This is a translation from the second German edition of a book which first appeared in 1911 and has since that time been translated into Italian and French and is about to appear in Japanese. Fundamentally it is an attempt at framing a purely theoretical description of the nature and mechanism of economic change or evolution, its motive power, and the phenomena incident to it. Although the book aroused much controversy when first published, the general view and some of the individual theorems have been gaining ground and have exerted considerable influence on contemporary work in Europe and in America.