Environment Quality in a Marxian Model of Reproduction

In this paper, a two‐sector model of production and reproduction with waste residuals and environmental pollution is developed. Assuming a subsistence real wage rate, a fixed method of production for each sector, a surplus of employable workers, and full utilisation of both produced inputs, the model is solved for aggregate output and employment, the level of environmental quality and the mass of surplus value. An hypothesis is advanced about the impact of recent technical innovations on profitability and environmental quality.