The Great Divergence is a multi-causal explanation for the economic rise of Western Europe. The book draws upon diverse existing accounts, including those that see the root causes within Europe itself, and those that see the causes as being related to overseas enterprises by the European powers. However, the book goes beyond these existing accounts by offering a synthetic, multi-stage story, showing how each factor mattered at a certain point in time, but was not alone sufficient to trigger the rise of the West. Thus, one comes away with a belief that the story of the West's ascendency cannot satisfactorily be told by Marx's focus on "primitive accumulation" in the New World, nor by North's focus on institutions of property rights in Europe, nor by Braudel's focus on intra-Europe trade and accumulation.
What is the structure of Pomeranz's argument? Again, it sees different factors as mattering at different times. Thus, the argument is causally sequential, going from technology, to war, to colonization, to markets, with supplies of natural resources a constant bonus and an important final step to industrialization (coal). All of these causes are necessary, for Pomeranz, but none are sufficient, explaining why Asia, despite having many of these same variables (some in even more favorable combinations than Europe), was not able to match Europe's rise.
Part 1 begins with the puzzle of "why Europe and not Asia?", going back to pre-1800 times. Against those who would see crucial pre-industrial differences between the two regions, with Europe having some kind of proto-industrial edge, Pomeranz demonstrates with statistical and secondary evidence that Europe possessed no edge over Asia in either life expectancy, fertility, or supply of capital. While he does find a slight technological edge in Europe, as other scholars have posited, he argues that this edge would not have alone been sufficient to cause Europe's rise, without the later use of favorable stocks of natural resources, and overseas conquest and exploitation. Thus, the sequential nature of the argument comes in here, showing how an earlier technological edge, combined with later colonialism and accidents of natural resource endowment (e.g. coal), allowed Europe to escape the Malthusian trap of population growth under constrained resources.
Indeed, Pomeranz demonstrates that the "silverization" of the Chinese economy, coupled with slavery, plantations and precious metals extraction in the New World, were the only factors differentiating markets in Europe from those in Asia - otherwise, the relationship between consumers and goods was relatively similar in both regions. Against Braudel and North, who emphasize economic institutions, Pomeranz shows that nonmarket factors like colonization and wars between European states, coupled with lending institutions that had lower interest rates than in Asia, laid the groundwork for the Industrial Revolution. This groundwork wouldn't have mattered, however, if continued New World settlement didn't ease the growing scarcity of land, since more plentiful labor and capital would have been bottlenecked in the absence of a new land supply.
The focus on nonmarket factors like war is important, because it ties in with later developments that impacted market forms. Because states projected interstate rivalries overseas, according to Pomeranz, organizational forms like joint-stock companies and licensed monopolies arose. This is because armed long-distance trade and export-oriented colonies required "exceptional amounts of capital willing to wait a relatively long time for returns" (20), which could only be provided by these new organizational forms.
However, the book is not a simplistic account that sees colonization as the sole solution, since Pomeranz spends an entire chapter showing how overseas colonies alone could not provide a market impetus for the Industrial Revolution, due mainly to the initially high costs of transport and low demand for manufactured goods in the colonies. Instead, Pomeranz sees the growing use of coal as a key factor in spurring industrialization in Europe, and combining with increasing use of slavery (since slaves produced less subsistence products and thus lived more off imported, manufactured goods) to begin the construction of a world market that traded manufactured goods for raw materials and land-intensive products, while further easing Europe's ecological burden through continued settlement.
The New World had another advantage over Asia. In Asia cash-cropping was through free labor, meaning that exporters and manufacturers were free to shift away from activities with diminishing returns. This efficiency was a double-edged sword, however, since it allowed rising incomes and population growth, which Pomeranz claims diminished Asians' need to both import manufactured goods and to export surplus products. In the case of China, well-functioning regional markets, because of growing population, scarce land, and proto-industrialization, precluded empire-wide markets that could take advantage of more scale and specialization. In the New World, however, production was much more specialized (again, because of slave-based colonies), meaning that larger surpluses of people, raw materials and products were exchanged between the New World and Europe. This dynamic of increasing returns continued even after independence and emancipation, leading eventually (with coal) to the Industrial Revolution.
Again, Pomeranz's argument is about timing as a key factor. Since his Malthusian trap and balance between factors is delicate and fragile, if variables appear at the wrong historical time in this balance, their impact can go awry. An example is the timing of coal and colonization, which, had they appeared later, might have come too late to rescue Europe from Malthusian crisis. Methodologically, Pomeranz acheives much of his arguments about timing through counterfactuals, which generally do a good job of showing how Asia originally had much of the potentiality that Europe did, thus illuminating the large amount of sheer luck that factored into Europe's rise.
Pomeranz's other methodological tool is statistical data. The book has exhaustive appendices with detailed data on soil, timber, grain acreage, etc. Further, the breadth of his historical scholarship is impressive, showing an ability to cite widely from area experts in both Asia and Europe; no mean feat. In short, the high quality of the data, coupled with the reassuring, causally multidimensional sophistication of the argument, make the book a formidable target for any potential criticisms.