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In some ways, Higgs' work reads almost like a book review, but of an excellent reading list, not just one book. His basic premise is that the expansion of government, not just in degree, but in its basic legitimate level of intrusion into personal and economic life, was caused by three prongs. The first is ideology and ideological change, the second by historical events (path-dependency), and the third by a ratchet effect, whereby expansions in response to crises don't ever come back down to the pre-crisis level.
Higgs explains that "Ideologies--telling their adherents what was going on, whether it was good or bad, what ought to be done about it, and how one could maintain his identity by solidary action with like-minded comrades--helped to determine the amount and kind of political action." (p 259) Higgs points out that there are only a small number of relevant ideologies in play among the general public at any one time, and that there are a small number of people who form the core of determining what that ideology says and how it is promoted generally. By ruling in (or out) the permissible range of actions, largely through the assumptions inherent to the respective ideologies (and the mass of adherents generally don't reflect often or deeply, if at all, on those assumptions), the prevailing ideologies narrow the scope of realistic action when crisis happens (or is manufactured).
Enter the path dependency, the fact that "important 'accidents' do happen," and "whatever happens alters the likelihoods of particular further developments." (p 259) Therefore, "the development of Big Government was a matter not of logic, however complicated and multidimensional, but of history." (p 259) This leads to the outcome that "real political and socioeconomic dynamics are 'messier,' more open to exogenous influences or shocks and less determinate in their outcomes than the theorists suppose." (p 259) This almost makes Higgs sound like he is taking an anti-theoretical approach, though, of course, he has a theory with three prongs.
The third prong being what he describes as a ratchet effect, the fact that "Once undertaken, governmental programs are hard to terminate...each time the government expands its effective authority over economic decision-making, it sets in motion a variety of economic, institutional, and ideological adjustments whose common denominator is a diminished resistance to Big Government." (p 261)
Probably the single most important historical "accident" or event to act as a lever to magnify the ratchets when utilized in the hands of those holding the properly-inclined ideology was World War I and the institution of the draft. Once citizens (and courts) accepted the premise that their government could dispense with the lives of the citizens, all other sacrifices paled in comparison. Therefore there was no end to the intrusion of legitimate government intrusion into personal and economic space during crises like the Great Depression or later wars. Invariably, the maximum crisis powers and authorities would be scaled back at some point, but often agencies were renamed or subsumed into others, while continuing to function at some level and in a way novel to the status quo ante. Likewise, reinstituting emergency powers, etc., became much easier with precedents to point toward.
Higgs reveals in the preface to this anniversary edition that when he wrote the original, he believed in limited government, but now he is a convert to Anarchism. I applaud his belief in limited government and understand his disenchantment with the apparent inability of it to remain limited (for all the reasons the Founders foresaw and along the lines of other once-Liberal systems ossifying into more authoritarian molds, such as Holland). But as always, most Anarchists take an assumption of the human animal as solitary vice social (and are probably mirror-imaging when they do, failing to realize what an exception many of them are from the mainstream). In other words, in the history of the human race since the first adoption of settled agriculture, when or where can one point to a true "system" of Anarchy in place over a significant number of people for any real length of time? Even those places without recognized "government" have government, that is, the use or threat of violence and coercion considered legitimate by enough of the group to make it effective over most of the group most of the time.
Higgs presaged his own disenchantment in the original work, joining Joseph Schumpeter and a very small handful of other Liberal thinkers who were not overly sanguine about Liberalism's prospects, with the realization that it most likely was self-annihilating (I use the term "Liberal" and "Liberalism" according to their original meaning, as in "Liberty," and not in the more contemporary American usage of anti-Liberal "liberal" Progressivism). In his own words:
In one form or another, great crises will surely come again, as they have from time to time throughout all human history. When they do, governments almost certainly will gain new powers over economic and social affairs. Everything that I have argued and documented in the preceding chapters points toward this conclusion. For those who cherish individual liberty and a free society, the prospect is deeply disheartening. (p 262)
Indeed, the intervening years have confirmed Higgs' dark forecast, as the U.S. system, along with most of the rest of the (formerly) Liberal world, have embraced ever more Statist solutions and become full-on participatory Fascist systems, as Higgs suggested (and cited Charlotte Twight in reaching this conclusion). So is this the unavoidable fate of all free societies? At some point, when the Statism reaches the point noted by Margaret Thatcher, where you run out of other people's money, it will incinerate itself as well, though it is more than likely that a strongman (or woman) will rise from such ashes than a principled advocate for individuals. Still, as Higgs held out hope:
if ideas can gain sway through rational consideration in the light of historical evidence and moral persuasion, then there remains a hope, however slight, that the American people may rediscover the worth of individual rights, limited government, and a free society under a true rule of law. (p 262)
Higgs asks the question why crises prior to World War I did not lead to the same dramatic ratchet effect as WWI and later crises, and answers it mainly by suggesting the the prevailing ideologies changed during the "Progressive Era" and this opened the door, then highlighted the draft as a monumental lever in pushing through so much else. I would have gone a slightly different way. Once the national-level of the federal system began to refer to national institutions as "federal" vice "U.S." or "national," this represented a peaceful coup d'etat and overturning of the Constitution. The Federal Bureau of Investigations (established 1908) was not at all federal. It did not enforce a combination of local, state, and national laws, nor was it staffed with a mixture of local, state, and national personnel, nor was it funded as some kind of multi-level hybrid, etc. It was quite simply the National Bureau of Investigations, but by naming it "Federal," those behind it deliberately deceived their fellow Americans into thinking this was nothing new. After all, we've always been a "federal" system, right? Just so pretty much every other agency with the word "federal" found in its name. Once the national-level Leviathan successfully encroached on state authority, the rest of the subsequent growth was much easier, if not necessarily determined.
Higgs' marshaling of evidence is impressive and he scrupulously cites his sources, as well as provides numerous appendices. His assault on the field of econometrics is even more comprehensive than that of Murray Rothbard and worth reviewing on its own. However, his frequent citations leave one with a nagging feeling that maybe the reader could have skipped this and gone to the more frequently-cited sources to get it first-hand. Nonetheless, Higgs packages it all up in a very readable and not too-drawn-out format and it is well worth reading. If one seeks to understand why government, society, and life in the United States is so different today than in the 1890s or before, Higgs' work makes an excellent starting point. It is also a good source for insight into economics and Liberalism generally. Perhaps its greatest asset is its Bibliography, as Higgs goes over some terrific sources, and not all of them are in agreement with his thesis. A very good read, though not a must-read.