The Power of Independent Thinking

Liberty in Peril
Democracy and Power in American History
Randall G. Holcombe (Author), Barry R. Weingast (Foreword)
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Randall G. Holcombe (Author), Barry R. Weingast (Foreword)
Hardcover • 272 pages • 1 table • Index
ISBN-13: 978-1-59813-332-5
Publication Date: Sep. 1, 2019
Publisher: Independent Institute
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Liberty in Peril
Democracy and Power in American History
Randall G. Holcombe (Author), Barry R. Weingast (Foreword)
List Price: $24.95
Price: $20.95
Discount: $4.00 (Save 16%)
Free Shipping On Orders Over $60! (Within U.S.A.)
Or, Become a Member and Get FREE!
Hardcover • 272 pages • 1 table • Index
ISBN-13: 978-1-59813-332-5
Publication Date: Sep. 1, 2019
Publisher: Independent Institute
Educators: Request exam copy
Bulk discounts available: Learn more
Hardcover (ISBN 978-1-59813-332-5)
Click to expandeBooks


When the United States was born in the revolutionary acts of 1776, Americans viewed the role of government as the protector of their individual rights. Thus, the fundamental principle underlying the new American government was liberty. Over time, the ideology of political “democracy”—the idea that the role of government is to carry out the “will of the people,” as revealed through majority rule—has displaced the ethics of liberty. This displacement has eroded individual rights systematically and that history is examined in Liberty in Peril by Randall Holcombe in language accessible to anyone.

The Founders intended to design a government that would preclude tyranny and protect those individual rights, and the Bill of Rights was a clear statement of those rights. They well understood that the most serious threat to human rights and liberty is government. So, the Constitution clearly outlined a limited scope for government and set forth a form of governance that would preserve individual rights.

The federal government’s activities during two world wars and the Great Depression greatly increased government’s involvement in people’s lives. By the time of Lyndon Johnson’s “Great Society,” the depletion of rights and the growth of the activities of political democracy was complete. By the end of the 20th Century the fundamental principle underlying the U.S. government was now political power and not liberty. Public policy was oriented toward fulfilling the majority rule with the subsequent increase in government power and scope.

Holcombe argues that economic and political systems are not separate entities but are intimately intertwined. The result is a set of tensions between democracy, liberty, a market economy, and the institutions of a free society. All those interested in the evolution of American government, including historians, political scientists, economists, and legal experts, will find this book compelling and informative.


Table of Contents


  1. Liberty: The Revolutionary Cause
  2. Liberty and Democracy as Economic Systems
  3. Consensus versus Democracy: Politics in Eighteenth-Century America
  4. Constitutions as Constraints: The Articles of Confederation and the Constitution of the United States
  5. The Growth in Parties and Interests before the War Between the States
  6. The Impact of the War Between the States
  7. Interest Groups and the Transition to Government Growth: 1870–1915
  8. Populism and Progressivism
  9. The Growth of the Federal Government in the 1920
  10. The New Deal and World War II
  11. Democracy Triumphs: The Great Society
  12. The Dangers of Democracy

About the Author

Detailed Summary

Summary PDF
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  • In 1776, a typical American believed liberty to be the fundamental concept underlying the new republic. Today, most people would say it was democracy. The shift from liberty to democracy represented an ideological sea change for the nation. Liberty in Peril recounts historical events that led to this shift, as well as its consequences: an expansion of the scope of the federal government and a shift in the way citizens viewed the role of their government, from that of protector of individual rights to that of promoter of mostly egalitarian ideals—and the unacknowledged problems this transformation has created.
  • It took less than two centuries for the United States to shift from a liberty ethos to a democracy ethos. Pundits often ignore this development, but the oversight perpetuates distorted views of history and current events. The distortions are profound because the clash between liberty (understood by the Founders as freedom encumbered only by individual-rights protections) and democracy (majority rule on a growing array of issues) is fundamental and pervasive: it’s a philosophical conflict played out daily in the nation’s courts, in media headlines, and in minds of a populace bewildered and disheartened by the decline of the American dream.
  • The Progressive Era was a turning point in the way Americans viewed the role of government. Progressive intellectuals and politicians championed an expansive role for the federal government, one that sought to actively promote people’s economic well-being while also protecting their rights. At first, the Progressives aimed mainly at limiting the economic power of the nation’s new industrialists, but soon they sought to create and expand safety-net programs like Social Security, which looked out for the financial health of older Americans, and welfare programs that targeted the most economically disadvantaged.
  • President Lyndon Johnson’s Great Society was the triumph of democracy. Until the 1960s, the federal government expanded in scope and power mainly in response to what people perceived were major problems. In contrast, Johnson’s Great Society reforms were enacted at a time when things were getting better. They established anti-poverty programs as poverty rates were falling and health care programs as health indicators and life expectancy were improving. The Great Society programs were created because they were popular, and firmly established democracy as the primary principle underlying government, displacing liberty.
  • When public policy is designed to further the interests of citizens as determined by democratic decision-making, liberty is threatened because policies favored by a majority have often compromised individual rights. Even more threatening, well-organized minorities can often use the democratic decision-making process to further their interests at the expense of the majority.


