Milton Friedman once said that any service that couldn't be made
profitable should be "socialized."  Where did he say that?

This doesn't sound like something that Milton Friedman, the staunch
capitalist, would have said. Are you certain about the author of this?

Yes; the inconsistency is why I remember it.  I think it was from his
work in the 1960s or early 1970s.  He was covering his bases after
insisting the market could solve all problems, recognizing that
meeting some social needs cannot be done profitably. School schildren
cannot support their own schools, prisoners their own jails, poor sick
people their own health care. Contemporary market ideologues don't
accept that insight.