LSAT Explanation PT 40, S3, Q20: Investment banker: Democracies require free-market capitalist

LSAT Question Stem

Which one of the following is an assumption required by the investment banker's argument? 

Logical Reasoning Question Type

This is a Necessary Assumption question. 

Correct Answer

The correct answer to this question is E. 

LSAT Question Complete Explanation

First, let's analyze the structure of the argument in the passage. The investment banker's argument can be summarized as follows:

1. Premise: Democracies require free-market capitalist economies, because a more controlled economy is incompatible with complete democracy.

2. Premise: History shows that repressive measures against certain capitalistic developments are required during the transition from a totalitarian regime to a democracy.

3. Conclusion: People who bemoan the seemingly anticapitalistic measures certain governments are currently taking are being hasty.

The question type is Necessary Assumption, which means we need to identify the assumption required by the investment banker's argument.

Now, let's discuss each answer choice:

a) No current government has reached as complete a state of democracy as it is possible for a government to reach.

This answer choice is not necessary for the argument to hold. The argument focuses on the transition from a totalitarian regime to a democracy and the need for repressive measures during this transition. The completeness of a state of democracy is not relevant to the argument.

b) The more democratic a country is, the less regulated its economy must be.

This answer choice is also not necessary for the argument. The argument does not depend on the relationship between the degree of democracy and the level of regulation in an economy.

c) The need for economic stability makes the existence of partially democratic governments more probable than the existence of fully democratic governments.

This answer choice is not necessary for the argument, as it introduces the concept of economic stability, which is not directly related to the argument's focus on the transition from a totalitarian regime to a democracy and the need for repressive measures during this transition.

d) A free-market economy is incompatible with a nondemocratic regime.

This answer choice is not necessary for the argument. The argument focuses on the transition from a totalitarian regime to a democracy and the need for repressive measures during this transition, not on the compatibility of a free-market economy with a nondemocratic regime.

e) The nations whose anticapitalistic measures the people in question bemoan had totalitarian regimes in the recent past.

This answer choice is the correct one because it is necessary for the argument to hold. The argument assumes that the seemingly anticapitalistic measures certain governments are taking are part of the transition from a totalitarian regime to a democracy. If the nations in question did not have totalitarian regimes in the recent past, the argument's conclusion that people are being hasty in bemoaning these measures would not be valid.

In conclusion, the correct answer is E. The argument assumes that the nations whose anticapitalistic measures are being bemoaned had totalitarian regimes in the recent past, making this assumption necessary for the argument to be valid.