wrt the "packing people into cities like sardines and paying them no more than that needed for their daily bread is most efficient" point of view, consider a hypothetical commodity:
generic eco-commune offers $20/unit
Wal-Mart offers $15/unit
Commune pays $10 in labor and $10 in materials cost, returning no profit. Wal-Mart pays $8 in materials cost and $2 in labor (mostly due to underpaying for labor, rather than efficiency), returning $5 in profit. Most of that profit ultimately goes to enlarging the personal bank accounts of the executives and can be safely ignored; a smaller portion may one day contribute to a new industrial venture, but in this fashion it is comparable to the people of the commune using their personal savings to do the same, so it is canceled out for our purposes.
Looking just at these figures Wal-Mart comes out ahead: they offer the same product at substantially reduced operating costs. However, if we do this, we fail to consider the societal ramifications of the way these two entities do business. The eco-commune pays its workers far better than Wal-Mart does. As a result, these workers have a much higher standard of living, and/or do not incur additional expenses to the State for their social welfare.
If we only value the existence of human life, of course we will conclude that reducing people to miserable drones, barely eking out an existence while they churn out excessive quantities of goods at the lowest possible price, is preferred. However, if we take off the economist hat and look at people as people rather than commodities, we begin to value the quality, rather than merely the quantity, of their lives. In so doing, we are forced to question whether it is really ideal, from a quality of life perspective, to minimize operating costs and maximize productivity.