The Great Divergence

In his economic history, The Great Divergence, American professor Kenneth Pomeranz looks at the Industrial Revolution and its legacy through a new framework, alleging that Europe was special in its ability to harness the social and intellectual energies of rapid innovation to quickly outpace the rest of the world. Pomeranz utilizes a myriad of sources, from monographs to quantitative economic analyses of Europe and China, to illustrate how the regions diverged, never to reflect each other again, around the start of the nineteenth century. Pomeranz hones in on England and Jiangnan, a lower province of China, as examples of this historical phenomenon, which stretched for two centuries. He also criticizes the notion that the divergence was inevitable, showing how Asia was just as wealthy and powerful except for in a handful of critical dimensions. The book is best known for coining the term “Great Divergence,” which is now used ubiquitously to describe the two continents’ different trajectories in the wake of the Industrial Revolution.

Pomeranz begins with the claim that before the Industrial Revolution, Europe and Asia (at the time, the only continents containing “developed” states) were essentially alike from a technological and economic perspective. They had a similar rate of market growth, standard of living, farm productivity, and efficacy of their social institutions and economic regulating bodies. Pomeranz contends that the Great Divergence happened around 1800, seeing England jump light years ahead of the rest of the developing world.

Pomeranz credits two main factors for the Great Divergence. The first was England’s prevalence of coal reserves, which it had stockpiled just before an unexpected shortage. Coal miners lacked the technology to understand just how vast their coal supply was, so this factor was largely luck. The second factor was England’s proximity to the Americas and Africa, continents it would exploit, often criminally, for hundreds of years. Asia, stranded on the other side of the world, had no such newly discovered continents to tap into. Pomeranz suggests that had Asia been closer to the Americas than Europe, the fates of these continents would have been inverted.



Next, Pomeranz breaks Europe around 1800 into five components, which, he argues, demonstrate its uniqueness: demography, markets, consumption of luxury goods, labor, and ecology. For each component, he outlines how its uniqueness was either revolutionary or just anomalous. Research into Europe’s demographics, for example, indicates that individuals married late (often, not at all), which helped keep the population low even though birth control was not an option. Asia, in contrast, had universalized marriage and child-rearing, but with high rates of fertility control. As a result, Asians’ life expectancies were higher than Europeans. The net effect was that both continents enjoyed a similar standard of living.

Pomeranz also argues that Asia was composed of less regulated economies than Europe, giving it, at first, an upper hand. Land and property changed hands constantly, and intra-continent migration was common. As a result, the country evolved efficient ways of allocating resources. Europe, on the other hand, lagged behind in these market efficiencies. Pomeranz debunks historians’ frequent claims that Europeans enjoyed higher wages or standards of living.

Pomeranz criticizes other misconceptions that suggest Europe had an upper hand, making the Great Divergence inevitable. European tycoons, for example, are often cast as the wealthiest people in the world during the rise of industry. Pomeranz, however, shows that when assets and conversion rates are represented honestly, Chinese tycoons were richer than Europe’s richest. Finally, he returns to his thesis: that only a couple of critical factors actually led to Europe’s prevailing over Asia. Contending that the totality of Eurasia was facing a coal crisis by 1800, he reiterates that it was only by luck that Europe survived, mostly due to its stockpile of the fossil fuel. Both continents had severely depleted their other productive resources, including arable land and forests.



The Great Divergence shows that popular and linear accounts of history, depicting the world as if it were constantly progressing towards social, political, and economic ideals, are mostly a dream. Rather, the future of any human group is always uncertain and at the mercy of some conditions that can only be identified and understood in hindsight.