The ability of a university to educate students to be responsible and informed citizens in the future has been undercut by the market-inspired, neoliberal attempts to commercialize universities and to turn them into suppliers of proprietary knowledge. The paper focuses on a critique of the ongoing erosion of an important cultural function performed until very recently by the Western universities, which is democratization of social life through development of critical thinking, imagination, and through cultivation of social and humanistic sensibility. We attempt to diagnose the causes of erosion, the consequences of it and to design a possible future social function of a contemporary university as a counterbalancing agency and a testing ground for civic training. The paper opposes a commonly accepted belief that the university should be changed through the corporate market model and presents theoretical research with references to empirical data gathered by other authors.