The paper discusses Marx’s view on the relationship between technological change and institutional change as presented in the famous preface to A Contribution to the Critique of Political Economy. What Marx meant by a contradiction between the base and the superstructure is explained. Marx used this framework to explore the evolution of technology and institutions in English agriculture and manufacturing from the middle ages to the industrial revolution. The paper reviews recent research in these areas and concludes that much of what happened can be described with Marx’s vocabulary. However, it is also argued that the discussion was incomplete as Marx left it, since he did not have much to say about the origins of new technology. The paper argues that induced innovation provides a useful point of departure. This approach is also useful, for it ties in with another great Marxist them–the immiseration of workers during the Industrial Revolution. The paper claims that the average real wage of manual workers did not keep pace with the rise in output per worker during the first half of the nineteenth century, and that many workers experienced falls in income as machine production destroyed handicraft manufacturing. It was the great expansion of the handicraft manufacturing sector in the seventeenth and eighteenth century that led to the high wages that promoted the invention of machinery during the industrial revolution, and average wages did not rise until that sector was liquidated. Since it was so large, destruction took a long time, which is why the ‘standard of living’ question is such a prominent feature of the British industrial revolution.