The United States of America was, as Lincoln famously said, “conceived in liberty,” but in less than two centuries a different lodestar became fixed in the cultural firmament: the principle of democracy. The move from Liberty to Democracy was a seismic shift in the political landscape, with profound implications for virtually every area of public life. In Liberty in Peril: Democracy and Power in American History, public choice economist Randall G. Holcombe tells the story of this remarkable transformation—and the often-ignored threat it poses to individual rights and the constitutional ethos that seeks to limit the immense power wielded by governments.

Both a deep analysis of the nation’s changing norms and institutions and a wake-up call for the American people to rekindle the flame of liberty before it’s fully extinguished, Liberty in Peril provides the badly needed intellectual firepower to halt the juggernaut, restore the primacy of individual rights, and, as the preamble to the Constitution promises, “secure the blessings of liberty.”

The Principle of Liberty

Holcombe begins by discussing the sweeping intellectual and philosophical changes in Anglo-American thought that culminated in the American Revolution. Prior to the Founding Era, people viewed themselves as subjects of their governments and saw it as their duty to carry out the mandates of their rulers. The political ideas of the Enlightenment challenged this view, Holcombe explains. The British philosopher John Locke (1632-1704) laid the groundwork, arguing that individuals naturally possess rights and that the role of government is to protect those rights. If government did not fulfill its role, citizens have the right to replace it. These radical ideas were further popularized by Cato’s Letters in the 1720s and widely reprinted.

Although the American colonies were marked by regional differences and lingering loyalties, the new ideas about rights and government eventually united the colonies to secure the liberty of their citizens from the usurpations of King George III. The Declaration of Independence is primarily a list of grievances against the king, enumerating the ways he had violated the rights of the colonists. Yet woven into this indictment is a philosophical manifesto. It’s key principle—that people have the right to declare their independence and to create a new government when their rights are systematically usurped—makes the Declaration a major landmark in Western political thought.

Consensus vs. Democracy

The budding nation embraced liberty, consensus building, and representative government “for and by the people,” but not democracy per se. The Articles of Confederation (1781-1789) enabled the states to coordinate their efforts to break away from Britain, but questions arose about the role of the federal government after independence was secured. Some former colonists called for retrenchment, whereas others called for new federal powers such as the ability to raise revenue directly, without having to rely on the states. The convention called in 1787 was supposed to amend the Articles of Confederation, but it resulted in the completely new Constitution of the United States of America and a more powerful federal government, one less constrained by the states. This marked a major shift away from the principle of consensus in governance, toward the ideology of democracy.

Popular Opinion and Public Policy

The Constitution designed a government justly celebrated for its system of checks and balances, in which the three branches of government would hold each other to account and thereby curb abuses of power. For this to work, the executive branch, the judiciary, and the legislature must have roughly equal power. By deliberate design, the federal government was created to have little direct accountability to its citizens. Only half of the legislature, the House of Representatives, was to be directly chosen by citizen vote.

Senators originally were chosen by their state legislatures to represent the interests of their states. For national legislation to pass Congress, therefore, it had to meet the approval of both the representatives of the people, in the House, and the representatives of the state governments, in the Senate. This changed in 1913 with ratification of the 17th Amendment, which enabled citizens to directly elect Senators from their state and made the nation become more democratic.

