Will smart machines do to humans what the internal combustion engine did to horses – make them obsolete? If so, can putting people out of work or, at least, good work leave them unable to buy what smart machines produce? Our model’s answer is yes. Over time and under the right conditions, supply reduces demand, leaving everyone worse off in the long-run. Carefully crafted redistribution policies can prevent such immiserating growth. But blunt policies, such as limiting intellectual property rights or restricting labor supply, can make matters worse.