I do not believe that modern psychology would agree on either thoughts. People are not inherently good/bad. The debate on the question you asked is part of the bigger fight between psychologists that lasted for years - behavioral vs cognitive psychology.
Behavioral psychologists fought for the concept of
tabula rasa, which means that people are born as "blank table" - neither good nor bad. The environment shapes who they become. This is a big part of what behavioral psychologists believed. Skinner, for example, thought that people's actions are the result of conditioning - rewards, punishments, and the environment around them. So, in this view, bad behavior happens because someone was either taught that way or lacked positive influences, and good behavior is learned the same way.
From a cognitive psychology perspective, behavior is shaped by how we interpret and process information about the world. Rather than being "blank table" when born, we develop mental frameworks based on our experiences, which influence how we understand situations and make decisions. For example, if someone grows up seeing selfish behavior, they might develop a framework that assumes people are untrustworthy, leading them to act defensively or selfishly. In contrast, someone exposed to kindness and cooperation might develop more positive ideas, influencing them to act altruistically. It's our thoughts and beliefs that drive behavior, not just our environment.
But then you have other perspectives, like Freud's. He believed humans are born with certain drives - selfish and sometimes destructive impulses - but society teaches us to control those urges. So, it's less about being born "good" or "bad" and more about how we manage our basic instincts in a social world. Society and norms help keep us in line.
The fight between behavioral and cognitive psychology faded long time ago and modern psychologists understand that the true nature of human psychology is a mix of both. All this ties into my favourite piece of psychological theory - Maslow's hierarchy of needs.
According to Maslow, a human must satisfy bottom line needs, things like food, water, and safety. Once those are met, people move up to things like love, belonging, and esteem (basically, the need to be liked or accepted which you talked about). The higher up the pyramid you go, the more you can focus on "self-actualization", which is about becoming the best version of yourself - being creative, altruistic, and caring about others.
So, if someone is stuck at the bottom, just trying to survive, they might be more selfish or act out of desperation. But once their basic needs are met, they have more mental energy to care about how they're seen by others (belonging and esteem), and that can encourage better behavior.
As for why the world isn't worse off? I think you're onto something with the idea that people's need for acceptance and approval keeps a lot of selfish behavior in check. Even if someone's natural tendencies lean toward self-interest, they'll still want to fit in and be seen as a decent person by society. So yeah, it's a balancing act between our self-serving instincts and our social nature.
Putting psychology in political contest does not work. Psychology as a science doesn't fit neatly into left-right split. Even if we were to try to fit psychology into political ideologies, it wouldn't be as clear-cut as you think. For example, on the right/conservative side, there are plenty of groups, like Mormons or other religious communities, that don't necessarily believe humans are inherently bad. Many of these groups emphasize that people have the potential for good and are capable of growth and improvement through faith, personal choices, and moral development. They focus more on the idea that people are born with the agency to choose between good and bad, not that they're doomed to be one or the other from the start.
On the other side, not all left-leaning ideologies view humans as inherently good either. A lot of leftists tend to believe that the human nature is destructive, particularly when it comes to overconsumption and harming the planet. It could even be argued that left-leaning ideologies were created in order to control human negative urges.
All in all, it is not healthy for the society to assign moral or political value to human brain.