There’s a very interesting observation by Plutarch in the Life of Kimon:
A long time ago in the 5th Century BCE, there was a city-state in Europe called Athens.
Athens and its allies had two wars with a much more powerful and rich empire called the Persian Empire. They won the wars – the first with luck, and the second with cleverness and determination (and lots of help from the Spartans).
After the two wars were over, it was decided that Athens and their allies would maintain the joint army and navy so as to keep the Persians at bay if they showed up again. This alliance was called the Delian League.
However, as the years went on, the allies of Athens continued to pay money as their contribution to the wars against Persia, but refused to furnish men and ships for it and refused to go on military expeditions.
They thought that the Persians were gone for good and they were tired of war. They wanted to cultivate their fields and live in peace.
Athens initially planned to force the allies into furnishing men to fight, but then later decided to take an equivalent amount in money from the people unwilling to serve in person and took their ships without crews.
This allowed the men of the allied cities to stay at home and rest and enjoy their luxury. Over time, these men forgot how to fight and became people who were merely farmers and merchants. They lost all their warlike spirit and skills.
On the other hand, Athens was always engaged in military campaigns and expeditions as they were the ones who supplied men to the army. They were always at sea and accustomed to fighting and living as soldiers.
The result was that in one generation, the allies went from being independent partners in an alliance to simply tributaries and subject peoples of the Athenians.
They could not fight the Athenians so they were no longer equals to them. They were now merely people who had to obey the Athenians and pay money to them.
The Big Lesson: Never outsource the thing that makes you great, independent, and powerful.
In the case of countries, this is both economy and military. You need both to be independent and powerful.
When NATO started, it was an equal alliance. The NATO countries outsourced their military to the USA and depend on them for military protection. Today NATO countries are just vassal states of the USA and can’t really go against the USA’s wishes.
Companies outsource manufacturing to China, but then realize that the Chinese copy their designs (and even improve upon them) and release their own competing products. Sooner or later, they will beat the OGs in innovation as well.
When you outsource, you give up some amount of control to a third party. If the function you outsource is unimportant, you’ll be fine.
If what you are outsourcing is THE thing that makes you great and powerful, or allows the third party to learn or outclass you at the thing that makes you great and powerful – you are making a huge mistake.
The day will come when they will learn how to do it better than you, and they will already know your business and your abilities and often even your customers. You will fall due to your own folly and mistake.
This is the lesson from the Athenian allies who became a subject people because they outsourced the fighting to Athens.
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