it assumes (1) conflict mediation is always possible and (2) and you do not want a system which is racist. (2) is fine, but (1) is not easy

1 is actually not as hard as people make it out to be, people just think 'mediation' and 'giving orders' are the same thing. I did care for developmentally disabled adults, and part of my training was in conflict mediation. I've also worked in a low-cost hotel that housed drug dealers, and preferred to de-escalate conflicts between tweakers myself instead of calling the cops. One of the huge problems with the US police forces is that they generally assume conflict mediation isn't going to work and jump straight to guns.

I also don't understand why it's not a political talking point that happy people don't commit crime to begin with. The US is allergic to taxes being used to increase happiness. Benefits keep getting shot down like, oh no, we can't have aid because people won't use it to better themselves, they're just going to stop stealing booze and start paying for it. Even their supposed downside is an actual improvement, I don't get it.