The answer is clearly (B) unpersuasive.
The author defines the sociologist's argument as stemming from capitalism. however, he then argues that "since prejudice against these latter peoples was not inspired by capitalists, he has to reason that such antagonisms were not really based on race." Hence he points out a flaw in the argument.
He then claims the author "disposes thusly (albeit unconvincingly) of both the intolerance faced by Jews before the rise of capitalism and the early twentieth-century discrimination against Oriental people in California, which, inconveniently, was instigated by workers."
Thus, the author is clearly skeptical of the argument, and the reason is that the argument is unpersuasive.