It was 8:45 a.m. in the company town of Washington, where the company is the government, and Steve Joseph was an uncomfortable hero. With a worn briefcase in his left hand and his blue tie tight at the neck, he looked like a company man on the way to work.

But here he was, a man without a job, addressing a pray-in demonstration in Lafayette Park across the street from the White House on a magnificent spring day. One demonstrator asked Joseph to speak louder. "I'm talking as loud as I can," Joseph replied, his voice barely audible above the rush-hour din.

The week had been a rough one for Joseph. His mother had died of a heart atack, and he had become an outcast -- a "notorious figure," he said -- in the comany town.

Besides, this demonstration really wasn't his thing. He had, of course, been in demonstrations before, but that had been during the antiwar years, more than a decade ago. "The people I like least are fanatics, or zealots," he said later. They confuse their ego with their actions."

Joseph is a type A personality, a hard charger, a guy who has punched all the right tickets: Harvard College (cum laude), Yale Medical School (cum laude), John Hopkins School of Public Health. His resume takes four full pages, single-spaced. He jogs to and from work.

Until last week, he and his colleague Eugene N. (Tony) Babb were $50,000-a-year executives with the Agency for International Development, ensconced in impressive offices in Rosslyn with panoramic views of the Potomac, the monuments of official Washington and the Watergate complex.

But then they did the almost unheard-of thing in this company town. They broke with their bosses, publicly denouncing a decision by the Reagan administration to vote against an international code to regulate the marketing of baby formula in the Third World.

Their action cost Joseph, AID's top health official, and Babb, the agency's top rural development officer, their jobs. They resigned, as they knew they would have to. The company town holds little truck with people who buck the company line. Dissent is fine for the Constitution, but not for the bureaucracy.

So why should anyone stick his neck out?

"There are some time when the clarity of the moment is self-evident," answers Joseph. "There are some places you have to draw the line."

For Joseph that moment came a week ago Thursday when he read a draft U.S. policy statement opposing the international code. He had just returned from a week at the World Health Assembly in Geneva, where the vote would take place.

From his work as a pediatrician in Africa and Asia, he knew the dangers that the sale of baby forumla poses in underdeveloped countries where mothers often mix the forumla with contaminated water. From his days in Geneva, he knew his government would be the only one in the world to oppose the code. Joseph had read earlier drafts of the U.S. position; although he disagreed with them, he felt he could live with them. But the tone of this draft, originating in the National Security Council, sent him through the roof.

When he got home that night, Joseph told his wife, Barbara, "I just can't go along with this." She agreed without debate.

He then telephoned Babb. It was, he said, basically a courtesy call. The two men had worked together for three years, but weren't particularly close personal friends. Joseph wanted Babb to know he had decided to make his disagreement with the administration public because Babb probably would be in line to take over his job as acting administrator of AID's Bureau of Development Support, a job that entailed supervising about 300 people.

"I didn't get the words out of my mouth before Tony said he wanted to do it with me," Joseph recalls.

Both men were experienced bureaucrats with 10 years' experience in government. They knew they had no choice but to resign. "We've been involved in this issue for three years. It was very important to us," says Babb. The Reagan administration, he said, has "ignored everything we've told them. If they don't pay any attention to their professionals, what kind of job is it anyway?"

The next day they told AID administrator M. Peter McPherson they would hold a news conference the following Monday to announce that they intended to resign unless the administration changed its position. Both men say they like McPherson. He is, like Joseph, a former Peace Corps volunteer who seems to have an understanding of the problems of the Third World. Their conversation was amicable.

But they had broken the company line. The company had to react. On Sunday, after the first report of the disagreement appeared. McPherson replied in a decidedly hardball manner. "I cannot accept public advocacy of their views in an effort to defeat a decision of the administration in their current roles as senior government employes," he said in an interview.

He took special care to point out that Babb and Joseph were "political appointees" of the Carter administration. This was essentially correct, but it carried a misleading connotation.

Both 44-year-old men are professional in their fields who have moved in and out of government. Joseph says he has never worked in a political campaign. Babb worked as a volunteer in Jimmy Carter's 1976 campaign and in George McGovern's 1972 campaign, but he has been involved in international agriculture development efforts since he worked in rural Saudi Arabia as a teen-ager in 1954.

Babb had been given career status in the agency; a hearing on Joseph's application for similar status had been scheduled for last Wednesday.

"Neither of us wanted to fight for our jobs," Babb said in an interview. "We're professionals. We're employable in a lot of places. We happened to be in government at this point."

The two men say they haven't had time to think about what they'll do next. They have no new job prospects. They've spent most of last week publicizing the reasons for their disagreement with the administration.

After he appeared on ABC-TV's "Good Morning America" show on Tuesday, Joseph called his 69-year-old mother in New Hampshire to tell her he'd be on public television's McNeil-Lehrer Report the next day. She died that night.

Babb and Joseph didn't change the administration's position. Last Thursday -- a week after Joseph made his decision to oppose the vote -- the United States voted against the voluntary code, the only country in the world to do so.

AID has given the two former executives one month to clean out their offices and prepare final reports. They insist they'll keep up their fight.

"This whole thing has been a good experience for me," Joseph said in his office overlooking the slow-moving Potomac. "Maybe I'm naive, but I still think one person can make a difference and we can change the decision."