Members of the judicial branch have always been appointed by the president and confirmed by the Senate, with no limit on their terms once appointed. These provisions insulated federal judges from democratic pressures. The president was to be chosen by an electoral college and the House of Representatives, insulating the chief executive from democratic pressures. The process for electing the president never worked as the Founders intended.

Electors from each state were to cast votes for presidential candidates. The Framers hoped this provision would ensure that most electors would vote for favorite son candidates from their states (thus, the requirement that electors vote for two candidates, at least one of whom was from a different state). The Framers believed that in most elections no candidate would get votes from a majority of electors, in which case the top five electoral vote recipients (amended to the top three in the 12th Amendment) would be sent to the House of Representatives. Thus, the electoral college was to act as a search committee, with members more knowledgeable than the general public, and the House would choose the president from among the top candidates. The Constitution, however, has never specified how states were to choose their electors, and the states rapidly moved toward popular voting for electors, creating the system that remains in place today.

Federal Growth and Democratic Accountability

The culture’s shift from a liberty-oriented ethos to a democratic one has been often gradual but sometimes punctuated by major

upheavals. The move toward popular voting for presidential electors was one step in the process. Andrew Jackson’s election to the presidency. The first president elected as a member of the Democratic party, but Jackson was also a democrat in the ideological sense, holding that the government should be checked by greater oversight from its citizens. The War Between the States gave the federal government considerably more power, partly because the scope of government increased as a result of the war, but even more because it established federal power over the state governments. The federal government, originally established as a federation of states, effectively became a national government.

In the first half of the twentieth century, two World Wars and the Great Depression further increased the scope of government, and the ideology of Progressivism increasingly oriented the government toward responding to democratic pressures. Those pressures in the first half of the twentieth century focused mainly on addressing the challenges of war and the economic hardship of depression. The popular idea that the government should do something to address those issues conveyed more power to the government, even as it threatened to compromise liberty.

The Progressive Challenge to Liberty

The ideology of Progressivism champions an expanded role for the state, with government looking out for people’s economic well-being as well as protecting their traditional rights. Progressivism gained popularity in the late 1800s, largely in response to the rise of economic power wielded by industrialists and financiers such as Rockefeller, Vanderbilt, Carnegie, and Morgan. Progressives wanted government to restrain the use of economic power to prevent the so-called “robber barons” from taking advantage of those with less economic power.

Progressivism wa s inherently redistributive from the start. It legitimized the use of government coercion to impose costs on some for the benefit of others. Originally, those who would bear the costs were people with concentrated economic power, but as the ideology of Progressivism developed, anybody could be required to bear costs to benefit others. Social Security imposes costs on workers to provide benefits to the elderly, and Medicaid imposes costs on all taxpayers to provide health care to those with lower incomes. As new programs were developed, the questions about who should bear the costs and who should receive benefits were decided through a democratic decision-making process.

The Great Society and Beyond

When Lyndon Johnson launched his Great Society’s War on Poverty, poverty rates had already been showing substantial declines; and Medicare and Medicaid were created even as Americans’ health indicators and life expectancies were improving. Those programs were established not because new problems had arisen, but because of popular demand. The ideology of democracy had displaced the ideology of liberty, and Americans had adopted the idea that democratic government should do what citizens want it to do, as determined through a democratic political process.



Liberty in Peril is an important book. It seeks to show the transformation of the underlying ideology of American government since the Revolution from commitment to the principle of individual liberty to the principle of democracy—that government should be responsive to the will of the people. It combines sophisticated—but easily readable—economics with sophisticated political science and a deep historical interpretation of changes in American politics over this period which have completed the transformation. It is an outstanding political and economic history of the U.S.”
George L. Priest, Edward J. Phelps Professor of Law and Economics, Yale University

“Randall Holcombe’s Liberty in Peril illuminates the forces that have shifted power and responsibility from individuals to government, and from local to centralized government, throughout American history. This timely reminder is must reading for all those concerned with the erosion of, and new threats to, the legal rights and liberties that form the core of a successful society.”
Michael J. Boskin, former Chairman, President’s Council of Economic Advisors; T. M. Friedman Professor of Economics, Stanford University; Wohlford Family Senior Fellow, Hoover Institution; Research Associate, National Bureau of Economic Research

