This post is part of the Bodies, Gender, and Domination OOPS Series.
Today the forefront of the emancipatory struggle seems to be identity politics. Political economy on the other hand appears to have lost the attention it once received from the progressive left. However, under closer inspection the new emphasis on identity reveals itself to be entangled with neoliberalism’s ideological framework — a predicament which undermines the emancipatory core it strives for. This complex nexus calls for a reconceptualized critique that avoids the trap of vulgar economy reductionism. Building on the debate between Nancy Fraser and Judith Butler, this article aims to outline the problematic connection between identity politics and the latest mode of capitalist exploitation.
Feminism & Capitalism
Has second-wave feminism as an epochal social phenomenon unwittingly supplied key ingredients to the new spirit of capitalism named neoliberalism? This is the troubling question Nancy Fraser asks in her lecture Feminism, Capitalism and the Cunning of History. At stake is the possibility that the cultural changes jump-started by the second wave, salutary in themselves, have served to legitimate a structural transformation of capitalism society that runs directly counter to the feminist version a just society. After analysing this possibility along four axes of the old state capitalism (Economics, Androcentrism, Etatism, Westphalianism), Fraser diagnoses a paradoxical status of feminism in the new neoliberal era: the initially relatively small countercultural movement has successfully disseminated its ideas across the globe — but on the other hand these feminist ideas “now appear fraught with ambiguity, susceptible to serving the legitimation needs of a new form of capitalism.“ 
The promotion of “privatization,” “deregulation,” and “personal responsibility” marks the qualitative shift from state-capitalism to neoliberal capitalism. In relation to this development, Fraser critiques the move “from redistribution to recognition” after which claims for justice were increasingly couched as claims for the recognition of identity and difference, “pressuring” second wave feminism into a variant of identity politics. This “one-sided focus on culture” is deeply troubling for Fraser, as it downplays the critique of political economy exactly “at the moment when circumstances required redoubled attention to the critique of political economy.” 
One could disagree here with Fraser by demonstrating that her argument relies an economic reductionism in the form of a misunderstanding of culture as a mere epiphenomenon, thereby underestimating its integral role in the reproduction of the capitalist formation. Such a critique is put forward by Judith Butler.
Judith Butler — Merely Neoliberal?
In her essay Merely Cultural Judith Butler describes a nostalgia for a “false and exclusionary unity” which she posits is the driving force behind the jealous attacks of a certain “neoconservative Marxism” that “resents the vitality” of its contemporary opponent, the poststructuralist left that expresses itself through such phenomena like cultural studies and identity politics. 
As Butler parodies in her title, this allegedly “eerie” regressive political formation of sentimental marxists falls prey to a false distinction between the culture on the one side and the economic on the other, in which the former is perceived only as the derivative of the latter. For Butler this represents a helplessly outdated clinging to a basis-superstructure model in the form of a vulgar economic reductionism. She convincingly shows that this opposition is ultimately a false one and even though this position claims to be the ‘real’ left, it is based on a misunderstanding of marxism. Culture, far from being a mere epiphenomenon, is integral to the a mode of production, as it is the necessary functional place of the social reproduction of persons and the regulation of sexuality. In her defense against this sort of reductionism, Butler goes even further, proposing that “the question is not whether sexual politics belongs to the cultural or to the economic, but how the very practices of sexual exchange confound the distinction between the two spheres.“
However, Butler in some sense is avoiding the problems on the table by portraying the “neo-marxist” in an oversimplified manner (a rather cheap psychologism is at play in Butlers descriptions of her opponents). The most pressing critique put forward — the problematization of the post-structuralism shift in the left being “destructive, relativistic, identitarian, particularistic and politically paralyzing“ is not properly addressed even though mentioned at beginning of her essay. Rather these issues go by the board, while the essay concentrates on the easy target (simplistic reductionism). Yet the exact same suppressed problems reemerge in Butler’s discontent with any form of unity/universality — be it in form of a political movement that thrives for inclusivity or a theoretical approach that seeks to conceptually mediate between different phenomena, thereby carrying a certain universal aspiration (e.g. Marxism).
Here a certain deadlock becomes apparent: It seems like a never-ending struggle between political movements, produced through the unavoidable repetition of imposed unity and reemerging resistance, is the ultimate horizon of Butler’s theoretical framework. The “background of ongoing contestation“ that Butler speaks of, strangely mirrors the neoliberal ideology of our present time.
