While I agree with the essence of your message, it is flawed only because of free will. When given the opportunity an individual will usually think selfishly even in regard to a larger system. Isn't this the basis for "game theory"? Everyone individually thinks they can squeak by, get a little bit of an advantage, pay off the extortionists, no harm done right?

Or in another example, if nobody took a job for a shitty company there would be no shitty companies right? So why are people taking shitty company jobs?