Economists trace the establishment of 'intertemporal choice'—decision-making that involves trade-offs between costs and benefits occurring at different times—as a distinct disciplinary topic to 1834, when the classic text The Sociological Theory by the Scottish economist John Rae was published.

Rae’s subject was the 'effective desire of accumulation', a psychological factor that helped explain why wealth differed across societies. His investigation into the psychology of intertemporal choice deeply influenced his contemporary John Stuart Mill before being rediscovered by economists formulating theories of capital at the turn of the 20th century, including Eugen von Böhm-Bawerk, who added a chapter on Rae to his 1900 edition of The Positive Theory of Capital. This renewed interest prompted the re-issuance of Rae’s book in 1905, extending his influence deep into the new century. In 1930, the prominent neoclassical economist Irving Fisher dedicated his The Theory of Interest to Rae’s memory. Today, Rae’s approach continues to inform 21st-century theories of time discounting.

Rae structured his book as a critical response to Adam Smith’s 1776 work The Wealth of Nations, yet he agreed with Smith’s desire to dispel the moral anxieties triggered by the liberal political economy’s exhortation to pursue self-interest, advocating for self-regulation to insure against bad outcomes. He asserted that, under the right conditions, a preoccupation with 'personal interest' would encourage people to overcome a general aversion to delaying gratification and walk 'the paths of prudent care and frugality'. In short, we can be subject to self-restraint in the present in order to benefit in the future.

The necessary setup for this path was a society that created a desire for 'the increase of family' and to occupy 'a high place in the estimation of the world'. In the same way, 'envy of the superiority of other men' was an important stimulus, though it was curtailed by the 'honesty and gentleness of the happiness of others'.

Smith and other Enlightenment philosophers had already encouraged the study of great historical figures as a key to cultivating moral sentiments. Such study would encourage people to act with the prospective judgment of history on their own actions in mind—as George Washington very famously reminds Alexander Hamilton in Lin-Manuel Miranda’s musical, to live as if 'history is watching you'. Thus, Rae himself was driven by an ambition 'to be a lasting benefactor of mankind'.

Theoretically, everyone could learn to act in this way if given the right incentives. Rae argued that the tendency toward self-restraint was lower in the East Indies and West Indies, where 'the expenditures of the inhabitants are great', but he believed that '[the] same people, coming to live in the healthy parts of Europe', would 'live economically'. They were wasteful only because '[war] and pestilence have ever been the attendant and foster-parents of waste and luxury, and the other evils that follow in their train,' he explained, overlooking the role of colonialism in creating those misfortunes. Rae was convinced that increasing security through law and order—which empire promised to do—would improve the prospects of these regions (though, in reality, imperialism drained wealth and created disorder).

Indeed, one of the ways Rae claimed to disagree with Smith was his explicit belief in empire as a benevolent force. Rae wrote in the 1830s, during the boom in the belief that British imperialism in the East Indies would produce Indians 'English in taste, in opinions, in morals and in intellect', as noted by historian and imperial policymaker Thomas Macaulay. The liberal project, however universal its aims, was dependent on racist comparisons that suggested the default human was a white man.

Rae himself was a so-called 'defender of the British Empire', emigrating to British Canada in 1822 after his father’s bankruptcy—an event that likely deepened his interest in the quality of foresight in an era when the British viewed bankruptcy as the result of a moral failure. Of course, the loss of his expected inheritance prevented him from pursuing the academic path he had intended while he was a medical student in Edinburgh. Extensive travels through Canada shaped the writing of his classic text, which he published in Boston while visiting the city in 1834. He took up arms to defend the British Empire during the 1837 Canadian rebellion, but moved to the U.S. after losing his teaching job in 1848. He joined the stream of migrants to California via Panama in 1849, before heading to the Hawaiian Islands in 1851. Sadly, financial stability persistently eluded the theorist of accumulation. He worked variously as a physician and geologist while trying to compile a 'history of mankind' by studying the origins of the Polynesian 'race', as he confided to Mill in the 1860s (in a letter he may not have sent).

This North American experience and preoccupation with racism critically shaped his analysis. From the very first pages, he frequently referred to what he perceived as the Native Americans' disregard for the future as a counterpoint illustrating the importance of proper conditions—a disregard that Rae attributed to collective values and relationships with land, animals and water resources. He wrote: the 'Indian' thinks that 'little restraint upon the pleasures [the course of events] may offer him ... and indulges ... without restraint, in the pleasures of the hour.' He praised the Jesuits for turning the Paraguayans into 'docile pupils' in the European art of self-control, keeping them 'from barbarism and idolatry'—at least under strict supervision, given their constant 'defects of recklessness, indolence, and want'.

Rae’s thoughts on the future were predicated on what he believed distinguished humans from 'the lower animals, and the degree to which he possesses it marks his place in the scale of civilization.'

The racial barriers embedded in his supposedly universalist theory are plain to see, as he insists that 'our own barbarous ancestors' in Europe were no good comparison to the 'savage aborigines of North America', because even as 'pastoral warriors' in the Roman era, their consumption habits were governed by a sense of 'foresight'. Therefore, the 'European race' naturally had 'a much higher effective desire of accumulation' than others. He also viewed Asians through a damning Orientalist lens: despotic tendencies, he argued, prevented Chinese society from rising above the pull of 'sensual gratification and selfish feelings' (though their effective desire to accumulate means was said to be greater than that of 'other Asians')...