An Immense Accumulation of Identities
One can hardly avoid recognizing the resemblance between identity politics’ conceptual edifice and the ideological framework of neoliberalism: for both the defining idea is that of an atomistic individual — it is perceived as the locus of the battle for recognition and the place where (personal!) freedom must be granted so that the individual’s “creative potentials“ can be unleashed.
Ideology is the key notion here. Ideology should not be understood in a vulgar materialistic sense, as a mere superstructure, reducible to some more “real“ economic basis — but as the productive phantasmic core (or non-relation) at the zero level of the capitalist formation.  This is why Marx starts his analysis of capitalism with an analysis of ideology, namely the fetish character of the commodity form, which reveals itself as the cornerstone of capitalist (non-)society.
Fetishized human relations become reified in objects  — as products of labor, as commodities that appear to have social qualities as they quite literally talk to each other (they are exchangeable). This “fetishization” is not a simple misconception, in the sense that it could be changed through simply providing a positive knowledge. It is much more complex — a “necessary false consciousness” routed in material practices: “They don’t know that they do it, but they nevertheless do it“ (Marx). (Almost everybody is quite aware that a dollar bill, this piece of paper I am holding in my hands, has no intrinsic value in-itself, but nevertheless I am exchanging it for a can of soda — that is: I am participating in a social activity. Commodity fetishism, the belief that commodities are magic objects, is not located in our mind, the way we (mis)perceive reality, but in our social reality itself.)
One character of neoliberal times is that the production of identity itself becomes the place through which capital is accumulated (one might think here of slogans like: “self-optimisation,” “quantified self”) whereby identities appear more and more in reified ways. In commodity fetishism the subjective aspect of social relationships among people involved in production are transforms into objective things that appear as if they have intrinsic value. In neoliberal times this is inverted back on the subjects themselves: As commodified identities they are exchangeable products of labor encountering each other in the department store of personalities, in which each appears as intrinsically valuable, as carrier of a unique irreducible truth that is rooted somewhere in the mystical depth of an ostensibly immediate personal experience/affect/body or even in a naturalized “cultural background.” As commodities these identities are forced to compete on the market by advertising their uniqueness and are doomed to labor on themselves under the constant injunction “just be yourself.” The dialectical couple of this particular social situation is the hyperactivity resulting from the pressure for permanent self-reinvention on the one side and the emphasis on the singularity of every particulate individual on the other. A constellation that finds its mirror image in queer politics affirmation of constant identity-fluidity and the open ended fight for recognition of infinitely differentiated minorities.
It could be argued that neoliberalism and identity politics in this sense are both part of what Adorno in his critique of ideology called Verblendungszusammenhang, a context of delusion. Along these lines one could paraphrase the first sentence of Marx’s Capital: The wealth of those societies in which the neoliberal mode of production prevails presents itself as an immense accumulation of identities.
In this contemporary ideological constellation the atomistic individual is the essential place both in the economic jargon (“privatization,” “personal responsibility”) and in identity politics. In this light certain contemporary concepts — e.g. definatory power, safe space, cultural appropriation — suddenly reveal a problematic dimension, as they seem to repeat the gesture of privatization rather than of emancipation. Even such a concept like diversity, that undoubtedly carries an emancipatory core, can in some sense only become such a defining place for our times, if identity is presupposed as the essential basis. Like the single commodity on the market that represents its exchange-value in mediation to other commodities, single individuals in the locus of diversity are mere representatives for their identities through mediation with others.
In sum, the picture painted here is a dark one: It would be far to easy to tell the story as one in which supposedly ‘good’ notions of identity are co-opted or absorbed by the market. The problem runs much deeper — as an issue of ideology it concerns precisely the intersection and functionally codependence of the “economic” and “cultural” sphere. The crucial insight is then that already the imaginable horizon of a self-proclaimed emancipation project like identity politics is affected by an (unconscious) ideological framework.
Butler, J. 1997, Merely cultural.. In: New Left Review, I, p. 227.
Fraser, N. (2013) Feminism, capitalism and the cunning of history. In: Fortunes of Feminism: From State-Managed Capitalism to Neoliberal Crisis. New York: Verso, p.211.
Tomšič, Samo (2015) The Capitalist Unconscious: Marx and Lacan, New York: Verso
 Fraser, N. (2013) „Feminism, capitalism and the cunning of history“ In: Fortunes of Feminism: From State-Managed Capitalism to Neoliberal Crisis. New York: Verso, p.211.
 Ibid., 223.
 Ibid., p. 219.
 Butler, J. (1997).Merely cultural. In: New Left Review, I, p. 227.
 Tomšič, Samo (2015) The Capitalist Unconscious: Marx and Lacan, New York: Verso.