This paper suggests that a progressively globalised knowledge economy is increasingly distanced from conventional modern sites of knowledge production: nationalised education systems. In particular, the privileging of higher education institutions with regard to high level skills training and research and development may be giving way, minimally, to strategic university/industry partnerships and, more radically, to the ascendancy of transnational corporate in-house knowledge production activity. If this is the case, then nationalised education systems, whether in the vanguard of nationalism or globalism, will tend to operate increasingly at the symbolic and rhetorical level. Historically, the fall of the East European communist states and the likelihood that transnational capitalism in China will eclipse the 'communist'/ 'nationalistic' tendencies of the state in the pursuit of the knowledge economy, may support this argument. This therefore may raise the question as to whether the economic and cultural aspects of reproduction may have to be disaggregated, especially insofar as the latter is closely associated with nationalism. On the one hand, central states, through nationalised education systems, continue to operate conventionally in a global arena of nationalistic, ethnicist tensions and conflict. On the other hand, de-nationalised central states may act as the midwives of the globalised economy, thus realising a late modern version of the rationalist liberal vision of the classical economists.