By embracing education as an economic development tool, policy makers adopt a new economic metaphor--a new way of understanding how the economy works and identifying determinants of development. Development policy has shifted focus, from providing incentives for the accumulation of physical capital to emphasizing investments in human capital. Most states espouse the belief that education is their most important economic development tool. It is important to trace how this mixing of metaphors has come about and what it has meant for economic development strategies. Education has displaced industrial policy and evolved into one of the most powerful metaphors of economic development, and the five substantive chapters of this paper analyze this process. Chapter 2 examines how metaphors are used as the basis of national economic policies; chapter 3 describes development policies derived from traditional mercantile metaphors; chapter 4 describes how many states have reformulated their development metaphors over the past decade to play a much larger role; and the final chapter outlines how state development policies change to reflect these new metaphors--by means of measures to improve the basic and occupational skill of the work force, measures to promote greater entrepreneurial awareness and abilities, and measures to equip disadvantaged people to compete better in the mainstream economy. (110 reference notes) (NLA)