The benefits of cooperation can't be modeled so simplistically, since the concepts of both long-term reputation and long-term retribution need to be taken into account.
The iterated game proves the participants are randomly selecting an option, because they know it's a game.
Otherwise we need to create a model that explains why participants aren't consistent.
Define righteous? Define immoral?
Capitalism rewards providing actual value to people. It doesn't reward shallow niceties and self-righteousness, those are common.
If you think that everyone who gets rewarded in a capitalist society do so because they provide value then you have to ask: What value do scam artists provide?
I don't know any rich scam artists. I do know hundreds of wealthy technology professionals, however.
The net worth of one's parents makes quite a difference in practice.
That includes things like being born with a right of residence in a developed, stable country vs. in a refugee camp in a war-torn part of the world.
The point here was that credit scores do not only rate your own behavior, but also those of people around you. If your neighborhood is bad, your credit score might reflect that instead of your own performance as a debtor. And if your neighborhood becomes hip and gains a better reputation, your credit score might improve even though you're still the same person.
On the other end of the scale, criminal law punishes you for large transgressions, and sometimes prizes reward you for good deeds (although the latter is mostly achieved via market mechanisms).
Both criminal law and awards also work via reputation, by publicising your actions to a wide audience.
It's also interesting to contrast the discussion in this threat to any number of HN threats on freedom of speech in the last weeks. There, the idea that someone's reputation could be tarnished by their participation in a neo-nazi torch parade was generally considered to be the end of freedom.