN) would be replaced by a Mutual Benefits Number (MBN). Your mutual benefit association would provide various forms of social insurance and aid, but would be far more discerning about how benefits are disbursed.
   
   Note: It might even be possible to tokenize such systems, as with 7 below.
   

2. Voter Criteria. Right now, people who could not find their state on a map, much less tell you the three branches of government, are allowed to vote. Furthermore, people who are net tax recipients have a disproportional say in the democratic process. If we must continue living in a democratic republic in which we vote for elected officials, there must be new voting standards.
   

   1. All citizens must pass a citizenship exam.

   2. All government-issued IDs must indicate citizenship status.

   3. One must be a citizen to vote.

   4. One must be a net tax contributor to vote.

   
   Some people might feel uncomfortable with the idea that 35 percent of citizens could become ineligible due to their income level. However, there is justice in the idea of proportionality—i. e. those who pay the taxes should get to make the decisions.
   

3. Homeless Diversion. Most homeless people are also drug addicts. Currently, those who have to smell them, step over them, or be harassed by them have two policy options: A) Have police kick them to the underpasses and hope municipal garbage collection and cleaning crews stay on top of their messes, or B) let them build tent cities and open-air drug markets downtown.

   Instead of this false choice, I propose that states and municipalities test programs where only highly addictive substances are still prohibited—e.g., meth, crack, and fentanyl—so those who possess them still get arrested. But instead of incarceration, addicts can opt for a psychedelic therapy program.
   

   1. LSD—Strongest historical data for alcohol addiction.

   2. Ketamine—Multiple RCTs support its use for alcohol use disorder.

   3. Psilocybin—Evidence supports treatment for cocaine use disorder.

   4. Ibogaine—Promising results, particularly for opioid use disorder, with cardiac arhythmia risk during treatment. This risk should be weighed against the grave risk of fentanyl overdose.

   
   It was once counterintuitive to think that psychedelic therapies could have a transformative effect on people suffering from addiction, but the evidence is mounting. These are the most powerful substances in the world for helping people recover from severe addiction, the primary driver of homelessness.
   

4. Education Reengineering. A quiet education revolution is already underway in the US, but teachers’ unions remain a major obstacle. We already know that public sector unions are a legal money-laundering operation that uses your tax dollars. Teachers collect payments through state and local taxes, and a portion of those funds goes to union dues. Union dues are overwhelmingly funneled to the party that guards the union’s interests, which so often diverge from those of parents and students. That party obstructs meaningful education reform. Parents, students, and taxpayers suffer.
   

   To change the misalignment of incentives,

   1. Create universal education savings accounts (ESAs),

   2. Extend right-to-work laws to teaching,

   3. Convert to portable defined contribution plans (no more pensions),

   4. Replace teacher certification with performance pay,

   5. Require unions to disclose any political funding transparently in real time.

   
   Of course, the best ‘social engineering’ sets the conditions for unleashing the entrepreneurs, in this case, educational entrepreneurs.
   

5. HSAs for All. Third-party payer systems, such as employer-sponsored insurance and government programs, hide prices, drive overconsumption, and lock people into job-linked coverage plans. Once we remove the tax privilege that ties health insurance to employment, major reforms surface.
   

   1. Coupled with either catastrophic-only health insurance policies or the mutual benefit association’s catastrophic contribution, everyone has an interest-bearing, tax-protected health savings account (HSA)

   2. In lieu of FICA payments, a reasonable percentage of one’s income is deposited into the HSA with each paycheck. Resources from this account go to all expenditures not covered by the catastrophic portion.

   3. Instead of Medicaid, which is vulnerable to fraud and price distortion, the low-income population receives direct payments into their HSAs on a sliding income scale.

   4. Instead of Medicare, which suffers from overconsumption issues, some of which are physician-directed, the low-income population receives direct payments into their HSAs on a sliding income scale.

   5. All healthcare providers must post cash prices for the 200 most common procedures and tests online—in real-time, in a standardized format—and accept HSA debit cards for treatments.

   This approach uses top-down rules to force market participants to reveal prices and compete on value for patient consumers.
   

