According to Marx and Engels, "The history of all hitherto existing society is the history of class struggles" (3). What do they mean by this? According to Marx and Engels what two forces were then engaged in class struggle? What do you think of this assertion?
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The Communist Manifesto begins with Marx's famous generalization that "the history of all hitherto existing society is the history of class struggles" (79). Marx describes these classes in terms of binary oppositions, with one party as oppressor, the other as oppressed. While human societies have traditionally been organized according to complex, multi-membered class hierarchies, the demise of feudalism effected by the French Revolution has brought about a simplification of class antagonism. Rather than many classes fighting amongst themselves (e.g. ancient Rome with its patricians, knights, plebeians, and slaves), society is increasingly splitting into only two classes: Bourgeoisie and Proletariat.
According to Marx, the course of human history takes a very specific form, class struggle. The engine of change in history is class antagonism. Historical epochs are defined by the relationship between different classes at different points in time. It is this model that Marx fleshes out in his account of feudalism's passing in favor of bourgeois capitalism and his prognostication of bourgeois capitalism's passing in favor of proletarian rule. These changes are not the contingent results of random social, economic, and political events; each follows the other in predictable succession. When he wrote The Manifesto, Marx thought he was sounding the death knell for capitalism months before its demise.
It is crucial to note, though, that this antagonism also takes a very specific form, that of the dialectic. According to Marx's dialectical account of history, which he adapts from Hegel, every class is unstable, fated for ultimate destruction due to its internal contradictions. Out of its ashes rises a new class which has resolved the contradictions of its predecessor but retains it own, which will cause its eventual passing. In more specific terms, the bourgeoisie must create the proletariat as a condition of their own development, i.e., in order to labor in their burgeoning industries. In doing this, they must treat the proletariat ever worse (by minimizing their production costs) while providing them the means to associate through politics. The necessary consequence of this is that the proletariat gain power and overthrow their oppressors. The inner contradiction is the bourgeois need for proletariat labor, a need which when met creates the conditions of the bourgeoisie's eradication.
The last part of your question calls for your opinion.