It is worth reflecting back on this connection between how nature works and how modern economic thinking sees it working, because we are at an important inflection point in our history when we must question all the conventional wisdom thrown at us. Economic policy making has been dominated by Economic Darwinism, since the failure of Welfare State thinking in the 1970s, which crumbled under the pressure of bureaucratic trade unions and the shifting balance of the world economics. We will return to the demise of the Welfare State in a moment; but the Economic Darwinism, or the principally American Free Market philosophy has been on a roll ever since. And, after the demise of the Soviet Empire, which, though bureaucratic and inefficient, managed to instill a sense of balance in the world and kept the Free Market mercenaries somewhat in check, it became a Darwinian world in every sense. Somewhat like the world portrayed by Upton Sinclair at the end of Nineteenth century. I have travelled to Labour camps and construction sites in Dubai and had the feel of Sinclair's Chicago. I have watched Alan Greenspan on Tele, where, sitting in the middle of great human miseries caused by unchecked buccaneering of finance, he affirmed his faith on free markets and that it is still the most efficient system known to man. All in the name of Darwin and his laws of nature, note: Hence I believed that we should give the man a fair hearing and see what made him accept the 'survival of the fittest' as an idea.
My understanding is that Darwin was persuaded to accept the term 'Survival of the Fittest' by his collaborator and fellow traveller, Alfred Russel Wallace, and thought that the term 'avoided the troublesome anthropomorphism of selecting'. So, he wrote, in the fifth edition of the Origin, published in 1869, 'natural selection, or the survival of the fittest', implying a synonym, though he was aware that the new term is inherently restrictive and does not adequately convey the nuanced process of 'natural selection'. While this term 'survived', modern biologists used natural selection instead of 'survival of the fittest', because 'fittest' is understood, commonly, to mean 'in best physical shape', which is not what Darwin and his fellow researchers saw or meant.
There are primarily two reasons why 'survival of the fittest' is not what happens in nature. The first reason is - as Darwin observed - “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.” We do not seem to mean adaptability to change as one of the qualities of the 'fittest', and therefore, the term does take our attention away from what it takes to survive in the nature.
The second reason is that the term means that nature is biased against survival, except of only the 'fittest'. But, while some species are more adaptable than the others, all of them seem to survive. So, natural selection is actually about 'survival of the fit enough' and far more nuanced and diverse than the narrowness of 'survival of the fittest' seem to imply.
Besides, when applied in a social context, survival of the fittest seem to justify the winner takes all approach that reigns supreme in our time. It seems perfectly justified for an American to consume more of the oxygen available in the air and spew out some more Carbon Di-Oxide than the poor Somalian, because aren't Americans proved themselves to be a superior race? Darwin indeed talked about whole species, and not individuals or races, but we seemed to have taken out what fitted us best. As would have dinosaurs, if they were as intelligent. They would have surely thought, with their towering majesties, that they can adapt the laws of nature to suit their own laws of organizing, a sort of winner eats all philosophy. But they failed, so we might.
We are coming to the end of the Industrial Age in many senses. Not that our factories will stop working. But we seemed to have made tremendous progress in our material well-being in the last two centuries. We have created great products which complement our physical constraints - planes that fly us, cars that carry us over great distances at a considerable speed, weapons that allow us to destroy far beyond our own capabilities - and we are reaching its natural limits. We are starting to question whether more flights will essentially be good, whether faster cars are sustainable and what will we need more weapons for because we can already destroy the whole earth many times over. We are coming to an age where our cognitive limitations become more and more important. And, as Dan Airley puts it succinctly, we are far worse in dealing with our cognitive limitations than our physical ones.
So, while we can design great cars, we have so far failed to design a society which can fuel innovation and progress while ensuring that the less able is cared for adequately and the proceeds of our individual enterprise is shared fairly. The socialists failed miserably, and saw their ideas being abused by fatcat union leaders and bureaucrats who exercised their powers of life and death over their fellow citizens. While Marx and his band dreamt of a just society, they committed themselves to engineer a solution, which never ever worked in human societies. While they studied history endlessly, they failed to imagine a path to such society without coercion. They made the same mistake which their opponents, Capitalism's apologists, made - they assumed that the essential, biological, characteristic of man is crooked, inconsiderate, selfish and driven by immediate and existential pleasure, and the guiding hand of the market will essentially lead us to an unjust society. And, while their experiments spawned some reaction on the capitalism's side, notably the idea of welfare state in Europe, this was inherently inconsistent with the system of capitalist economics and finance, and this eventually crumbled under the pressure of its own illogical existence.
However, we are coming at a point where we must address our cognitive failures to move on. In nature's scheme of things, the species that eats itself is necessarily the weakest, because it eventually will run out of ways of reproducing and sustaining itself. While we revelled in the glory of our industrial creation, we have fast tracked ourselves to a point where we may end up altering the balance of nature irreversibly - the same nature that sustained us and helped us come this far. We have also discriminated against our own - against the blacks and browns, against women, against the aged and the children of lesser races, against the homosexual and everyone else who do not act and think exactly like our own. And, we justified all of this in the name of our understanding of the natural laws, though we substituted the scientific understanding of this law by something that suited us - 'survival of the fittest'.
I have found the Wikipedia articles on Survival Of the Fittest, Charles Darwin, Herbert Spencer and Alfred Russell Wallace of enormous help.