Why does the sociologist think that the critics are not aware of the fact that capitalism predated industrialism by more than two centuries?
Because the original view uses the term "capitalism," and the critics use the term "industrialism." This is a classic LSAT term shift. The two are not the same thing, so logical arguments using them interchangeably them must require one or more assumptions linking their meaning.
There are three points of view presented here:
Some people:
capital punishment for theft = essential discipline for British capitalism
Critics of "some people":
more people executed for theft before industrialization than after (in England)
Author:
these critics overlook the fact that industrialization and capitalism are two different things
Anytime someone says "you have overlooked something," they are criticizing or bringing attention to a weakness (undermining). Thus, the function of this sentence is to weaken/damage/undermine/point out a flaw in the Critics' argument.
With this kind of work done up front, before we examine the choices, (E) is the obvious choice.
(A) no -- it's evidence against the Critics' claim
(B) no -- it's not a direct contradiction
(C) no
(D) no -- it's the opposite
Hope that helps!