Why did the famous theory of absolute and comparative advantages not work during the creation of the GATT and the WTO? In a world of internationalization and globalization, which worships money and encourages ever-expanding trade, it is very difficult to find a model and implement it in the modern system in such a way that it is efficient, respectful of environmentally friendly and yet economically viable for all participants. Most of the proposed models are in my opinion outdated and do not respond to current global trends and challenges. And the current trading system certainly cannot claim to be free. Under globalization, all national economies are integrated into a 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 individuals to act on their own knowledge, without the need for a central authority. While unregulated free markets only work with pure market goods (which don't actually exist), the basic idea of ​​relying on decentralized information is considered a good idea. Adam Smith, in the 18th 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 it can produce the good in question more cheaply than other goods it produces than its trading partners, regardless of absolute costs, it has a comparative advantage. The theory of absolute advantage states that a nation benefits from manufacturing. more production than the others since it has a particular resource or product. This particular resource may also be a certain method or knowledge that increases...... middle of 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 Grain: An Intellectual History of Free Trade.3. Princeton: Princeton University Press. A wonderful overview of the arguments for and against free trade throughout history.4. PA Samuelson (1969), “The Way of an Economist”, in PA 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, Theory and policy of international trade - Chapter 40-4: Last updated 07/18/066. www.americannomicalert.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