Advocates of the market economy are often dismissed as heartless and deaf to the needs of the poor. "Social Darwinism" seems to be a label perfectly tailored to convey such an alleged preference for efficiency over humanity. The concept, as we know it and as President Obama likes to use it, is almost entirely the legacy of a single book: Richard Hofstadter's beautifully written and deeply misleading "Social Darwinism in American Thought".
Even a thoughtful writer such as John Kay, in an otherwise insightful article on the lessons of evolutionary thinking for economics and business, has fallen into the trap, somehow portraying Herbert Spencer as a "ludicrous figure" dear to those that like to play with eugenics.
Mario Rizzo offered a brilliant retort to Kay's misreading of Spencer. Spencer coined the sentence "survival of the fittest" but he made very clear that that was not the survival of the 'better' or even the 'stronger.' He used it as a value free concept: "the survival of those which are constitutionally fittest to thrive under the conditions in which they are placed."
"Social Darwinism", however, dances on such a misunderstanding, which allows it to remain current in today's debate. Besides eugenics, it is worth remembering that the other phenomenon Social Darwinism may be more typically associated with is imperialism. Spencer was vehemently anti-imperialist. He thought progress in society would help to moderate human aggressiveness and rejected "the passion for mastery" that made imperialism and slavery acceptable to so many of his contemporaries.
Matt Zwolinski has two excellent essays on Libertarianism.org (here and here), where he examines the charge of "Social Darwinism" laid on William Graham Sumner, another great critic of imperialism. Both for Spencer and Sumner the accusations of "Social Darwinism" call for debunking. Though their readers know how despicable and instrumental the charges are, labels tend to be sticky--but this doesn't make them any more appropriate.