The main explanatory variables used to analyse the transformation of state socialist societies are elite circulation and renewal. It is contended that,while the transformation may be elite-led, transformation should be analyzed as a revolutionary process promoted by, and favouring, class interests. It is hypothesised that the transformation of the post-communist countries has involved a process in which endogenous and exogenous class forces have played amajor role. The absence of (economic) civil society under state socialism gave rise to a deficient ascendant capitalist class. Viewing capitalism as an international system, political elites acting in the international arena, through an alliance with exogenous elites, activated a move to markets and privatisation. In the post-communist period, class inequality and tension have risen. The weakness of civil society is a consequence of an undeveloped incumbent bourgeois class which in turn limits the effectiveness of class rule. The rapid forms of imposed economic and political change, involving the dislocation of the social structure have weakened the formation of an oppositional class consciousness. The inclusion of counter elites into the political system (the ‘elite settlement’) ensuring a form of political management represses ideological opposition and further limits the rise of class consciousness.