Combinatorics.Outline: I'm going to prove that for positive integer values of

both sides of the identity agree. Since both sides are polynomials in x if they agree on the positive integers then they must be identical (why?).
Suppose

is a positive integer. I claim both sides count the number of functions

. We can map 1 to any of x values, 2 to any of x values and so on, hence there are

such functions, which is the left hand side. We can also condition on the number of elements of the image/range. If the range contains k elements, then we can partition the domain into k sets, and assign to each set a particular distinct value of the range. There are

ways to partition the domain into k sets, and there are
\cdots (x-k+1) = x^{\underline k})
ways to assign a distinct element of the codomain to each of these k sets, that is easy to see: label the sets of the partition

, then

can be assigned any of x elements,

can be assigned any of x-1 elements and so on, and this constructs a function which has a range containing exactly k elements. Btw, when I say for example

is assigned to 3, that means we're considering the function which maps each element of

to 3. Summing over the possible values of k gives the right hand side and hence proves the result.
