Adam Curtis' "Hypernomalisation" talks about this exact topic - the system collapses because everyone, from top to bottom, is engaged in a lie, either knowingly or unknowingly. All it takes is someone who is willing to take a stand and say "wait, none of this makes any sense". That's basically how communism in the Eastern Europe collapsed, and that's how these communities can - once enough people realize that this entire self-policing of morality doesn't make any sense because in fact everyone is excluded by the insane rules the community collapses.
Having been there for the collapse, no that is not how the regime collapsed. It was 20 somethings pushing for concessions on the prices of bread and powdered milk and the powers that be caving into demands and then deciding that they would be better off without communism and going further than any of the protestors expected.
This movie was made in 1967: https://en.wikipedia.org/wiki/Whale_(film) and was seen by 20% of the population of the country at the time. This is not the product of a society where no one had any idea what was wrong and how it could be fixed.
