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Firehouse: You are applying capitalistic ideals to a non-capitalistic system and trying to understand it that way. It's not a capitalistic system, whether you agree with it or not.
In your example, the goal is simply to allow the best to survive and the others to die off.
NPCs goal is for all to be equal, so there is no best and worst. There is no Yugo and no Porsche. There are only Cadillacs (all high quality, but none head and shoulders above the rest). So, to raise the Yugo to the level of the Cadillac and to bring down the Porsche to the level of the Cadillac is the goal. If all the chapters on a campus are Cadillacs, then you have one very strong Panhellenic system.
Additionally, a weak chapter at one school is the strongest at another. You aren't only joining one chapter, you're joining a national organization, all of whom have their own strengths and weaknesses.
I've never seen a chapter closed for small numbers without extensive attempts by the organization to make it viable. But, if you don't have enough members to pay for your housing, etc., even after those valiant efforts, you simply can't afford to continue there. It's a horribly difficult decision to make for everybody involved and is never done lightly. It's heart wrenching for everybody.
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