However, in the past twenty-five years these old ideas have emerged with a new twist. Shrinking profit rates in certain parts of the world, particularly in Latin America and Africa, gave economists incentives to revive pure economic liberalism. Economists have given the prefix neo or new to the old principles of liberalism thus forming the word neoliberalism. There are several main principles that embody Neoliberalism. First, neoliberal theory relies on the rule of the market to regulate the economy, allowing for a certain openness in trade, both globally and locally.
Neoliberal theory allocates any restriction on basic market principles as a reduction in efficiency.
The idea is that corporations will pay higher wages and regulate themselves in order to attract workers and make a profit. Most importantly however, is the privatization of formerly government owned and operated industry including hospitals, communications, and banks. The idea behind the privatization of industry is to bring in foreign capital and investments in a developing economy to bring stabilization. Market enablement characterizes local economies and their relationship with the central government according to neoliberal policy. Enablement means the use of market solutions.