In this way, the amount of currency in circulation would automatically expand or contract with business, in contrast to the then existing system where notes were issued based on the procurement of government bonds.

This real bills theory was in line with the aversion to centralized banking of the era, and is considered to be naive from a modern view.

In addition to teaching, he edited the Journal of Political Economy from 1892 to 1933, but refused to become a member of the American Economic Association because of differences in philosophy.

He advised various state and national governments on economic matters, including overhauling the monetary system of Santo Domingo.

He prepared an abridgment of John Stuart Mill's Political Economy (1884) and wrote many important books on macroeconomics and monetary policy.

"[7] Friedman summarized: Much of it, notably his History of Bimetallism in the United States (1885), consisted of a thorough and extremely careful presentation of historical evidence on the development of money and monetary institutions.

Then, as now, such theories ran against the major stream of monetary analysis as exemplified in Laughlin's time by the work of Irving Fisher.