Since its founding in 1954 the Texas Observer, a biweekly journal published in Austin with a circulation of around 19,000, has been the state's leading journalistic voice for social justice from progressive perspectives. Among the founders were J. R. Parten, Frankie C. Randolph, Jesse Andrews, Bob Eckhardt, and Chris Dixie of Houston; Minnie Fisher Cunningham of New Waverley; Lillian Collier of Mumford; Franklin and Huldah Jones of Marshall; Otto Mullinax, Don and Ruth Ellinger, and Fred and Venola Schmidt of Dallas; Jack and Margaret Carter of Fort Worth; and Creekmore Fath and Mark Adams of Austin. The first editor, Ronnie Dugger, was given complete editorial control and declared the Observer to be politically independent. The paper's manifesto, "We will serve no group or party but will hew hard to the truth as we find it and the right as we see it...," was printed on the masthead. Dugger later added "a journal of free voices." The editors after Dugger were Willie Morris (later editor of Harper's), Greg Olds, Kaye Northcott and Mary Tyler [Molly] Ivins (coeditors), Jim Hightower (later Texas commissioner of agriculture), Rod Davis, Joe Holley, Geoffrey Rips, Dave Denison, Lou Dubose, Michael King, Nate Blakesley, and Barbara Belejack. Because of its editorial freedom, literary bent, and liberalism the Observer became a haven for work by some of the state's writers, including William L. Brammer (Dugger's first associate editor), Larry L. King, Elroy Bode, and (in one memorable attack on fellow Texas writers) Larry McMurtry.
Through the years the Observer has covered many scandals and has initiated attention to issues of civil liberties and racial and economic justice. Generally speaking, from the beginning the Observer has been celebrated outside the state much more than in it, as a few of the numerous accolades it has received will illustrate. The Observer stands up "to the powerhouse of money and Texas-style politics as an independent critic," according to the St. Louis Post-Dispatch. Lyndon B. Johnson called the Observer "Without any question the most `liberal' publication in my state." The New Republic characterized the Texas paper as "The conscience of the political community in Texas," and the New York Review of Books called it "That outpost of reason in the Southwest." John Kenneth Galbraith described the Observer as "A well-researched journal which more orthodox Texas statesmen feel should not have the protection of the First Amendment." Except for a large regular ad from the American Income Life Insurance Company of Waco, presided over by Democrat Bernard Rapoport, the paper has carried little advertising. From 1954 to 1967 Mrs. Randolph, who had become the publisher, made up deficits totaling perhaps a quarter of a million dollars. In 1963 Dugger became the publisher and changed the weekly to a biweekly; by 1967 the paper was self-sustaining. After some years, though, rising costs again began causing losses, which came to be made up by contributions from subscribers and beginning in 1989 by the proceeds from benefit banquets. In the first of these, the Observer's newly established Frankie Randolph Social Justice Award was presented to former United States senator Ralph Webster Yarborough. In 1994, Ronnie Dugger transferred ownership of the Observer to the Texas Democracy Foundation, which was established as a 501(c)(3) nonprofit organization to publish and promote the Observer.