A university is this. You don't have to agree with every aspect of the Wikipedia entry, but it's a solid starting point. A university is an institution of higher education. Universities have professors and students. Research happens at universities because research is part of higher education. That is, research is something fundamental to the process of educating students at universities.
This is not a university. The Max Planck Institutes undoubtedly educate people, but only as a residual function of their primary purpose: to conduct research.
If you've spent time at a major research university, however, you can certainly be pardoned for thinking that there really isn't much of a meaningful difference between a university as you know it and an independent research institution like those of the Max Planck Society. Particularly if you're used to UK and European institutions of higher education--which are almost exclusively research universities--and have never set foot on a liberal arts campus, where the primary aim of the institution is to teach undergraduates--this idea that a university is not primarily a research institution might seem disconcertingly foreign to you.
In fact, in places like the UK, and with few exceptions, academics, higher education administrators, and politicians are all essentially lying to themselves and others by continuing to think of the UK's leading universities as, well, universities. It's no secret that, but for resource-intensive undergraduate curricula at places like Oxford and Cambridge, teaching is really an afterthought at UK universities. And at the end of the day, when government cuts have to be made, the loudest voices in UK higher education are those who head the top research universities and fear that taking away elite-research money and giving it to more teaching-centered post-92 universities will be the end of UK higher education as we know it. The idea of the university as a research institution first (and a teaching institution second, if at all) rules the day in the UK, and has done so for a while now.
The implications of this attitude that universities are primarily for research are startling, especially at a time when budget cuts mean universities have to be even more explicit about what they aim to do and how they aim to do it. What many in UK higher education are proposing, perhaps unwittingly, is the end of the university. In other words, if the most compelling argument for higher education funding is that such funding will produce top-flight, globally competitive research products, everything non-research about the university, plus every university research pursuit (e.g. in the humanities) whose main purpose is to bolster teaching efforts, rather than to stand alone as a marketable research product in itself, will falter. Effectively, what higher education leaders and politicians are currently asking for is funding to become independent research institutes like the Max Planck. That they're using the longstanding legitimacy and social cache of the idea of the university--a place of learning, hence a place of teaching--as a cover for abolishing that very thing, however, is nothing short of appalling to old curmudgeons like PMB.
Many independent research institutions and research-producing corporations do very well, both by themselves and by the broader societies for whom they produce research. But the end of the university is not just the end of our primary means of higher-level teaching and instruction, in both vocational and non-vocational terms, for centuries; it's also the end of the professional study and teaching of whole fields of inquiry and bodies of knowledge. Many fields, like literature, philosophy, classics, religion, history, anthropology, law, etc., don't produce--and don't aim to produce--standalone research products with direct or immediate social impact. A peer-reviewed journal article on a novel about Middle-Eastern trade, read by a small handful of other scholars interested in the given field, will not have much, if any, societal impact. The same article, read by another scholar, taught to a classroom of students, and internalized by a couple of them who later go off into policy work on the Middle East may confer a real benefit, the deep understanding of that particular history (to give a convoluted example, as they always are). By contrast, if a chemical engineer develops a way of making better televisions, however trivial the benefit of having a marginally better television may be, it's nonetheless a direct benefit--a standalone research product that makes an immediate impact. If the playing field is tilted in favor of research or the standalone research product as the primary aim of the university, both teaching and the types of research that principally aid teaching will fall by the wayside. The university as a place of learning and instruction, a place with professors and students, will become instead an independent research institution that students will no longer pay to attend, serving only a research elite for very narrow purposes.
Addendum: Almost every day PMB engages in discussions about the relative values of various fields of research. While most are carrying on about how their brilliant research aims to cure cancer or AIDS or Malaria, or produces 'crucial' medical technologies, or even produces better televisions, the idea that the central benefit of some research is actually teaching and educating young students, and preparing them for a range of careers and experiences, simply never registers. At an independent research institute, this wouldn't be a problem. At a so-called university, it's an abomination.
