Using the infinitive of a reflexive verb after some form of Poder
In English, the sentence reads: "Good people are able to defend themselves."
In Spanish, I make this:
"Buenas personas (o la gente buena, tal vez) pueden defenderse"
Thank you for your assistance; I hate dreaming about these things! Perdone! I included the "la gente buena" only as an alternative to "Buenas personas" ... My question is really about using "defenderse" or any other reflexive verb in this way. Many thanks for all your comments!

5 Answers
"la buena gente puede defenderse" the first one is correct.
Maybe it is just me, but without the article the sentence sounds completely wrong:
La gente buena tiene la habilidad de defenderse.
"Buena gente" is correct, but it is not quite the same. I am open to debate on this one.
"Good people are able to defend themselves."
La gente buena es capaz de defenderse.
Isn't "buena gente" a folksy, colloquial term, more commonly used when you talk about a particular person who is nice, and sort of naive? (Mario es demasiado buena gente)
I have always understood that "good people" is "la gente buena". (although I have heard folks from the Southern US say "I love him, he is good people")
Your translation is fine.
If you wanted use the exact words of the English text, you could also say "Buena gente tiene la habilidad de defenderse."