This paper examines the role played by educational reform (as advocated by economic rationalism) in the economic destruction of Australian society. It is argued that two mechanisms for containing economic difficulties are the plundering of the nation state and the application of new technologies of production. Strategies of educational reform, as advanced by economic rationalists, serve to privatize education (a mechanism of exclusion) and create structural controls through national curricular and evaluative standards. The reorienting of the educational system to secure appropriate skills for the world of work is based on specious grounds. The new managerialism to reduce professional autonomy reduces education to a handmaiden of the economy, appropriates public assets in the service of private interests, and subordinates the democratic interest of the people as a whole to the managerial interests of the few. One area of optimism is that actual implementation practices often modify official policy decisions. In contrast to the aims of economic-rationalist reform, a good school embodies a collegial, professional style of curricular and pedagogical development within a secure school culture supported by community values and resources. In conclusion, economic-rationalist educational reforms constitute, through their denial of the social, a denial of the self. (LMI)