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He entered the University of Aberdeen when he was only 14 years old. From 1810-1812 and 1814-1815 he attended Marischal College in Aberdeen (which later became part of the University of Aberdeen) from which he received his M.A. in 1815. According to the "Dictionary of American Biography", young Rae studied medicine at the University of Edinburgh and, though he was afterwards known as Dr. Rae, he did not take his medical degree because he was "discouraged from presenting his inaugural dissertation which embodied a revolutionary view of physiology". Quoting again from the same source, "he had come to the conclusion that the physiological medical theories of the day were opposed to all true philosophy and his theory of the origin of man was very different from the orthodox one".
Following his years at the University of Edinburgh, it is believed that Dr. Rae went to Paris for additional study, and in 1818 he toured Norway. During this period he began to make a study of the history of society "believing by gathering together all that consciousness makes known to us of what is within and all that observation informs us of what lies without---might be---discovered---the materials for a true Natural History of man". However, his study was cut short when an expected inheritance did not materialize and by a "hasty marriage to the daughter of a Scotch shepherd".
In 1821 he emigrated to Canada where he established a private school for the children of fur traders of the Hudson's Bay Company at Williamstown, 50 miles from Montreal. Ten years later he abandoned this project and lived in Quebec, Montreal, and Boston while he worked on a manuscript entitled, "Statement of Some New Principles on the Subject of Political Economy, Exposing the Fallacies of the System of Free Trade, and of Some Other Doctrines Maintained in the 'Wealth of Nations'". His book was published in Boston in 1834 where its reception was lukewarm. A reviewer in the "North American Review" of January, 1835, states that the book "seemed mainly to reiterate received opinion and practice". Soon after its publication, Rae became head-master of the Gore District Grammar School at Hamilton, Ontario, where he was said to have gained the affection and respect of his pupils more through his scholarship and friendliness than through his teaching ability.
In December, 1837, Dr. Rae joined the Hamilton Volunteers and went to Toronto and to the Niagara frontier to fight in the rebellion against the British government in Canada. The following year the trustees of the school ousted him, apparently on the grounds of being a free-thinker or at least being opposed to the privileges of the Church of England.
In 1849 Dr. Rae's wife died.
The doctor went to Boston and then to New York where he taught for a short time. From New York he sailed to the Isthmus of Panama, and from there as a ship's doctor, he sailed on the "Brutus" for California, which was in the midst of the gold rush. Apparently immune to gold fever, he taught school near Sutter's Creek and made cradles for washing gold and balances for weighing it.
Taking passage on the "Waterlily", he arrived in Honolulu March 11, 1851. Dr. Rae settled in Hana, Maui, where he became a medical agent and later a district judge. In the small-pox epidemic of 1853, Dr. Rae in a letter written from Hana and published in the "Polynesian" of September 24, 1853, states that he has encountered small-pox three different times in his career, once when serving his apprenticeship in Scotland and twice while practicing in "Upper Canada" and blames the government for failing to take proper steps to stop the epidemic. Judging from this letter, the doctor seems to have had as much training as many of his professional contemporaries whether or not he ever received his M.D. degree. That his erudition in fields other than medicine was recognized is shown when he was asked to deliver a lecture on Geology before the Royal Hawaiian Agricultural Society meeting in August, 1851, for which the Society treasurer was authorized to pay him $30. In 1861 we find the doctor holding a meeting of some 150 natives of Hana to explain the advantages and benefits of sugar cultivation. During his 20 years on Maui he continued to carry on philological and sociological studies. He was also something of an inventor, designing nautical and aeronautical devises.
Dr. Rae spent the last year of his life on Staten Island, New York, as the guest of a former pupil, Sir Roderick Cameron. He died there on July 14, 1872, at the age of 76.
To the world at large, Dr. Rae is remembered as an Economist. The "Dictionary of American Biography" credits him with working out the time discount theory of interest a half-century in advance of more recent and better-know expositors.
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