" the largest group is the most likely to be unethical, immoral and unprincipled."

What nonsense. Except that there is safety in numbers - its safer to riot when there are more of you. But Hitler was one person, who was very much unethical, immoral and unprincipled. So are "bankers", the "1%" and others.
The idea that a smaller tribe is more moral than a larger tribe is just nonsense.

What this boils down to is whether society should be ruled by an elite fraction or whether it should be ruled by everyone. If the elite are truly enlightened, then sure, let the elite rule. But if the elite are the Nazis, or the Plutocrats, or another group of psychopaths, then its better to let the majority govern.

Ultimately, the answer is to educate the majority so that they are enlightened enough to rule themselves. It is a tricky question, no doubt, but dictatorship is not a panacea.

Trusting people is ultimately the only way forward - but mechanisms must be put into place so that people are given the tools they need to govern themselves. Democratically.