This argument can be greatly simplified. We just need to consider what was happening here.
Some people think execution for theft was essential part of the labor discipline of British capitalism. The critics of this notion argue that because more people sentenced to death before industrialization, that this wouldn't make great sense. Then the final sentence exposes an error in the critics' argument. They conflated capitalism and industrialization. By making clear that capitalism and industrialization are distinct, they attacked the criticism.
And this is answer choice E.
I hope this helps. Please let me know if you have any questions or would like me to elaborate further.