Liberty in Peril is a gem. Randall Holcombe traces the inexorable growth of government through war and peace, from railroads to autos, and during prosperity and depression.”
Burton W. Folsom Jr., Distinguished Fellow, Hillsdale College; author, New Deal or Raw Deal? How FDR’s Economic Legacy Has Damaged America and FDR Goes to War: How Expanded Executive Power, Spiraling National Debt, and Restricted Civil Liberties Shaped Wartime America

“The Independent Institute has been leading the way for some time in asking uncomfortable questions about a disturbing tendency: the transformation of the American government and market system toward cronyism. In his marvelous Independent book, Liberty in Peril, Holcombe lays bare the case in careful detail. Using the interest group model of public choice, Holcombe is able to show the slow but cumulatively catastrophic changes that have taken place, punctuated by a few crises of the type Robert Higgs has emphasized for decades. The problem, at its base, has been the erosion of the protections for liberty in favor of populist ‘democracy.’ I hope that this timely and well-written call to action can motivate a consideration of the limits, and the need to limit, the dangerous impulses of interest-group politics.”
Michael C. Munger, Professor of Political Science, Economics and Public Policy and Director of the Philosophy, Politics, and Economics Program, Duke University

“Every new book by Randy Holcombe is a pleasure to read. Clearly written, insightful, thought-provoking and of high importance to the state of the world, Liberty in Peril is no exception. The book describes how fundamentally the U.S. has changed as a political system, and how the ideals of individual liberty, limited government and separation of powers have eroded. It should be read by everyone concerned about the growth and abuse of government power, no matter whether it is done by the left, the right or the center.”
Peter Kurrild-Klitgaard, Professor of Political Science, University of Copenhagen, Denmark

“In Liberty in Peril, Randall Holcombe dissects the commonplace assertion that democracy and liberty support one another and rejects it. His rejection is based on a careful analysis of the working properties of democratic institutions and processes. Any reader looking to find a short and readable explanation of how political democracy can erode personal liberty should read this book.”
Richard E. Wagner, Holbert L. Harris Professor of Economics, George Mason University

“Liberty for individuals guided the U.S. founding fathers. Randall Holcombe gives a powerful explanation as to why over time liberty gave way to the ‘will of the people’ or ‘democracy.’ Citizens get what they think they want but do not fully appreciate the loss of liberty. Liberty in Peril is a welcome wake-up call about the stakes at play.”
Lee J. Alston, Ostrom Chair, Professor of Economics and Law, and Director of the Ostrom Workshop at Indiana University

“Holcombe’s well-written book Liberty in Peril provides the reader with a clearly stated explanation of how the grand American experiment, which began as a republic formed by people who prized liberty, evolved to become a highly politicized ‘democratic’ economy. Taking a bold political economy approach, the book is brimming with fresh constitutional comparisons and historic treatments. Woven together, they yield a coherent story of how, over the course of our history, liberty, broadly speaking, has been systematically compromised. Liberty in Peril is a must read for those who wish better to understand the deep roots of America’s politically intertwined economy.”
Bruce Yandle, Alumni Distinguished Professor of Economics Emeritus and Dean Emeritus, Clemson University

“Individual liberty and democratic self-government, the twin ideals on which the United States were founded, do not co-exist in perfect harmony. Aware of this fact the Founders designed a constitutionally limited government to guard against the threat majoritarian democracy may pose to individual liberty. Holcombe’s book Liberty in Peril is about how over time a growing role of majoritarian rule and direct popular vote worked to erode the constitutional constraints the Founders intended, resulting in continuous government expansion and spreading interest group politics. With his detailed and instructive historical account Holcombe demonstrates the causes that are behind and the mechanisms that have propelled this transformation. His sobering account of the evolution of American democracy calls for renewed inquiry into the problem the Founders sought to solve: How to limit democratic self-government by constitutional constraints that effectively protect individual liberty and keep interest-group politics in bound.”
Viktor J. Vanberg, Professor Emeritus of Economic Policy at Freiburg University and former Director and Senior Research Fellow of the Walter Eucken Institute

