Q12 - Perry: Worker-owned businesses

[bbirdwell]

Sure!

Since it's a weaken problem, we'll first need to analyze the CORE.

It's a lengthy argument, with an intermediate conclusion and a main conclusion.

Premises:
1. worker-owned biz = must spend time on mngmnt and investment strategy (tasks not directly productive)
2. worker-owned biz = less division of labor

Intermediate conclusion:
these CAN lead to low profitability and increased risk

The main conclusion is the last sentence:
lenders who want to reduce risk --> no loans to worker-owned biz

In evaluating the logic and considering potential gaps, we'll want to look both at the connection between the two conclusions (one supports the other), and the connection between the facts and the intermediate conclusion itself.

Considering the main conclusion... I can only see one real gap -- it's a pretty good argument, that to reduce risk, one should avoid X, when X = increased risk.

However -- X, in this case "worker-owned biz" does not necessarily = increased risk. The word CAN really sticks out. Just because something CAN increase risk, doesn't mean that it does.

So now we might look back a little further to see what that "CAN" is based on. Essentially, because worker-owned biz's have certain characteristics, they CAN increase risk.

Can you see how this is a pseudo-causal argument? The question should immediately arise: "Well what about the advantages of worker-owned biz? Perhaps the advantages more than compensate for the increased risk of the characteristics mentioned!"

In other words, it's a classic case of "What if there's something we haven't considered?"

When looking at the choices, we should remember this, as well as our task: to make the conclusion less valid.

(A) Making use of potential is WAY out of scope.

(B) so what?

(C) so what?

(D) so what? Should lenders give them money or not?

(E) ah-ha! So, sure, the inefficiencies mentioned CAN lead to higher risk... BUT, most of the time, they compensate for those inefficiencies. Therefore, maybe they're not such a bad investment after all.


#officialexplanation

[jon7ng]

Can someone help me analyze these answer choices?

[Mab6q]

Thought I'd throw my explanation here just for the heck of it.

This is a weakening question. Our first task it to find the conclusion and support, then we will try to understand why the author believes the support by itself justifies the conclusion. Next, we will seek to understand the flaw in the reasoning the author uses—make no mistake it will be flawed. Lastly, we will use the information we have to eliminate the wrong answer choices and confirm the correct answer choice with the information from the stimulus.

Conclusion: lenders seeking to reduce their risk should not make loans to worker owned businesses.

WHY: Well, such businesses have certain factors that can lead to inefficiencies—workers are spending time on management decisions and they do not have extensive divisions of labor.

Reasoning: the author seeks to support his conclusion from the fact that such businesses have certain qualities that may lead to inefficiencies.

Flaw: The problem here is that we don’t know that the likelihood of having such inefficiencies is sufficient enough to call for lenders to not invest. It could be that even with such inefficiencies, they are still a good choice compared to other options. To strengthen this, we could say that other companies that don’t have such issues are much more efficient and are a better option for investing. To weaken, we could show that although they can be inefficient, they are a good choice nonetheless compared to the competition.

A, this might seem tempting, but it’s ultimately a weak answer choice. First, knowing that they sometimes fail is not enough here. Second, it tells us nothing about the worker-owned businesses. This question focuses too much on a single premise and not the reasoning in the argument.

B, irrelevant background information.
C, again, this has no impact on our conclusion, which is about what lenders should do. Knowing what they do now doesn’t help us.

D, this tells us that such worker-owned businesses typically receive loans from other worker-owned business. Another answer choice that gives us irrelevant background information.

E, this is our answer. It weakens the reasoning because it shows that they aren’t necessary less efficient because they make up for it by working longer hours. This would weaken the relationship between the premise and the conclusion.

[ganbayou]

I was not sure between B and E.
For B, I thought since they "specialize in high-risk loans are the largest source of loans for worker-owned business," they do not worry about risk and since it's their specialization, they can keep making loans to worker-owned business...and this contradicts the conclusion.
But is it wrong because the conclusion specifically says "lenders seeking to reduce their risk" and those lenders in B do not apply to this category?

Thank you

[ohthatpatrick]

There's a really important lesson for you to learn about your thinking on LR from your two sentences here:

For B, I thought since they "specialize in high-risk loans are the largest source of loans for worker-owned business," they do not worry about risk and since it's their specialization, they can keep making loans to worker-owned business...and this contradicts the conclusion.

But is it wrong because the conclusion specifically says "lenders seeking to reduce their risk" and those lenders in B do not apply to this category?


Your 2nd thought is exactly right. The conclusion makes a claim about one specific group of people, low-risk lenders. So the truth value of that claim is unaffected by any information about high-risk lenders.

On Assumption Family classes, If you really sharpen your focus on the conclusion, you'll find that so many answer choices cannot affect the truth/falsity of the conclusion (if there were a trial to determine whether the conclusion was true or not, these other answers would be ruled out as inadmissible evidence by the opposing attorney).

I approach these answers with one question in mind: how can I argue the "Anti-Conclusion"?

So I would just think, "Why should low-risk lenders make loans to worker-owned businesses?"

(E): because, worker owned businesses make up for their disadvantages with the advantage of more hours.