Investment banker: Democracies require free–market capitalist economies, because a more controlled economy is inco...

shunhe on January 5, 2021

Hi @andreaskormusis,

Thanks for the question! So let’s first summarize what this investment banker is telling us. We’re told that democracies need free-market capitalist economies. But sometimes, when you go from a totalitarian regime to a democracy, you need to do some anti-capitalistic things to get there. One step back, two steps forward type of thing. The conclusion is then that people who complain about some anti-capitalistic things that some governments are doing are being too hasty.

So what’s being assumed here by the argument? Well, one thing immediately comes to mind: that these governments are transitioning from totalitarian regimes to democracies! If that’s true, then they have to do some anti-capitalistic things as discussed to get to true capitalism, and so then the people shouldn’t bemoan them. That’s what’s stated in (E), making it the correct answer.

Hope this helps! Feel free to ask any other questions that you might have.