Most recent analysis of the rise of knowledge-based capitalism has obscured the critical role played by the welfare state and the system of gender relations associated with Fordism. Similarly, research into the various forms and functions of the welfare state has suffered from an essentially static and taxonomic approach, which ignores the changing dynamics of capitalism as well as the importance of gender. This article shows how the development of the welfare state and the system of gender relations affected the transition from Fordist industrial capitalism to "cognitive" capitalism. The transition to cognitive capitalism has been, however, a complex and contradictory process that could lead in opposing directions in the future.