The American social welfare institution is in transition. Constituencies of the welfare state-the public, clients, and professionals-have registered dissatisfaction with traditional methods of providing services. Analysts from liberal and conservative think tanks have proposed relying less on government and more on the private sector to provide for welfare. To a substantial degree privatization is already evident in several areas: the expansion of for-profit health and welfare corporations, the application of entrepreneurial methods in community development, and the encouragement of private retirement plans. The liberal response to privatization is poorly developed, and could benefit from insights by welfare professionals who seek to make privatization consistent with a progressive welfare agenda.