6. Housing Affordability. Time is money, especially when it comes to home construction. The trouble is, there are too many interlopers with their hands on the process. We probably can’t assume these small-time tyrants won’t get rid of all the zoning and construction standards that raise construction costs, but we can at least implement a couple of engineered solutions that reduce home construction costs:

   1. Introduce automatic by-right approval for any residential project that meets objective, pre-published standards (e.g., height, setbacks, etc.) Such would eliminate discretionary hearings and NIMBY vetoes. The approval process must occur within 30 days, or it’s automatic.

   2. A density and affordability bonus incentive gives builders 50 percent more units (with no additional fees) if 10-20 percent of the units are priced at 80 percent of the area’s median income for 15 years. Such introduces some “affordable” stock without additional mandates or subsidies.
      

7. NGO reform. Like teachers’ unions, too many NGOs are partisan money-laundering operations. It’s time to end such practices.

   1. All contributions and payments to NGOs must be private, never public. No taxpayer funds may be “donated” to an NGO. Period. Both donors and recipients should be held criminally accountable.

   2. Tighten political activity limits and tax privileges. 501(c)(3)s get zero tolerance for any partisan activity or substantial lobbying. Reclassify overtly political NGOs as 501(c)(4)s (no tax-deductible donations). Cap or phase out the charitable deduction for organizations spending more than 10 percent on advocacy/lobbying.

   3. All tax exemptions auto-expire every 7–10 years unless renewed through an independent audit demonstrating a primary focus on direct basic-needs provision (food, shelter, education, health) with measurable outcomes and less than 20 percent overhead/admin costs. New NGOs start with a provisional three-year period.

   4. Offer 120 percent tax credits (up to a cap) for direct individual donations to verified basic-needs providers. Remove barriers to private charity (e.g., zoning limits on homeless shelters run by churches, liability protections for good-faith donors). Encourage donor-advised funds and private mutual aid societies with lighter regulations.

   5. Allow opt-in private “social welfare pools” where individuals voluntarily pool resources for mutual aid (See 1), with tax-neutral treatment similar to HSAs—fully private, no taxpayer backstop, and explicit exit rights.
      

8. Money Hybrid. Fiat currency gives central banks and governments an unchecked ability to print and inflate (a hidden tax), which distorts credit markets, savings, and investment, creating boom/bust cycles. Pure crypto-anarchy offers hard scarcity but suffers volatility, scalability friction, and compliance gray areas that keep cryptocurrencies at the margins for most transactions. The hybrid system engineers coexistence with guardrails, as the government commits to sounder money via reserves and rules, while private issuers (including crypto projects) compete on merits.

   1. A Strategic Bitcoin Reserve Act would codify and expand the U.S. BTC reserve; hold all seized/forfeited coins permanently and acquire up to 1M BTC over 5 years as a digital-gold anchor of 5–10 percent of reserves.

   2. Legal tender and tax acceptance. Qualifying cryptocurrencies and stablecoins with verifiable reserves and a market cap of more than $10B would become legal parallel currencies. Federal agencies would accept them for taxes and payments at market rates and enforceable contracts.

   3. Rules-based fiat and free-banking charter. Narrow the Fed to a 0–2 percent inflation target via some transparent rule (e.g., Taylor) and require congressional approval for quantitative easing. Introduce a new low-barrier federal charter for 100-percent-reserved private stablecoins or notes (with minimal KYC, no bailouts, and a buyer-beware clause).

   4. Phase-in, metrics, and sunsets. Start with a 5-year phase-in period. If cryptocurrencies start getting real traction—for example, if qualified cryptos handle at least 15 percent of U.S. transactions—then automatically ramp up BTC backing for the dollar. Every five years, take a fresh look at how it’s working. If inflation stays low and adoption is growing, keep going or loosen things further. If the goals aren’t being met, the law automatically tightens, scales back, or even sunsets the program. No Central Bank Digital Currency (CBDC) is allowed—ever.

   Some would argue that to fix the money is to fix so many other problems. There is something to this.

Now, I can’t stand the phrase ‘let the market decide,’ because it never helps people overcome their failures of imagination. But I want to reinforce to readers that my preferred solution is always “unleash the entrepreneurs and innovators.” They almost always do better than policymakers. And they can and should include social entrepreneurs laboring in a venture philanthropy ecosystem.

Beat these up. Add some more. Or, better yet, use the comments to tell us how subversive entrepreneurs could do it all better.