"The Time Machine" is primarily a social critique of H.G. Wells's Victorian England projected into the distant future. Wells was a Socialist for most of his life with Communist leanings, and he argued in both his novels and non-fiction works that capitalism was one of the great ills of modern society. Rapid growth in technology, education, and capital had launched the Industrial Revolution in the 17th- and 18th-centuries, and by the late 19th-century of "The Time Traveler," England was a leading force in the new economy: while industrialists reveled in their unbounded wealth, droves of men, women, and young children toiled long hours for meager wages in dirty, smoke-filled factories. While Charles Dickens won sympathy for the poor by sentimentally depicting their struggle, Wells chose to incorporate a number of scientific--both natural and social--ideas in his argument against capitalism.
Wells's major target is the often elitist branch of evolution, Social Darwinism. In "The Origin of Species," Charles Darwin argued that different environments encouraged the reproduction of those species whose varying traits best suited them to survive; their offspring, in turn, would be better adapted for the new environment, as would their offspring, and so on. Social Darwinism, developed by British philosopher Herbert Spencer, frequently misapplied this concept of "natural selection" to justify 19th-century social stratification between the rich and poor. The catch-phrase "survival of the fittest" (actually coined by Spencer, not Darwin; Spencer also popularized the term "evolution") does not mean the surviving members of an environment are the "best," but merely the best fit for their specific environment (for instance, Spencer's pale British skin would not survive long in sun-baked Africa). Therefore, evolution does not lead to the "perfectibility" of any species, as is generally perceived, but to the increasing adaptability and complexity of a species. Social Darwinism ignored this idea and contended that the social environment was much like the cutthroat natural environment, and that those who succeeded were biologically destined to do so and to continue in their march to human perfection. Conversely, those who failed were naturally inferior specimens of humanity.
In "The Time Machine," Wells shows first how far human evolution will go if capitalism continues unhampered: mankind will split into two distinct species, the ruling class (the Eloi in the novel) and the working class (the Morlocks). Furthermore, the advancements of civilization will not necessarily advance the species--quite the opposite, in fact. Their luxurious, carefree civilization has made the beautiful Eloi the weak, lazy, and stupid targets of the Morlocks; without an urgent need to survive, the Eloi have not needed to become more "fit," but have instead regressed. Therefore, even though man may evolve to adapt to his environment, the changing environment itself may make that evolution ultimately undesirable. Social Darwinism does not take this into account, and Wells's portrayal of the Eloi serves as an ominous warning to the ruling class who believes it is striving toward perfection.
To counter the notion of evolution as perfection, Wells brings in the concept of entropy (from the Second Law of Thermodynamics). The principle of entropy states that systems tend toward disorder and loss of energy over time. The Eloi seem to embody the effects of entropy; they are lazy, have little physical strength, and grow chaotically fearful when the Morlocks are near. But Wells truly shows his hand in Chapter XI, when the Time Traveler advances thirty million years into the future and witnesses the universe's gradual dissipation of energy.