This article argues that services have been under-theorised, in both welfare economics and social policy analysis. Programmes for opening up public services for competition and choice, and for widening the scope for ‘targeted’ services, treat them as analogous to goods. This ignores relational and contextual elements in human well-being, and the potentially crucial role of services in meeting such needs. The author calls for co-operation between economists and social policy analysts in filling this gap in welfare theory.