The Machinery Question reloaded (fg)

I think every undergraduate student will at some point be confronted with the machinery question first posed by David Ricardo, i.e. the negative effects of labor-saving techincal progress for the demand for labor, the number of jobs and the level of output. Knut Wicksell, however, employed a more or less same model to show that under somewhat different technical (but more realistic) model assumptions, labor-saving innovations indeed create jobs rather than destroying them. In a nutshell, Wicksell argued that the freedom of wages to fall to marketclearing levels where labor receives its marginal product promotes the re-hiring of displaced workers. I found a worth-reading review of the Ricardo-Wicksell debate written by Thomas M. Humphrey who already explained in a comprehensive manner the cost-push fallacy (especially for students) in another paper.