Through the word of God we learn that there are several "either-or" propositions or choices that we have while in this probationary state, such as: Good or Evil; Light or Darkness; Happiness or Misery; and Justice or Mercy.
There is another of which we don't often associate with a choice of one or the other: Zion or Babylon, which appear in scripture as two mutually exclusive entities. Zion represents what Babylon is not, and vice versa. A person cannot belong to both, but must choose one or the other, just as we must choose good or evil, or justice or mercy. Isaiah, for example, describes Zion as both a people and a place--those of the Lord's people who repent and the place to which they return or to which the Lord delivers them. Babylon is the antithesis, namely those who do not repent, and the world--all that the Lord destroys in the day of judgment.
If Zion consists of those of the Lord's people who repent, who return, and whom the Lord delivers, then Babylon consists of all who do not repent, who do not return, and whom the Lord does not deliver. If Babylon stands for the world and the wicked whom the Lord destroys in the day of judgment, then Zion stands for what He does not destroy at that time.
Historically, Babylon was an idolatrous, materialistic world empire which is used in scripture to define latter-day Babylon, which is the idolatrous and materialistic world in which we live. Our choice, therefore, becomes this world (Babylon) or Zion (to which we must be delivered after we repent). We cannot have both as they are mutually exclusive.
We can't claim that we live in the world, but not of the world. We are all in Babylon. But where is the cry among the Lord's people to be delivered from Babylon? It will only come from those of the Lord's people who are repenting, and who desire and want Zion to be established, and who will labor, not for money, but for Zion (2 Nephi 26:31). We cannot ally ourselves with Babylon.
Zion are those of the Lord's people whom the Lord exalts, spiritually and temporally, following a time of probation. Babylon are those who exalt themselves now but who in the end suffer humiliation. They are those whom Lehi and Nephi saw in the large and spacious building, who pointed the finger of scorn at those who ate the fruit of the tree of life.
So how should we view our present situation of being in Babylon where Zion has not yet been established? Hugh Nibley, in his enlightening book Approaching Zion, articulates many problems we face today in becoming a Zion people. As he points out, instead of having become more Zion-like since the restoration of the Gospel through the Prophet Joseph Smith, we seem to have acquired more of the characteristics of Babylon. Instead of having become God's peculiar people, a nation of kings and priests, queens and priestesses, we have become, as some of our modern prophets tell us, an idolatrous people, a people under condemnation, treating lightly the things (words) we have received.
If this is the beginning point, where do we go from here?
First, we must recognize where we are. We live in Babylon and our employer is Satan, and it is his system that we work and labor in. This has been true (with a few exceptions where Zions was established) since the time of Adam, where Cain and many after him rejected God and chose to operate under Satan's system--which is Babylon, and which will be destroyed.
Second, we must recognize that we are slaves in this system and cannot deliver ourselves from it, even though we can pray for and desire it. Like the children of Israel in Egypt, we are slaves in Babylon and must be delivered.
Fourth, we must feast upon His words and believe them--not treat them lightly (D&C 84:49-58). Through His words we come to know that Zion will be established by those who believe His words, exercise faith in Him, repent and rely totally upon His merits to save them. Through His words we learn that the Prophet Joseph laid the foundation for the latter-day Zion, and that callings and offices in the restored Church of Jesus Christ exist expressly for the purpose of establishing Zion and her stakes (D&C 107:36-37, 59, 74). The Saints' labors in the Lord's vineyard build up the Church, which helps bring forth Zion (D&C 39:13). We will come to know that the purpose of the Doctrine & Covenants is to lay the foundation for the building up of the latter-day Zion. We must labor for Zion and not for money (2 Nephi 26:31).
Fifth, we must come to know that Zion cannot be built up unless it is built up by the law of the celestial kingdom (D&C 105:5), meaning we must desire to live the law of consecration so there will be no poor among us.
But are we enjoying Babylon so much that we don't even think of Zion? Are we like the Jews who were captured by the Babylonians and taken back to Babylonia, only to want to remain in Babylon even after they were free to go back to Jerusalem?
(I recommend reading Paradigms of Zion by Avraham Gileadi, for a very comprehensive scriptural analysis of Zion and Babylon, not only the historical Zion(s), but the prophesied Zion(s) of the latter-days).