There is, although I can't remember the name right off hand, a 1960s counter-culture novel about free love in a college setting. I vaguely remember some historian mentioning that a theme in the novel was for the 'hippies' to take over a small New England state and he thought that fiction became truth in Vermont.
Specifically it appears you are combining the plots of ‘The Harrad Experiment’ and ‘Prop 31’. Rimmer was blessed with the ability to spin even an outlandish tale into plausibility and he wrote with an easy fluid style.