Last Sunday I visited the beautiful deco-era Astor Cinema to see a Studio Ghibli double, My Neighbor Totoro and Porco Rosso. For those of a political mind, the latter is a very interesting historical fantasy. Set during the Great Depression it follows the adventures of a former WWI Italian fighter pilot who now makes his money as a bounty-hunter against "air pirates" on the Adriatic coastline. As a fantasy film the pilot has been struck by a curse and has been turned into an anthropomorphic pig.
As the film ended and we left the cinema a young viewer behind us was exclaiming with some disapproval that it was never explained why the protagonist was a pig. Well young friend, this post is for you, in the hope you find it and your questions will be answered.
As you will recall in the film a very human Marco recalls to the young Fio of a mighty dogfight between his squadron and the enemy Austro-Hungarian aircraft. The battle is so intense that he passes out then 'awakens' to witness a magnificent white band in the sky. As he watches the planes and his fellow pilots drift towards the band, along with their enemy. It is at that point that we see that the band is actually a ghostly apparition of all the pilots who have died in combat.
That is the point of his transformation, literal in the film, and metaphorical in the narrative. Like many others who lived through the horrors of the First World War, Marco has become an internationalist and a socialist - his name translates to "Red Pig" in Italian (c.f., Bandiera Rossa). Whist the politics are secondary to the film, they are still there. The rise of fascism is made quite explicit and Porco Rosso makes his opinion on the subject quite plain: I'd rather be a [socialist] pig than a fascist. This interpretation is not surprising. Writer and director of the film, Hayao Miyazaki, is known for his strong anti-war and socialist - and environmental (c.f., Princess Mononoke), and feminist (c.f., The Wind Rises)- politics.
There is also something else worth noting in the film; it is implied that Marco's face returns to human form when Fio leaves with Gina and gives him parting kiss - like other films of Miyazaki's the themes of entering the adult world is explored and Porco Rosso has two strong female characters, the young Fio and the mature Gina, both treating him like a person rather than a pig. Curtis expresses surprise at the facial change, but we viewers don't see it. Instead, what we do know is that Marco takes off to confront the squadron of fascist planes approaching. After the credits roll, we witness Marco's plane flying above the clouds to join the 'long white cloud' of his ghostly comrades.
In a nutshell, Marco becomes a socialist pig because of the war. He is transformed back to a human because two women treat him as such. And he dies fighting fascists.

Comments
MIYAZAKI: Pigs are creatures
MIYAZAKI: Pigs are creatures which might be loved, but they are never respected. They're synonymous with greed, obesity, debauchery. The word "pig" itself is used as an insult. I'm not an agnostic or anything, but I don't like a society that parades its righteousness. The righteousness of the U.S., the righteousness of Islam, the righteousness of China, the righteousness of this or that ethnic group, the righteousness of Greenpeace, the righteousness of the entrepreneur.... They all claim to be righteous, but they all try to coerce others into complying with their own standards. They restrain others through huge military power, economic power, political power or public opinions.
I myself have a number of things I believe are right. And some things make me angry. Actually, I'm a person who gets angry a lot more easily than most people, but I always try to start from teh [sic] assumption that human beings are foolish. I'm disgusted by the notion that man is the ultimate being, chosen by God. But I believe there are things in this world that are beautiful, that are important, that are worth striving for. I made the hero a pig because that was what best suited these feelings of mine.
http://www.angelfire.com/anime/NVOW/Interview1.html