The "knowledge economy" has been received with considerable scepticism by scholars within the fields of political economy, social and political philosophy, and higher education. Key arguments within this literature are reviewed in this article to suggest that, despite policy claims, "knowledge economy" does not describe a "new" mode of economic production, but a discursive recasting of the relations between ideas and the economy. The article argues that knowledge economy policy discourse undermines older understandings of the role of universities within a democracy, and fails to recognise and support the distinctive and diverse nature of university knowledge innovations. The dangers of allowing economic logic to supersede educational concerns are exemplified with reference to Australian research degrees. Here the focus upon "generic" training to produce "knowledge workers" manifests in an approach that does little to support doctoral students and their supervisors in the actual work of research.