The Functions of the Mental Health System Under Capitalism

Mad in America hosts blogs by a diverse group of writers. These posts are designed to serve as a public forum for a discussion—broadly speaking—of psychiatry and its treatments. The opinions expressed are the writers’ own.

By Joanna Moncrieff, MD – March 26, 2022

In this blog I look at the functions of the mental health system as they relate to the economic and social structure of society using Marx’s economic framework. I conclude that the mental health system is essentially a system of care and control, that is legitimated by the concept of mental illness and that plays a particularly important role in capitalist and Neoliberal societies.

This blog summarises a paper I recently wrote called the Political Economy of the Mental Health System: a Marxist analysis.1 I wanted to work out what Marx’s economic analysis means for the role of the mental health system and also to consider the relevance of some other key Marxist ideas and some of the vast amount of Marxist literature on social institutions in general, and mental health in particular.

Why Marx? Because Marx looks through the surface to the deeper economic structure of modern capitalism and thereby brings to light the roles and functions of institutions and activities as they relate to the processes of production and exchange that form the essential basis of social life.

Most importantly, Marx describes what is distinctive about the capitalist method of production and how it differs from previous forms of production. Capitalist production involves the extraction of surplus value from wage labourers, meaning that labourers have to produce the value of their wages plus a bit more—and the bit more is the surplus value that forms the profit of the capitalists. This is the technical meaning of the term ‘exploitation’ in Marx. It is why capitalist industry gravitates to places where wages can be kept low, so that surplus value can be maximised, while keeping goods cheap to maintain market share.

Marx also reveals how social institutions evolve to support the prevailing economic system. As far as the mental health system is concerned, some of its functions are apparent in most social groups or societies and transcend particular economic arrangements, but some are more specific to capitalism. The modern mental health system (or much of it) can be understood as part of the Welfare State that started to develop in the early 20th century to ameliorate the worst ravages of capitalism in the face of potentially revolutionary insurrection by the working class.

Several influential previous works have drawn on Marxist ideas and principles, particularly the work of Michel Foucault and Andrew Scull, and I am indebted to these, while also embracing work on more recent trends in politics, economics and mental health services.

Mental disorder as a social problem

First I consider briefly what we mean when we speak of mental illness or mental disorder. I suggest that instead of equating mental health problems with medical conditions, we should think of them as problems of communities or societies. I acknowledge that bona fide brain diseases can sometimes cause challenging or problematic behaviour, but as most readers of this blog will be aware, there is no convincing evidence that any mental disorder barring those classified as ‘neuropsychiatric conditions’ or dementia result from specific, identifiable abnormalities of brain activity. I conclude that what we refer to as ‘“mental illness” is simply a collection of challenging situations that remain when those that are amenable to the criminal justice system and those that are caused by a specific, medical condition are taken out of the picture.’1

The process of uncovering the social functions of the mental health system helps to clarify what these situations consist of and what makes them problematic.

The origins and functions of the mental health system

Consistent with Marx, the modern mental health system evolved alongside capitalism as it emerged in Europe and the United States, and it is useful to consider how it arose, and also what predated it.

In England from the 16th century, a series of laws called the Poor Laws enabled local officials to manage various social problems linked to poverty, including the problems posed by people who would nowadays be labelled as having a mental disorder. Looking at material from the Poor Law records suggests the Poor Law fulfilled two main functions in this respect: it enabled the provision of care for those people who could not look after themselves (and for their families if it was the bread winner who was incapacitated) and it allowed for the control of behaviour that put the peace, harmony and safety of the community at risk, but was not amenable to the usual forms of community punishment or formal legal sanctions. The Poor Laws catered only for families who were not wealthy enough to make their own arrangements and they took over some of the functions of the monasteries that were destroyed under Henry VIII, particularly provision of care for the sick and disabled. They also formalised pre-existing local, informal arrangements of social control.

The rise of capitalism and industrialisation in England in the 18th and 19th centuries threw more and more people into poverty, and these local arrangements started to become increasingly burdensome, bringing the idea of institutional solutions into vogue. Following the Poor Law Amendment Act of 1834, those who were unable to provide for themselves were forced to enter the forbidding Victorian Workhouse to obtain public assistance. The regime in these institutions was deliberately designed to be harsh and punitive so that people would endure low paid work in terrible conditions to avoid having to resort to them. When people did turn to the Workhouse, in desperation, they would be motivated to leave as soon as possible.

The public mental asylums arose in this context and were designed to provide a pleasanter, more therapeutic space for those residents or potential residents of the Workhouse who were mentally disturbed. Right back in the Elizabethan Poor Law a distinction was made between the deserving and undeserving poor, with the idea that the undeserving poor were the lazy and unmotivated who could be forced back to work, while the deserving poor were the sick and incapable who could not. The asylum arose to cater for a section of the deserving poor and it was believed that the gentle, but structured regime (as it was intended) would help restore the mad to sanity and thereby render them fit to work.

