Education economics research settles the age-old question of what explains the ‘wealth of nations’: in the long run, it’s smarter countries who become richer countries (not the other way around). Professor Eric Hanushek – the world’s leading education economist – shows that raising a country’s ‘knowledge capital’ is key to its future prosperity, economic growth, and living standards. More than any other factor, the effectiveness of a nation’s teachers is key to raising its knowledge capital, but school systems rarely support effective teaching, due to a lack of market-based policy approaches. What does today’s school system performance imply for the potential rise and fall of nations through the 21st century? How can market-based approaches produce a more efficient and effective Australian education sector?