After years of continuous and heavy use of Joy, the entire population of Wellington Wells had become seriously addicted to the drug, which created an extremely high demand for Joy, to the point where Haworth Labs, the producer of Joy, eventually began running out of raw materials for producing the drug. By the 1960s, there was now a very real danger of completely exhausting the needed raw materials, which could potentially lead to a serious drug shortage in the future.
To prevent this from happening, Haworth Labs begun supplementing their Joy with a substitute version by producing the drug with substitute materials sourced from the city itself. This turned out to be a gross mistake as the substitute Joy did not produce any of the desired effects and would oftentimes come with severe side-effects, such as severe stupidity or even insanity. Despite the substitute Joy being a failure, Haworth Labs decided to begin producing it anyway, in order to prevent Wellington Wells from running out of Joy.
With the substitute Joy being produced alongside and often mixed in amongst the real Joy, the general quality of the drug begun to deteriorate, resulting in the occasional creation a "bad batches" containing defective substitute Joy, turning the users into Wastrels. In time, the Wastrel population of the Garden District begun to rise at an alarming pace.
By 1964, the quality of Joy was in rapid decline as the defective substitute Joy was now making up an ever-larger percentage of the total Joy production, resulting in an ever-increasing number of bad batches being produced and this was causing more and more people to suffer from terrible side effects.
Realizing that the quality of Joy would soon be irreparably crippled, Anton Verloc began developing a "Permanent Solution" to replace Joy, fix all problems existing with the drug and thus render it completely obsolete.
While the exact details of the "Permanent Solution" are never given, if the player collects enough papers, notes and lore pickups in Arthur's story, they can piece together the following picture;
The "Permanent Solution" is based on Harry Haworth's hypothesis that the true source of happiness lies in physical manipulation of the brain. After usurping control of Haworth Labs, Anton Verloc put this theory into practice when he began developing the "Permanent Solution".
Coconut Joy, mentioned to be a stronger alternative to regular Joy, would probably be able to alter the person's brain chemistry and make them permanently happy. Testings of Coconut has been done not only at Verloc's secret lair in Haworth Labs, but also at Wellington Wells Health Institute by Harold Ridgewell.
While a couple tests show promising results, Vanessa Tinker-Bell is mentioned to have been rid of melancholy and unpleasant memories, though has lost bits and pieces of her intelligence as she now believes she can fly. Harry Haworth is shown to endure vomiting and Harry Plantagenet display utter panic when breathing in the fumes from the Coconut Joy tests. Even Arthur is mentioned to go through rather strong reactions.
All doctors and maintenance workers are aware that Sally Boyle was the brains behind everything, as it's with her brilliant knowledge of local plants that Haworth Labs is even able to produce any more Joy.
With this in mind, the "Permanent Solution" is little more than a hideous plan by Anton Verloc to lobotomize the people of Wellington Wells into a permanent state of happiness, essentially turning them into near-mindless nigh-soulless organic robots unable to think or feel anything normally, all in the name of happiness.
Events of We All Fall Down Edit
Near the begining of the campaign, Coconut Joy is said to be released soon, with a queue built up outside of Haworth Labs. Though when talking to Anton (or "Tony", as he's referred to in the DLC), he mentions that he is very close to his "Permanent Solution", but begs for Victoria to bring Sally Boyle back to him for reasons not really known, though it can be assumed that because she has far better knowledge of drug synthesising that it's with her help that the whole of Wellington Wells will finally be in a state of eternal happiness.