Does anyone still read this stuff?
Formalism is dead. Long live Formalism!
That about sums up the state of the theory. That's because, on the one hand, Formalism is Really Dead. It began dying not long after it was born. Once dictator-extraordinaire Joseph Stalin, not to mention Stalinism, rose in the Soviet Union in the late 1920s, the Formalists didn't fare too well. They were accused of being too artsy-fartsy, too detached from the realities of politics and class warfare and good proletarian struggle that were a part of the dominant communist ideology of the time. (Not up to date on your timeline of Soviet history? No time like the present.)
But. Even as Formalism was dying in the USSR, it found new life through its sister theoretical school of Structuralism, which, beginning in the 1940s, would become all the rage in Europe and America. And a number of the early Structuralists (like our buddy Roman Jakobson) started off as Formalists, which is how Formalist ideas found their way out of Russia/the USSR and into Europe and America.
Formalism was also the forerunner to "New Criticism," which is more or less the Euro-American version of Formalism (and yes, here we're sending you to go have a look at the Shmoop learning guide on New Criticism).
Today, Formalism has been eclipsed by newer theories like New Historicism, and even beyond that, Cultural Studies, which are all about understanding the historical context of a literary work (and we know the Formalists would frown on that).
But the fact of the matter is, Formalist ideas are still hugely influential in the way that we study literature. The "close reading" that we do in English class is one example of an approach we've inherited from the Formalists. And concepts like "defamiliarization," and the distinction between "story" and plot"—which the Formalists first developed—are still widely used by literary critics today.
So, long live Formalism!