Gay hatred operates essentially to buttress the ideology of the family, including the gender roles associated with it and to keep to a minimum those who choose to live outside family life. It also provides other workers with a handy scapegoat for their frustration. The real problems with their lives can be blamed on those who are outside or on the fringes of system, rather than the system itself.
Generally the most overt repression has been directed against male homosexuals. But lesbians have had to face plenty of hatred and social ostracism as well and at times have been included in overt oppression - for example during the McCarthy period in the USA. This sort of scapegoating need not always be directed at gay. More often it is directed against racial minorities such as Asians or Jews.
Being gay is only particularly relevant to the extent that gays can be the subject of a certain jealous hatred for their "irresponsible freedom" from the problems of family life. Or they may pose a psychological threat to those somewhat twisted by capitalism’s sexual conditioning.
If gay oppression is not fundamental to capitalism, it is still deeply rooted in the system. It is bound up with the maintenance of the family and the oppression of women, which are fundamental. It is theoretically possible that capitalism could have developed without the oppression of gays or that this oppression could go on withering as it has over the past decade or two without threatening the system.
But capitalism is not some simple mechanical device from which bits and pieces can be removed or replaced at will. It is a total system in which all the component parts interact, reinforcing each other. If one bit comes loose, the operation of the whole can be unsettled. That’s why the capitalist class, once so deeply revolutionary, has become deeply conservative.
And even if we could end specifically gay oppression under capitalism, we would still not be free. For lesbians, their oppression as women would remain. For working class gays, exploitation would not one jot less intense.
~Graham Willett, The Battler, 20 April, 1985