Privatization refers to all situations where control is passed to the private sector. Since World War II, the state has socialized most capital costs associated with the great expansion in human services, while the private sector has developed peripheral services to augment the growing welfare system. As the Ontario Government's expenditures outstripped its revenues in the 1970's, it began contracting with private agencies as a more efficient and cost-effective method of service delivery. In an era of limited budgets, the state will probably increase its reliance on private sources and consequently find it necessary to increase controls over the burgeoning private sector. Repression, exploitation, co-optation, integration, paternalism, and conformity are common forms of control. Based on the assumption that the state will say and do anything to preserve its existence, community corrections can be viewed as the State's attempt to expand its jurisdiction over more people in a period of fiscal constraint. This situation is evident in the massive increases in community sentences such a probation and service orders although incarceration rates have stabilized. This trend may destroy the private sector, since small agencies will offer only services defined and required by the state and cheaper community programs will proliferate. The private sector must view the state as welfare capitalism, and mobilize its efforts to thwart government policies. The paper contains nine footnotes.