Liberty in Peril is pure Holcombe, with a fine linear lucid narrative that presents the gradual disencumbering of the Federal Government from constitutional constraints as a shift from a government conceived in liberty to one emphasizing ‘democracy.’”
Roger D. Congleton, BB&T Professor of Economics, West Virginia University

“To protect individual liberty or to promote the general welfare—which is the proper role of government? Charting the 200-year transformation of American government from the former to the latter, Randall Holcombe’s book Liberty in Peril is a masterful work of U.S. political-economic history. Learned and scholarly, yet fun and accessible, Liberty in Peril is perfect for anyone interested in ‘how we got here.’”
Edward J. López is Professor of Economics and BB&T Distinguished Professor of Capitalism, Western Carolina University; and Executive Director, Public Choice Society

“Randy Holcombe’s book, Liberty in Peril, continues his intensive study of American political and economic history which he began in From Liberty to Democracy. In this latest work, Holcombe argues that wars and interest groups have eroded America’s emphasis on liberty and replaced it with an emphasis on ‘democracy.’ From the Revolutionary War through the New Deal, he finds government interventions increasingly detrimental to freedom and to the American Republic. If you like thought-provoking and provocative arguments, you will certainly enjoy Liberty in Peril.”
Keith L. Dougherty, Professor of Political Science, University of Georgia

“In the valuable and accessible book Liberty in Peril, Randall Holcombe reminds us that a government of the people, for the people, and by the people once meant—and should once again mean—far more than just counting up the votes.”
Richard N. Langlois, Professor of Economics, University of Connecticut

“In his book Liberty in Peril, Florida State University economist Randall Holcombe argues that democracy was not the way the country is supposed to work. Our founding philosophy was that liberty should prevail, not democracy—that the reason for government was to protect the individual’s freedom, not to subject him to the will of the majority. Over time, the philosophy of liberty has been shoved aside and today democracy rules to the point where, as the author puts it, liberty has an almost quaint air about it. As Holcombe’s subtitle suggests, this is a work of history, explaining the nation’s shift from the ideology of liberty to the ideology of democracy. He observes that there is a tension between the two. Under the ideology of liberty, the important question is how to put limits on government so that it can protect individual rights. Under the ideology of democracy, the question is who will hold power to do what the public wants. Where the former prevails, the people tend to have a healthy wariness of government and desire to keep it in check. Where the latter prevails, the people eagerly listen to politicians who promise them benefits from the government. . . . Can anything rekindle the love that Americans once had for liberty and reverse the ratchet of government control? That is the question this excellent book leaves readers wondering.”

“We often think of liberty and democracy as complements, even two sides of the same coin. Randall G. Holcombe begs to differ. Americans in the founding era championed liberty, and founded a constitutional republic to secure it. In the modern era, however, Americans champion political ‘democracy’ instead, which, Holcombe argues, has come at the expense of liberty. In the provocative and timely volume, Liberty in Peril, Holcombe confronts us with the steady loss of liberty in America, and offers a bold argument for a return to the ideals that made America the land of the free.”
James R. Otteson Jr., Thomas W. Smith Presidential Chair in Business Ethics, Professor of Economics, and Executive Director of the Eudaimonia Institute, Wake Forest University

Liberty in Peril is spot on! Holcombe is right to say that we have lost so much of the liberties upon which our nation was founded. His book should be read by anyone who cares about the future of freedom from government tyranny.”
Robert A. McGuire, Adjunct Research Professor of Economics, The University of Akron; author, To Form A More Perfect Union: A New Economic Interpretation of the United States Constitution

