Why did the famous theory of absolute and comparative advantages not work when the GATT and the WTO were created? In the world of internationalization and globalization, which worships money and encourages ever-growing trade, it is very difficult to find a model and further implement it into the modern system in a way that is efficient, environmentally friendly and yet economically sustainable for all participants. Most of the suggested models are in my opinion obsolete and do not respond to current global trends and challenges. And surely the trading system we currently have cannot claim to be free. In the context of globalization, all national economies are integrated into a single global economy and must obey the laws established by a global economic institution, currently the World Trade Organization (WTO). Free markets only work as long as they allow people to act on their own knowledge, without the need for a central authority. While free and unregulated markets only work with pure market assets (which don't actually exist), the basic idea of ​​relying on decentralized information is believed to be a good one. Adam Smith in the eighteenth century suggested that if the country can produce the good in question at a lower absolute cost or with higher productivity than its trading partner, it has an absolute advantage. David Ricardo went on to assume that if he can produce the good in question at a lower price than other goods he produces than his trading partners, regardless of absolute costs, he has a comparative advantage. The theory of absolute advantage states that a nation benefits from producing more output than others because it is in possession of a particular resource or commodity. This particular resource may also be a certain method or knowledge that increases...... mid article ......tion of the works and correspondence of Adam Smith, edited by RH Campbell and AS Skinner, 1981, Liberty Press .2. Irwin, Douglas A. 1996. Against the Tide: An Intellectual History of Free Trade.3. Princeton: Princeton University Press. A great overview of the arguments for and against free trade throughout history.4. P. A. Samuelson (1969), "The Way of an Economist", in P. A. Samuelson, ed., International Economic Relations: Proceedings of the Third Congress of the International Economic Association, Macmillan: London, pp. 1-11.5. www.internationalecon.com/Trade: Steven M.Suranovic, International Trade Theory and Politics - Chapter 40-4: Last updated 7/18/066. www.americaneconomicalert.org: Ian Fletcher, Fatal Flaws in the Theory of Comparative Advantage: last updated 06/11/087. www.bigpicture.tv/videos: Lori Wallach – Free Trade – The Price Paid