David Gordon has a fascinating piece on Social Darwinist defenses of capitalism:

[I]t is difficult to find writers who called themselves “social
Darwinists.” But some of Obama’s critics have gone too far. Jonah
Goldberg, e.g., treats social Darwinism as largely a myth for which
Richard Hofstadter, the author of Social Darwinism in American Thought (1944), bears primary responsibility.

Simply put, there was no intellectual movement — at least not in
America or Britain — called Social Darwinism, and the evil views
attributed to so-called Social Darwinists were not held by its alleged
founders…. [Richard] Hofstadter, the historian who essentially invented
the idea that American capitalism in the nineteenth century was inspired
by Charles Darwin, never offered much by way of actual proof that his
idea was accurate. (Jonah Goldberg, The Tyranny of Clichés, Sentinel, 2012, pp. 102, 110)

Goldberg’s thesis is not correct. There really were a number of people who defended capitalism with quasi-Darwinist arguments.

When Gordon singled out Colgate University President George Cutten as a prime example of a pro-capitalism Social Darwinist, I was briefly tempted to object, “Wouldn’t Irving Fisher be a much more prominent case?”  Fisher really was a raving Social Darwinist.  He vociferously opposed World War I not because it was a senseless bloodbath, but because it was a dysgenic senseless bloodbath:

If war would weed out only the criminal, the vicious, the feeble-minded,
the insane, the habitual paupers, and others of the defective classes,
it might lay claim, with some show of justice, to the beneficent virtues
sometimes ascribed to it.

But the truth is that its effects are
diametrically opposite.  It eliminates the young men, who should be the
fathers of the next generation – men medically selected as the largest,
strongest, most alert, and best endowed in every way…

less endowed fellows, medically rejected from military service, because
of defects in stature, eyesight, hearing, mentality, &c, are left at
home to reproduce the race.

But then I remembered: While Fisher was a pretty free-market economist, he didn’t derive his Social Darwinism from free-market economics.  In fact, he explicitly admitted that the two perspectives yield opposite conclusions.  See Fisher’s take on immigration:

The core of the problem of immigration is, however, one of race and eugenics. If we could leave out of account the question of race and eugenics I should, as an economist, be inclined to the view that unrestricted immigration, although injurious to some classes, is economically advantageous to a country as a whole, and still more to the world as a whole. But such a view would ignore the supremely important factors… Our problem is to make the most of this inheritance [of the 8,000 immigrants who arrived before 1741]. We can not do so if that racial stock is overwhelmed by the inferior stock which “assisted” immigration has recently brought. (“Impending Problems of Eugenics” [1921])

Where do economics and eugenics diverge?  Contrary to my colleague David Levy, it’s not that economics is somehow egalitarian.  The difference, rather, is that economics, unlike eugenics, is not misanthropic

Economics doesn’t point to people and say, “Look what they can’t do.”  Economics instead asks, “Well, what can they do?”  If the answer is “something productive,” then the Law of the Comparative Advantage implies gains to trade.  Economics, known for its hard-headed methods, culminates in an optimistic and humane conclusion: Regardless of their Darwinian “fitness,” the existence of people – even those well below average – makes the world a better place.