“When I took history and government in school, many critical issues were misrepresented, given short shrift or even ignored entirely. And those lacunae undermined my ability to adequately understand many things. Randall Holcombe’s new book, Liberty in Peril: Democracy and Power in American History, fills in some very substantial gaps, particularly with regard to American constitutionalism and how it has morphed from protecting liberty to advancing democracy at the expense of liberty. And it does so with a host of novel and important insights, rather than the disinterest generated by the books I suffered through in school. . . . Liberty in Peril challenges the typical current presumption that liberty and democracy are complementary. . . . The book also challenges commonly held presumptions that our Founders wanted democracy. . . . Holcombe lays out issues of consensus versus democracy, with consensus illustrated by market systems, in which all those whose property rights are involved agree to transactions. . . . Another notable aspect of Liberty in Peril is how far beyond the typical discussion of constitutional issues it goes, substantially expanding readers’ understanding in intriguing ways. . . . But there is far more in the book to learn from, and often be surprised by, in comparison to what history courses usually teach. . . . there are very many good reasons to recommend Liberty in Peril. In it, Randall Holcombe provides not just a powerful and insightful look into crucial aspects of America’s evolution away from the principles of the revolution that created it, but also an important warning: ‘Unfortunately, many Americans do not appear to fully understand these dangers as they continue to push the foundations of their government away from liberty and toward democracy.’”

“When asked what system of government is found in the United States, nearly everyone would respond, ‘Democracy.’ While incorrect, people can be forgiven for this error. Americans and their leaders for decades have referred to the government as a democracy and touted the ‘democratic’ ideals they believe to be enshrined in the Declaration of Independence and the U.S. Constitution. Now comes Independent Institute’s latest book—Liberty in Peril: Democracy and Power in American History—to set the record straight and to reveal through the author’s chronicle of the subtle and destructive shift from liberty to democracy that has seen the United States slouch closer to a Roman conclusion. . . . There is so much invaluable information contained within the covers of Holcombe’s Liberty in Peril. The historical narrative set forth by the author is accurate and supported by an impressive bibliography.”
The New American



2020 American Book Fest “Best Book” Awards

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  • Finalist in Social Change

2020 International Book Awards (American Book Fest)

  • Winner in History: United States
  • Finalist in Social Change

2020 Next Generation Indie Book Awards

  • Finalist in Current Events/Social Change

14th Annual National Indie Excellence Awards

  • Winner in Political
  • Finalist in History U.S.

2021 Eric Hoffer Book Award

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“Human Action: Foundations for the Modern Austrian School” Senior Fellow Randall Holcombe, author of Liberty in Peril, presentation at the 2024 Human Action Conference in Auburn, AL. Mon., May. 20, 2024
“Capitalism!” Sr. Fellow Randall Holcombe, author of Liberty in Peril interviewed on the Shaun Thompson Show on WIND radio Wed., Apr. 5, 2023
“The Fed and Inflation” Research Fellow Randall Holcombe, author of Liberty in Peril interviewed on the Gary Nolan radio show Fri., Nov. 11, 2022
“Biden’s Plan to “Tax the Rich” Will Cost the Middle Class” Sr. Fellow Randall Holcombe, author of Liberty in Peril Op-Ed in American Institute for Economic Research Wed., Nov. 10, 2021
Research Fellow Randall Holcombe, author of Liberty in Peril mentioned on Cafe Hayek Sun., Oct. 17, 2021
“Reversing Government Control” Liberty in Peril by Research Fellow Randall Holcombe is reviewed in Regulation (pdf) Wed., Jan. 13, 2021
“COVID-19 Policies Place Liberty in Peril” Research Fellow Randall Holcombe, author of Liberty in Peril Op-Ed in The Hill Tue., May. 19, 2020
Liberty in Peril by Research Fellow Randall Holcombe cited on Cafe Hayek Wed., Jan. 15, 2020
“Why America’s Founders Didn’t Want a Democracy” Liberty in Peril by Research Fellow Randall Holcombe is reviewed on Tue., Dec. 17, 2019
Liberty in Peril: Democracy and Power in American History by Research Fellow Randall G. Holcombe is reviewed in The New American Sun., Nov. 24, 2019
“Randall Holcombe on Protecting Liberty” Research Fellow Randall Holcombe, author of Liberty in Peril is interviewed on Challenging Opinions podcast Wed., Nov. 13, 2019
Liberty in Peril by Research Fellow Randall G. Holcombe is reviewed in The Midwest Book Review Tue., Oct. 22, 2019
Research Fellow Randall G. Holcombe, author of Liberty in Peril appears on the Bob Zadek radio show Sun., Sep. 29, 2019
“Could Our Next President Be a Libertarian?” Research Fellow Randall G. Holcombe, author of Liberty in Peril Op-Ed in The Hill Wed., Sep. 25, 2019

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