In other words, the capitalist system made it necessary to separate the deserving and undeserving poor, so as not to undermine efforts to make the majority fit for exploitation in the exacting environment of early capitalism. Asylums provided a place for the care of the unproductive and for the containment of disruptive behaviour that might threaten social harmony and make other people less willing or able to be exploited.

In recent decades, the functions of the public asylum have been privatised and re-distributed among a network of private providers of secure facilities, residential homes, home care teams and, of course, families. This was designed to reduce costs to the public sector through the provision of less intensive care by a lower paid, less skilled workforce, and to increase opportunities for the generation of profit.


Alongside institutions and associated health and care services, state provision for people with mental health problems includes welfare benefits. Like the early Poor Laws, welfare benefits provide assistance to people who are unable to support themselves, including those suffering from forms of mental distress. Marxist disability literature has made the point that capitalism creates dependency by requiring that people are productive enough to produce surplus value in order to be employable. Whereas in pre-capitalist societies most people could do some useful work in the community, in the capitalist system labour only has economic value if it attains levels of productivity sufficient to generate profit for the capitalist. Therefore, ‘one of the major roles of the welfare state is to provide financial or material support for those who cannot work intensively enough to generate surplus value.’1

In recent decades the number and proportion of people who receive benefits for mental health problems has increased dramatically in association with the rise of Neoliberalism. In the mid 20th century, as a response to agitation by workers and the 2nd World War, wages and working conditions improved. Since the 1980s those gains have been eroded and work has become highly competitive and insecure, driving many people out of the workforce and onto benefits. People become demoralised and marginalised and are diagnosed as being mentally unwell. As a consequence, mental health problems are now the most common reason for receiving sickness and disability benefits, which, like the asylums, help to keep ‘the non-working population quiet and secluded so the rest can be effectively exploited.’1


Another Marxist concept that is useful in understanding the mental health system is ‘hegemony’—that is, influencing people’s behaviour through persuasion and consent rather than force. The previous functions of the mental health system—both institutional psychiatry and welfare—are dependent, at least for now, on the idea that mental disorders are medical conditions that, like other medical conditions, arise from the body and are therefore independent of the individual’s agency. This means the individual’s wishes can be conveniently over-ridden when their behaviour is causing a nuisance or a danger. By placing people in the sick role, the notion of mental illness also justifies the payment of sickness and disability benefits.

The ‘psychiatric re-shaping of personhood,’5 as Nikolas Rose called it, has been gaining momentum in recent years thanks to the efforts of the Pharmaceutical Industry, and the majority of the population in many countries have now absorbed the widely marketed narrative of the chemical imbalance. The misery and worry that is the natural response to poverty, discrimination and insecurity are transformed into individual medical problems. In this way, the idea that mental health problems are diseases or illnesses can be thought of as an ‘ideology,’ to use another Marxist term, which refers to a false set of beliefs that obscure the reality of life under capitalism.


Although it is presented as a medical system, aiming to treat medical disorders, I suggest that the functions of the psychiatric system really consist of providing care and facilitating control. These functions have endured across the centuries, but have expanded with the evolution of capitalism that demands that workers not only work to provide for or contribute to their own upkeep, but produce surplus value. Regardless of the evidence or lack of it, it is necessary to regard the recipients of the mental health system as being medically sick in a way that can be aligned with physical illness or disease in order to legitimate current arrangements. The concept of mental illness justifies the use of force against people in situations where the criminal justice system cannot be applied, and authorises the provision of financial support and care for people who cannot work or look after themselves in other ways.

The organisation of production under capitalism generates many of the problems we call mental disorders. An economic system that distributed resources more equitably, that provided security of income, housing, education and healthcare and enabled more people to participate meaningfully in economic and social life would wipe away much of the current mental health epidemic that is so closely linked to financial insecurity, debt, lack of housing, loneliness, fear or feelings of failure and lack of purpose.

However, unlike some other critics of psychiatry, I believe some of the functions of the mental health system remain necessary in any society, though this does not mean that they need to be carried out as they are today. History suggests there will always be people who become disturbed from time to time and need care and or containment of some sort. What is important is to confront these problems honestly so we can address them in as fair and humane a way as possible.

  1. Footnotes:
  2. 1. Moncrieff J. The Political Economy of the Mental Health System: A Marxist Analysis. Front Sociol. 2022;6:771875. 
  3. 2. Moncrieff J. The Political Economy of the Mental Health System: A Marxist Analysis. Front Sociol. 2022;6:771875. 
  4. 3. Moncrieff J. The Political Economy of the Mental Health System: A Marxist Analysis. Front Sociol. 2022;6:771875. 
  5. 4. Moncrieff J. The Political Economy of the Mental Health System: A Marxist Analysis. Front Sociol. 2022;6:771875. 
  6. 5. Rose N. Becoming neurochemical selves. In: Stehr N, editor. Biotechnology, Commerce and Civil Society. New Brunswick, New Jersey: Transaction Publishers; 2004. p. 89-128.