Chapter 6 traces the meaning of ‘modernisation’ in Labour’s economic policies. ‘Modernising the economy’ to achieve sustainable growth was a consistently crucial idea for Labour from Wilson to Blair. Notwithstanding the abandonment of nationalisation, the endurance of state-led ‘modernisation’ in Labour’s economic imaginary reveals a continuing strategic role for the state, even for New Labour. After establishing this continuity, the chapter highlights a crucial change. In the 1970s and 1980s, Labour policymakers assumed that manufacturing was the key sector to ‘modernise’. Yet, under the influence of deindustrialisation, ideas of ‘post-Fordism’, and New Keynesianism, by the early 2000s manufacturing had been usurped by ‘human capital’. For New Labour, education and training became the new ‘commanding heights’ and the foremost economic priority for the active state. These developments show the ongoing influence of technocratic, social-democratic thought worlds, and thus expose the inappropriateness of shoehorning New Labour into ‘Thatcherism’ and ‘neoliberalism’. But they also speak to important, and ambivalent, shifts in British political economy by the twenty-first century.