David Boaz has already explained how "social darwinism" is nothing more than a nasty smear. The term was made popular by Richard Hofstadter in his Social Darwinism in American Thought. Hofstadter aimed to bring to justice the business titans of the Gilded Age by targeting authors that he identified as the most relevant preacher of gospel of business, like Herbert Spencer and William Graham Sumner.
Hofstadter, in his own words, "hated capitalism" and wanted to unveil its ultimate sins, by showing the hidden side of its intellectual family tree. If the source of legitimacy of capitalism lay in the "survival of the fittest," then capitalism itself was to be a close relative of racism, imperialism, and eugenics.
For the American historian, thus, Social Darwinism presented itself both under an individualist and a collectivist kind. The first preached free enterprise, the second aggression and militarism.
Hofstadter maintained that "a resurgence of social Darwinism, in either its individualist or imperialist uses, is always a possibility so long there is a strong element of predacity in society."
Hofstadter was a gifted writer and, largely for that reason, Social Darwinism in American Thought was a hugely influential book -- and as such a mine of catchwords for propagandists. Its inaccuracies have long been exposed. In defending himself from Robert Bannister's criticisms, Hofstadter pointed out that "intellectual history . . . proceeds by more gross distinctions than you are aware of." This is a rather elegant way of saying that intellectual history can be written with clear ideological goals in mind.
Of these "gross distinctions," as Boaz already noted, Herbert Spencer is a quintessential victim. Spencer is considered a "Social Darwinist," even though some of his most relevant writings predate Darwin, because he coined the sentence "survival of the fittest" as a way to convey the concept of "natural selection." It was a happy coinage, for the sentence still survives, but people consider it a proof of his preference for a dog-eat-dog system of political economy.
Spencer is a complex author, and sometimes he wrote in very blunt language. However, if Social Darwinism is about "predacity" in a political system, one thing is clear: Spencer thought that history was proceeding in a direction that minimized "predation," a direction he favored and held dear.
Spencer was convinced that "political organization is initiated by war and develops with the continuance of war," but with time society moves from "militancy" to "industrialism." This is how progress works: human groups move from simple to more and more complex aggregates, characterized by increasing heterogeneity and "definiteness of its individual members." In larger and more developed human societies, not only division of labor is more extended: but eccentricities are allowed to flourish and individuality becomes more pronounced. In military societies individuals are nothing but the slaves of the group. In industrial societies, social relationships are free and consensual.
Spencer was a committed pacifist -- a fact so outstandingly clear from his writings, that even Hofstadter cannot ignore it. Without much further exploration in his works, one can just read this short piece from "Facts and Comments" to understand how dear the issue of peace was to him. In economic matters, Spencer thought that his "law of equal liberty" implied that each ought to receive the benefits and bear the evils entailed by her actions. No one should be shielded from her mistakes: Spencer wouldn't have supported "too-big-to-fail" crony capitalism.
But if this was "Justice", Spencer also believed justice needed to be complemented, in an industrial society, by "negative beneficence" and "positive beneficence". This is not the place to get into details, but suffice to say that the British philosopher thought that "sympathy which prompts alleviation of others' pains is the same sympathy which makes possible the participation in others' pleasure, and therefore exalts personal happiness."