The free market human capital discourse and its associated material practices now play a significant role in education. This discourse assumes that education is an economic site in which individuals invest in the acquisition of qualifications in order to maximize their future earning power. It demands the full privatization and deregulation of education. The development of the discourse is analyzed as follows: from 17th century scientific and liberal conceptions of the individual, society, freedom, and market equity; through Adam Smith's human capital doctrine and the second development of human capital ideas by Keynesian and neoclassical economists; to the free market human capital arguments of Milton Friedman and his successors. The policy claims of Friedman's Australian followers are examined, and the paper closes with consideration of the implications of free market practices. Appended are 44 references. (Author/LMS)