The opposite, nepotism, is very unhealthy, so i think you're correct.

Not sure that the opposite of transfer pricing is nepotism. As far as I know it’s far more common for someone who owns a lake house to assign four weeks a year to each grandkid , than to make them bid real money on it and put that in a maintenance fund or something. Though it’s an interesting idea, it’s not very family friendly

There are more than two explanations.

By all means, give us a few examples.

The legal world is a pseudowolrd constructed of rhetoric. It isn't real. The law doesn't actually exist. Justices aren't interested in justice, ethics or morality.

They are interested in paying the bills, having a good time and power like almost everyone else.

They don't have special immunity from ego, debt, or hunger.

The legal system is flawed because people are flawed.

Corporations aren't people. Not even legally. The legal system knows that because all people know that.

If you think that's true legally, then you agree the legal system is fraudulent rhetoric.

Corporations do have a special immunity to being killed though. If I killed a person, I'd go to prison for a long time. Executed for it, even. Corporations can kill someone and get off with a fine.

I think the quote is misused. Narcissistic self interest is neither incompetence nor malice. It's something else entirely.

It's malice. Nobody ever sees themselves as the bad guy. They always have some rationalization of why what they're doing is justified.

I'm not bad, I only did $bad_thing to teach you a lesson!

Which brings up what IMHO should be the main takeaway from this:

The first requirement to fall into this trap is to believe you can't fall into this trap. It's still possible to do malicious things even when you believe to your very core that you're not a malicious person.

The only way to avoid it is a healthy habit of critical self-reflection. Be the first to question your own motives and actions.