Wanting to increase revenue from non-tuition sources is, obviously, not shareful. It is the dog eat dog competition that bothers me. Non-profits are all, by law, supposed to sever the public good. That ought to mean you can't but non-profit competitors out of business just to marginally increase your position. And that's before you even get to the antitrust issues.
I'll give you an example. I forget where you teach, but let's say it's Buffalo. Would you really want Ohio State University to be able to say "we could make more money if we took over the market in western NY, so let's come in, open a branch of TOSU and then price tuition at a loss until we drive UB out of business. That's not right when a private business does it but you aren't more offensive when one organization that takes government money uses it to attack another organiztion that takes government money? Taxpayer interest shouldn't enter into what public institutions do?
I'm not accusing you of this, but I laugh when people say "I want government out of college football." Dude -- college football is 99% run by the government today. It's just run by various arms of various state governments.
All I'm saying is that the main mission is academics, and for the schools playing these cut-throat games, the academic mission is helped. The others should consider getting out of this wacky game altogether (something I believe would be wise for many schools). But, to answer your question more directly, universities do compete, locally and regionally, and they do put programs and schools out of business. The state will look at one school and say, Look, the school down the road also has a _______ department, we're not going to fund two of them. Close down your department/school. Or, as recently happened in my region, U. Buffalo's Law School suffered a 8 figure cut in one year. Meanwhile, the state funded a new law school for St. John's Fischer College, a private school, in Rochester. So, this already happens. Schools compete for limited resources.
There's a backstory to Nebraska getting kicked out the AAU. The AAU right now is not only not taking applications, but they are actively in the process of whacking a bunch of other schools. Those that perceive the AAU as some kind of prestigious organization must be scratching their heads and thinking, "Wow, those schools being dropped must have fallen in terms of academic rigor." The truth is, the AAU has always been a lobbying organization that doles out money to congressman who then go on to fund the national institutes and military research grants. The AAU schools have historically taken 50% of all awarded grants. So, what happens when the Federal Gov't cuts back on research (as it has) by 25%? The AAU suddenly gets the idea to start tossing schools from the ranks. Because of decreasing academic rigor? No. Because the money pie is being grabbed by a smaller subset of schools. The same thing going on in sports is going on in academics.
Personally, I think the AAU is a joke, and lobbying is an illness. But I wonder sometimes, given the people in office, how much we'd devote to research grants without lobbying.
