In this article, John D’Emilio proposes that modern-day gay/lesbian identity is a product of the social conditions that capitalism has created.
It is important here to recognize the difference between behavior and identity: while behavior transcends time and location, its significance varies in each time period and each place (a concept examined more thoroughly in A Queer Time and Place). For example, a man having sex with another man meant something very different in ancient Rome than it does in modern-day San Francisco. So by saying that capitalism has created contemporary gay/lesbian identity, D’Emilio suggests that the significance of gay/lesbian behavior in present-day US is shaped primarily by our economic system.
The article begins by describing seventeenth century colonial families, in effect small economies of their own. Sex was strictly for procreation, and the family unit was interdependent. Each family member—men, women and children—needed each other for different steps in the production of necessary items like bread and clothes. And while homosexual behavior did exist, there was no space for an individual (or even a gay couple) to live outside the family economy, so this behavior did not evolve into a way to live or identify.
But as capitalism began to take hold, individuals worked for wages, became more independent, and no longer needed the old model of the family economy because they could buy food, clothing, etc. with their own wages. The function of relationships and sexuality shifted from procreation to emotional and sexual satisfaction, which created a space where homosexual behavior was an acceptable form of expression. The subsequent rise in homosexual behavior created a community of individuals who were attracted to their own sex, and this community created a new way to identify. In this way, capitalism created gay identity.
After presenting this theory, D’Emilio argues for a new, more effective political strategy for LGBTQ Americans that focuses on supporting individual autonomy and strong community, rather than emphasizing the false importance of the outdated “family unit” and normalizing gay identity (as legalizing gay marriage would do). The main concern, not just from D’Emilio, but from large queer political factions, is that the current strategies (like the work of HRC, EQCA, and similar organizations) are, simply put, appealing to the heteronormative majority for acceptance into their world of nuclear families and traditional gender roles. The problem with this is that, as the timeline from 17th century to modern-day illustrates, the things we are trying to achieve are outdated. Their irrelevance is proven by our very existence as contemporary queers. So supporting individual autonomy as well as stressing the importance of community is the much more forward-looking route to take. Real life examples of this strategy are embodied in political actions like supporting pro-choice, welfare, and affirmative action for people of color and women.