Game theory is exactly it. A bunch of simulations have shown that in a repeated prisoner's dilemma, the optimal strategy is tit-for-tat, sometimes adding forgiveness. The fact that you will play again incentivizes players to cooperate. But as soon as the game becomes finite (i.e. you can see the end in sight), the optimal strategy becomes "defect", because your opponent also has the same incentives and whoever defects first gets the payoff.
Incidentally this also points to the path from a bad to good equilibrium. You have to throw away the big system and start with a system small enough that the participants will interact repeatedly. This rebuilds trust. Then you have to defend that system from outside influences, or at least carefully control them so they play by the same rules as existing participants. The act of defending your local community also builds trust - arguably [1] post-WW2 U.S. social cohesion was actually generated by the experience of defeating the Axis powers and then getting enmeshed in the Cold War. Finally you can gradually expand the system through carefully controlled immigration and naturalization.
Unfortunately, this probably means that the Internet, globalization, and likely large states like the US/China/Russia are all toast. And as Terence Tao's post here points out, large organizations are usually more efficient than small organizations. That means that as large organizations have outcompeted small organizations, the transition as those large organizations themselves become dysfunctional and disintegrate is going to be wrenching. We're going to lose access to several material conveniences that we take for granted.
It's interesting to wonder about why norms degrade at scale. Intuition tells me it's because stink-eye doesn't scale. Defectors in a small org pay a price external to the game, aka "reputational damage". But members of large organizations rarely suffer this, because they are strangers, and because "they are just doing their job". A half-formed thought, but perhaps it's half-useful.
In the book "The Logic of Collective Action" that's recognized as one of the reasons for why large organizations are unable to produce public goods without setting up some separate, selective incentives for the individuals. When society is composed of mostly large organizations, nothing can be done without either forcing people to do it (government) or using money as an incentive (corporations). In small groups it's possible for the group to act in the best interest of everyone (produce public good) without having any other incentives for the individual, and a part of the reason is the effect on reputation for non-participants.
Maybe this transition to large groups means that it's harder to produce public goods, since producing them now always requires setting up a separate system of incentives, which is hard and can be gamed.
When you are the 900 pound gorilla, "reputational damage" is no longer an effective check against bad behavior. This is the exact motivation for the trust-busting movement in the early 20th century. Now the US has regressed and we are in another gilded age.
I think this is what you're saying but in different words - larger scale makes people more anonymous which purely benefits selfish behavior (or specifically those who naturally employ it whenever possible).
And by stink-eye people who did this a long time ago I'm sure were just gotten rid of because there are many types of people (though individually rare) the only way to deal with them is to not deal with them.
My personal belief is society is far too naive of extreme selfish personalities and they have infested every aspect of modern society and are actively making others more selfish.
Incidentally this also points to the path from a bad to good equilibrium. You have to throw away the big system and start with a system small enough that the participants will interact repeatedly. This rebuilds trust. Then you have to defend that system from outside influences, or at least carefully control them so they play by the same rules as existing participants. The act of defending your local community also builds trust - arguably [1] post-WW2 U.S. social cohesion was actually generated by the experience of defeating the Axis powers and then getting enmeshed in the Cold War. Finally you can gradually expand the system through carefully controlled immigration and naturalization.
Unfortunately, this probably means that the Internet, globalization, and likely large states like the US/China/Russia are all toast. And as Terence Tao's post here points out, large organizations are usually more efficient than small organizations. That means that as large organizations have outcompeted small organizations, the transition as those large organizations themselves become dysfunctional and disintegrate is going to be wrenching. We're going to lose access to several material conveniences that we take for granted.
[1] https://www.paulgraham.com/re.html