Self-study
Perry: Support Worker-owned businesses require workers to spend time on management decision-making and investment strategy, tasks that are not directly productive. █████ ████ ██████████ ████ ████ █████████ █████████ ██ █████ ████ ██ ██████████████ ███████████ ████ ██████████████ ███ ████ ██ ███ ██████████████ ███ ████ ████████ ███ ████ ███ ████████ ██████████ ███████ ███████ ██ ██████ █████ ████ ██████ ███ ████ █████ ██ ████████████ ███████████
Summarize Argument
Perry concludes that risk-averse lenders shouldn’t lend to worker-owned businesses. This is because worker-owned businesses have inefficiencies that can lead to low profits. Specifically, these businesses require workers to spend time on strategic tasks that aren't directly productive, as well as having less division of labor.
Perry is making a cost-benefit argument, but with all costs and no benefits. Since we're specifically concerned with investors' level of risk, we can weaken Perry's argument by providing additional benefits to worker-owned businesses that decrease lenders' risk despite the lower profitability—for example, maybe these businesses are less likely to go under altogether.
Alternatively, we can look for factors that would increase the anticipated profitability of worker-owned businesses, such as low turnover leading to decreased costs in recruitment and training. That would establish that the risk isn't so high despite the factors Perry points out.
12.
Which one of the following, ██ █████ ████ █████████ ███████ ███████ █████████
a
Businesses with the ████ █████████ █████████ ██ █████ █████████ ████ ██ ████ ███ ███████ ███ ██ █████ ████ █████████ ██████████ ██████████
This might look promising, but it's not concrete enough to really affect the argument. For one, this only happens "sometimes," so we don't know whether it's a common or rare occurrence. For another, we don't know to what extent profitability is impacted by failing to make the best use of the most versatile employees—it could make only a tiny difference. So this isn't enough to weaken the argument.
b
Lenders who specialize ██ █████████ █████ ███ ███ ███████ ██████ ██ █████ ███ ████████████ ███████████
Perry's argument about what risk-averse lenders should do is based on premises about the features of worker-owned businesses, not an appeal to lenders' current behavior. How high-risk lenders operate just isn't relevant to the level of risk that's actually associated with lending to different types of businesses.
c
Investor-owned businesses are ████ ██████ ████ ████████████ ██████████ ███ ██ ███████ ████████ ██████
Like (B), this focuses on how lenders currently behave, which is a totally different question from what level of risk worker-owned businesses pose to lenders in reality. We can't just assume that the lower chance of receiving start-up loans is tied to an inherent risk level, and even if we could, that would strengthen rather than weaken Perry's argument.
d
Worker-owned businesses have █████████████ ████████ █████ ████ ███████████ ███████ ████████████ ███████████ ██ ██████████ ██ ████████████ ███████████
Like (B) and (C), information about how worker-owned businesses are usually funded isn't relevant to the risk posed by these businesses without futher information. To weaken the argument, we need to know why risk-averse lenders should actually be interested in worker-owned businesses, and this doesn't help us with that.
e
In most worker-owned ███████████ ███████ ██████████ ███ ██████████████ ██ ███████ ██████ █████ ████ ██ ███████ ██ ██████████████ ███████████
In other words, worker-owed businesses mitigate their inherent inefficiencies through hard work. This adds a benefit to balance out the costs highlighted by Perry, and by neutralizing those costs, undermines the idea that worker-owned businesses are actually less profitable. In turn, that takes away the reason to believe that worker-owned businesses are high-risk, which weakens the conclusion.