BOOK REVIEW 69 homogenising labour, with disastrous consequences for labour-related welfare. This analysis of the nature of labour, in turn, leads to an examination of the controversies in the labour theory of value. In my opinion, an important aspect of Pagano*s book is his emphasis on the differences between the theories of Smith, Ricardo and Marx. There is often a tendency to represent classical political economy as a linear development of the labour theory of value, which accordingly emerged in a crude form with Smith, was systematised by Ricardo, and culminated in a sophisticated version with Marx. It is undoubtedly true that a common tradition of classical political economy does exist, but the communality has often been over-stressed, to the exclusion of of some very important differences between Smith, Ricardo and Marx. Pagano's work is important because he does not stop short at distinguishing the well-known fact that Marx, unlike Smith and Ricardo, had a concept of the mode of production. Instead, he roots the differences between these writers in the way in which each of them visualised the nature of labour. According to Pagano, while Smith was unclear about certain aspects relating to the division of labour, he was nevertheless very perceptive about the implications of types of division of labour for the welfare of the worker. For Smith, labour in general is non-homogenous because certain activities are profoundly disagreeable or alienating. His shift from the labour-embodied theory of value to the labour-commanded theory of value was because of his acute awareness of the non-homogeneity of labour, which could not be captured by the labour-embodied theory of value. On the other hand, according to Pagano, Ricardo ignores the fact that different types of activities are differently agreeable to the workers, and that disagreeableness is a fundamental element in defining labour itself. The only non-homogeneity that Ricardo is willing to concede is skill differences, and this makes possible the reduction of skilled labour to abstract unskilled labour. While this makes an application of the labour-embodied theory of value possible, Pagano argues that the Ricardian analysis is very limited in its approach, for it assumes that the workers derive welfare only from consumption goods and are indifferent to the allocation of their labour-power among different activities. Pagano argues that for Marx, the assumption of homogenous labour is in general not justifiable as a characteristic defining labour. However, Marx argues that such an assumption is a close approximation to reality under capitalism for two reasons. Firstly, it is possible to reduce labour of varying skills to abstract unskilled labour, as Ricardo had maintained. Secondly, and more importantly, for Marx the division of labour under capitalism is equally stultifying across activities, and it is this which justifies the assumption of homogenous labour. Pagano argues that this difference between Ricardo and Marx is crucial, because according to Marx, the general level of welfare of the worker is