This becomes the fundamental question in the story. Le Guin's story helps to highlight how an individual responds to suffering in the midst of their own happiness. This child's suffering is the reason why so many are happy. The question is whether or not an individual is able to live contently with the idea that suffering and unhappiness is present. The next issue is how an individual will respond to such a condition. There are those in Omelas who accept the current state of affairs, whereby their happiness resides in the suffering of this child. Their response is one of rationalization of the problem or sheer denial of its existence. Those who see the child and see the pain end up leaving it not able to endure the guilt and pain of such a condition. They gain understanding, but lose contentment and happiness in the process. I think that this is the fundamental question posed by the story in terms of what human beings can do and are to do when poised in such a situation. For example, in a capitalist setting where an individual's economic wealth and material happiness is contingent on the suffering and hardship, sometimes exploitation, of another. To ask this very question helps to highlight its philosophical implications.
"The Ones Who Walk Away from Omelas" is subtitled "Variations on a Theme by William James"; the older brother of Henry James, William James purported the theory of pragmatism, a belief that holds that the meaning and truth of an idea is a function of its practical outcome. In her short story, LeGuin takes this theory to its moral conclusion.
In one preface to her story, LeGuin writes that it is a critique of American moral life. In explanation of the story's subtitle, LeGuin notes that she was inspired to write the story based upon something James himself wrote:
[If people could be] kept permanently happy on the one certain condition that a certain lost soul on the far-off edge of things should lead a life or torment..., how hideous a thing would be [the employment of this happiness] when deliberately accepted as the fruit of such a bargain.
And, while James felt that societies would not accept such a bargain, some of the residents of Omelas do just that, rationalizing their moral responsibility with the idea that the good of many is worth the sacrifice of the one miserable creature on the "far-off edge" of their society. For the others, the moral value of an individual overrides any other so-called practical truth, and they must, therefore, walk away. That they understand the immorality of the pragmatism of the "good for all" is evidenced in those who leave's passing "between the houses with yellow-lit windows (yellow=the color of evil):
The place they go towards is a place even less inaginable to mos of us than the city of happiness....It is possible that it does not exist. But they seem to know where they are going, the ones who walk away from Omelas.