In the 1940s and 50s, during the late stages of the Fundamentalist-Modernist controversy, Fundamentalists divided into two roughly defined camps: those who left the mainline denominations to avoid the leaven of modernism and those who remained behind in hopes of reforming the established denominations from within. Representative of those Fundamentalists who withdrew (or were forced) from the mainline denominations was Carl McIntire and other separatist members of the American Council of Christian Churches. On the other hand, Harold Ockenga and members of the National Association of Evangelicals often remained part of the denominations.
During the time of religious revival post-WWII, these two branches of fundamentalism split into what we call modern fundamentalism and new evangelicalism. The new evangelicals saw their position as keeping the baby while draining the bathwater. The fundamentalists thought the old denominations irreversibly corrupted.
Thus it is ironic that these two camps have mutated and now seem to have switched positions. I attend a church in Philadelphia that has been described by the pastor as “fundagelical.” In other words, it attempts to split the difference between fundamentalism and evangelicalism, though in all honesty the accent belongs on the second half of the word. Indeed, among self-declared fundamentalists there is a growing movement called “Young Fundamentalism” that seeks to counter the more radical fringes of fundamentalism. The (as of yet) implicit point of distinction between young, conservative evangelicals and young fundamentalists is similar to that which historically separated fundamentalism from new evangelicalism, but with one key difference: they have switched sides.
Conservative evangelical emigrés leave fundamentalism because they think it unsalvageably marked by legalism and isolationism; they must leave for happier (and often, more Reformed) climes. Young fundamentalists, on the other hand, argue that fundamentalism is worth saving. To leave the movement now would be to eject the good along with the bad; better to stay fundamentalists and purge it from within.