不可以省略by which,但可以省略which,同时把介词by置于不定式末尾。即a proper standard by which to judge people(正式书面语体)=a proper standard to judge people by。
二者分别对应的是二个定语从句 a proper standard by which we are to judge people (介词+which置于定语从句之首为正式语体); a proper standard we are to judge people by(省略作介词宾语的关系代词that为非正式语体) 。