Central to Chapter Three is Machiavelli’s statement that:
[I]t is necessary to whoever disposes a republic and orders laws in it to presuppose that all men are bad, and that they always have to use the malignity of their spirit whenever they have a free opportunity for it.Machiavelli provides a single example to support his thesis: the temporary unity of Rome upon the expulsion of the Tarquin kings. The seeming union of the nobility and the plebs—the two political factions in early Republican Rome—was not, Machiavelli posited, the result of a natural goodness of either faction, but rather of the fear that the deposed Tarquins inspired in the nobility. Antagonizing the plebs, the nobility thought, might induce them ally with the dethroned royalty to accomplish a Tarquin restoration at their expense.
To avoid this possibility, the patricians allied with the plebs until the Tarquins passed away. But once the Tarquins had died, and the fear of their return dissipated, the nobles once again opposed the plebs politically.
This renewed opposition resulted in “many confusions, noises, and danger of scandals  arose between the plebs and the nobility[.]" To keep the peace, and protect the plebs against the nobility’s power:
[T]hey arrived at the creation of the tribunes for the security of the plebs. They ordered them with so much eminence and reputation that they could ever after be intermediaries between the plebs and the Senate and prevent the insolence of the nobles.Three thoughts on this vignette:
Who are “they” to whom Machiavelli refers in his statement about the creation of the tribunes? The language, both in the Mansfield & Tarcov translation and the original text, reads as if the tribunes were the brainchild of some far-thinking men with the incentive, wisdom, and foresight to create a position to mediate early Rome’s political conflict. This appears to contradict not only the title of Chapter Three itself, which ascribes the creation of the tribunes to “accidenti” (“accidents” or “incidents,” according to both Mansfield & Tarcov and my own understanding), but also to Livy’s own account, which attributes the creation of the tribunes to political compromise in the wake of the plebs’ threat to leave Rome over the military levy.
What exactly is meant by “bad”? The Italian word Machiavelli uses is “rei,” an archaic word that does not survive in modern Italian dictionaries like Lo Zingarelli. Does it simply mean being selfish, as in the “self-interest properly understood” championed by Alexis de Tocqueville, or in Adam Smith’s classical view of selfish economic behavior as expressed in An Inquiry into the Nature and Causes of the Wealth of Nations? Or does it denote a tendency for “corruption” (corruzione), in the sense Machiavelli appears to use it—that is, having ultimate allegiance to any entity other than the state?
Machiavelli does not assert that all men are bad. He merely says that whoever rules a state must assume that they are. Thus, men can be good in Machiavelli’s eyes, especially those common people that are ordered under good laws like those in the as-yet-uncorrupt Roman Republic. (See Chapters 25, 55, and 58 of Book One for Machiavelli’s discussion of their alleged goodness.) Moreover, as noted in Book One, Chapter Two, Machiavelli believes that individuals who overthrow a state that has sunk into degeneracy can act virtuously in founding a new one, much like Lucius Junius Brutus did after the expulsion of the Tarquins.
Once can assume, however, that a ruler cannot easily discern who is good from who is bad, much less predict how future generations will behave. Indeed, as noted in the previous chapter, the generations that follow the foundation of a new order tend to exhibit a degeneracy lacking in their forebears. Machiavelli’s purpose, therefore, seems less to make a philosophical pronouncement on the morality of all men, but simply to make a policy recommendation based upon the tendency of the majority of people. While virtue exists, the state must act as if it did not.