Answer: D) Adam Smith argued for a laissez-faire economy that is free of government intervention.
Step-by-step explanation:
Adam Smith believed in the possibility of the market to regulate itself through "an invisible hand". He believed that it wasn't necessary for the state to intervene (too much) in the economy, as the market would develop its own set of internal rules, which would do justice to economic agents.
However, Adam Smith's theory was based on the assumption that economic agents were rational agents, who would choose the best course of action, the option which best reflected their interests. In reality, economic agents often are irrational and they don't make the best choices for themselves, something which disturbs the internal order of the market. There also are free riders everywhere.
Adam Smith was far from being a communist, he believed in freedom and he hated the idea of history and tradition as determinants of manufacturing. He was in favor of competition as incentive for innovation, but his laissez-faire theory had its flaws.