Thanks for another great post Larken. I love the way you break things down.
People make the mistake of thinking that human beings are naturally evil and without some set of agreed upon rules we would all run around being horrible to each other. People know the difference between right and wrong by knowing whether they would want something done to themselves. When you hurt someone and they cry it makes you feel bad (unless you're a psychopath). You know you wouldn't want something done to you that would make you cry.
That feeling in the pit of your stomach when you know you are doing something wrong is inside all of us. I don't believe that it is a product of government or religion or even the teaching of parents.
I heard it suggested that the terrible feeling when you do something wrong and the good feeling when you do something right is actually God inside of us. I don't know if that's true but it is one of the best descriptions I've heard of how a God would work through us without interfering with our free will. I'm not a religious person really but even I can believe in that.
Religion aside, we aren't all as horrible as they make us out to be. The majority of people I meet are for the most part good people.