The New York Times reports on an internal memo leaked by WalMart Watch that explores ways to cut costs by, for example, discouraging unhealthy people from applying for work and reducing 401(k) contributions.

I’m sure this goes on at many, many companies; it just so happens to WalMart is high-profile. But what is it all about? Apparently, lucre. Not content to have $10.5 billion in earnings last year, WalMart seeks to maximize its profit at the expense of workers, if necessary. But if you’re already making a profit, surely it is inhumane to sacrifice workers solely to make that profit (which goes to the big wigs) even bigger.

Think about it this way: classical economics teaches, and most companies follow, the principle of fundamentally maximizing profits. Looked at it this way, employee benefits are simply operating costs that must be paid to comply with laws or to obtain necessary resources (workers). Any way to cut these costs will increase profits, whether it be by loosening labor laws or by a down market that causes competitors to decrease their benefits, thereby allowing one to decrease one’s own costs and still retain access to these human resources.

But why should greed trump all? What is the point of it all? Once, say, the top executives have a basic comfortable lifestyle, any additional profit goes to luxuries that marginally increase their standard of living. The same money could go to the workers, who (certainly as an aggregate) are just as responsible for the success of the company. Since they’re typically much poorer, their marginal utility is greater, so their standard of living would increase much more than the top execs’, even if each individual share of the profits is smaller in absolute dollars. From a metric of collective utility, this would be the more socially beneficial distribution.

Let’s leave economics aside, though, and focus on the ethical questions. You’re a CEO, say, and you make more than enough money to have the basic necessities and comforts of life: food, shelter, health care, education, leisure time, and cultural pursuits. Is it not plain greedy to keep accumulating more when fellow human beings do not have such basics? Are you not simply piling on luxuries in your mansion at the expense of others (who happen to have worked to make your profits possible in the first place)? Whether you’re the owner, president, or founder, how does that entitle you to make so many orders of magnitude more money than the other people who are just as important to the success of your enterprise?

So here’s a radical (but not new, I’m sure) suggestion. Instead of looking at the bottom line as a pure profit-maximization problem, why not look at it as a constrained maximization problem? This approach would seek to make a company as profitable as possible, subject to the constraints that its workers all have a decent minimum standard of living. Sure, the big-wigs may have to do with one fewer private jet, but the workers will have access to health care and vacation time. Let’s take this one step further: one can be revolutionay and consider a company’s performance as an optimization problem where both profits and employees’ standards of living are factors in the objective function to be maximized. Under this scenario, if the company does well, employees are able to achieve an even higher standard of living themselves.

What do you think?