Postmodernism claims that the universalist themes of modern society (society-wide political ideologies, the nation-state, the theme of rational planning in government policy, the large-scale public or private sector bureaucracy) are obsolete, to be replaced by a plural interest in diversity and choice. These ideas have strong implications for both the theory of social policy, which typically stresses universal themes of inequality and privilege, and the practice of social policy, which relies on rational analysis to inform society-wide government provision. This article suggests that such an approach ignores the significance of market liberalism and the associated trends to inequality, privatisation, retrenchment and the regulation of the poorest groups. From this perspective, postmodernism functions as an ideological smokescreen, preventing us from recognising some of the most important trends in modern social policy. It is unfortunate if, at a time when the results of increasing inequality are everywhere apparent, one of the dominant approaches in social science obscures the issue.