Up or out is good for morale, both for those who remain and thereby know that they belong, and for those who are dismissed and are thereby forced to look for a peer group in which they will not be reminded of their incorrigible inferiority and will not be tempted to sabotage their colleagues’ work out of bitterness.
A case could be made for a world with weak governments, whose weakness would protect their own citizens from accidental oppression by the rulers, and would protect the citizens of neighbouring countries from being occupied by force rather than on the occupying regime’s merits as measured by the welfare of its citizens. In practice, unilateral commitment to a weak government will only make an economically superior regime vulnerable to an inefficient takeover. As a result, powerful governments are bound to emerge and serve as periodically deployed peacock’s tails, indicators of a vital and viable economy.
Right and wrong, while not god-given, are not entirely relative either but solve a maximisation problem of a reasonably broad appeal.