economy therefore this section will weigh up whether the UK’s security policy will be enhanced by increasing or decreasing milex. According to SIPRI the UK’s government spent 4.7% of spending in 2017 on milex compared to USA government which spent 8.8%. Overall this equated to 1.8% share of GDP.

The various economic schools of thought have contrasting views on milex. Keynesian economics would argue the UK should increase its milex to boost the economy which entail will enhance security policy. Government spending on milex will stimulate spending in the economy resulting in a multiplier effect. This will lead to a direct benefit on the UK economy as increased output leads to increased profits, investment and growth. Arguably, this approach is particularly important as it avoids the issue of insufficient demand in the economy associated with a recession. Despite, experiencing growth for the UK this is very limited therefore the ability to affect demand is significant for the economy.

Similarly, the neoclassical approach would argue the UK should increase its military expenditure. Neoclassicalism claim milex is providing a public good which is both non-excludable and non-rivalrous. As a result, determining the optimal defence output is an optimisation problem where the socially desirable outcome occurs where marginal cost is equal to marginal benefit. The neoclassical approach sees the government as a rational actor which weighs up the opportunity cost and security benefits of milex. However, both approaches have experienced criticisms. The neoclassical approach is criticised for concentrating on the supply side so ignoring the internal role of the military whilst Keynesian is criticised for failing to consider supply side issues.

Furthermore, the UK should increase milex due to the positives effect on the microeconomy. Modernisation theory would argue increasing milex has many benefits on the quality of factors of production and firm characteristics. For example, the military sector offers training and education for labour as well as investment in capital. However, for the UK – a economically developed country – these benefits would be limited. As the UK’s factors of production are already developed the additional effects of increasing milex in terms of the modernisation theory for the UK would be minimal.