The main character is a man who is capable of antisocial behavior and who considers himself “the king of the world.” He is allowed to do what he wishes, take what he wants and go where he pleases without reprisal, so long as he does no violence to another human being. The “humane, permissive” society in which he lives has adopted a threefold solution for someone who is, by their standards, insane.
The passage describes a society where an individual is granted significant freedoms and privileges, but only if they refrain from harming others. The "humane and permissive" nature of this society leads to the development of a specific approach for dealing with individuals deemed mentally unstable.