Civil society is the realm of particular interests — the market economy in which individuals pursue their own welfare, enter into economic relationships, and are bound to each other not by love (as in the family) or political membership (as in the state) but by mutual dependence through exchange. Hegel calls this the "system of needs": my satisfaction of my particular needs requires me to satisfy yours, and this mutual dependence, though not intended by either party, creates a form of interdependence that is the basis of social life.
Unlike the classical economists who treated the market as a self-regulating harmony, Hegel insists that civil society generates irresolvable contradictions. The pursuit of particular interest produces wealth — but it also produces poverty. As accumulation concentrates in fewer hands, a "rabble" (Pöbel) emerges: a class not merely poor but bereft of the sense of self-respect and ethical membership that participation in social life requires. Hegel acknowledges that civil society has no internal mechanism to resolve this contradiction — it requires intervention from the state.
Hegel proposes two corrective institutions within civil society itself: the police (in the broad sense of public administration and welfare regulation) and corporations. Corporations are occupational associations that give particular workers a sense of belonging, dignity, and ethical membership — a second family for those whose primary bond is with their trade or profession. They prefigure the state's universality at the level of civil society, providing the individual with a general identity that transcends mere private interest.
Marx's early writings are in direct dialogue with Hegel's civil society. Marx accepts that civil society is the sphere of real social life — the terrain of production and class — but he inverts the relationship between civil society and the state. For Hegel, the state rationally contains and supersedes civil society; for Marx, the state is determined by civil society and serves as the executive committee of its ruling class. Hegel's civil society is the direct ancestor of Marx's concept of the base.
Hegel's concept of civil society differs importantly from the modern use of the term, which typically refers to voluntary associations, NGOs, and non-governmental organisations. For Hegel, civil society is primarily the economic sphere — what we might call "the market economy and its legal framework" — distinguished from both the family and the state.