The "knowledge economy" has become the buzzword of development policy in the early twenty-first century. Nations and regions around the world are all told that they must transform themselves into knowledge economies to survive and prosper. This article uses the example of Wales and its recent embrace of a massive military privatisation project in the name of the knowledge economy to illustrate how political and business elites use knowledge economy discourse to build legitimacy for their own development agendas and interests. The ideological work that knowledge economy discourse performs is based on its claim that knowledge should be seen primarily as a factor of production, along with land, labour and capital; its promotion of the need for networking, teamwork and partnership; its insistence that social and economic advancement be based on talent, education and skill; and most of all, its presumption that knowledge, education and learning are inherently and unquestionably goods in and of themselves.