U'ren - Psychiatry and Capitalism

Psychiatry and Capitalism © 

by Richard U'ren, M.D.


Psychiatry presents itself as a discipline whose advances in classification and treatment represent a series of discoveries analogous to discoveries in the natural sciences.  Thus aligned with the putatively value-free traditions and naturalistic methods of science and medicine, it is not easy to see the extent to which it is influenced by an economic system whose ideology and values forcefully shape it.  The impact of capitalism on psychiatry becomes apparent when the dominant tenets of capitalism are compared with the assumptions of psychiatry.  

The Dynamics and Ethics of Capitalism  


Capitalism is a highly rationalised system that has great power to command resources, compel behaviour, and generate profit.  It is best understood as a process, a continual transformation of money into commodities and back into more money.  This is usually expressed as a formula, M-C-M’, in which M represents the initial investment of money in the machinery, raw material, energy input, and labour power that goes to make C, the commodity (a material object or service) to be sold.  M’ represents profit, in the form of money, from the sale of C.  "The single most important element in capitalism," observes Robert Heilbroner, "is the driving need to extract wealth from the productive activities of society in the form of capital" (1985, p. 33).  It is "the life blood of the capitalist system" and the means for the further expansion of capital (Harvey, 1989, p. 17; Heilbroner, 1985, p. 76).  In contrast to earlier economic systems, capitalism's use of wealth is not an end in itself but a means for generating yet more wealth in a never-ending cycle of private accumulation (Berger, 1987, p. 17; Heilbroner, 1985, pp. 34-35).  The exceptionally dynamic and expansionary nature of this unique economic system is driven in part by vulnerability.  Capital in its money form is in a perpetual state of vulnerability as it passes through the M-C-M’ cycle.  All commodities are continually exchanged for money, which is then available to all capitalist rivals and their products.  Each capitalist must try to win back, through the sale of commodities, the money that has been invested in the commodification process.  Administrative and management costs or the purchase of labour power or raw materials are examples.  The continual transformation of money into commodities and back into money generates competition among capitalists to gain as much of the public's purchasing power as possible.  The most effective means to gain a competitive advantage over other capitalists is to develop new ways of organising the M-C-M’ circuit in its middle link, since new or more efficiently produced commodities increase the likelihood of recapturing M’.  In its search for consumers, capitalism constantly scans daily life for activities or spheres of activity that can be transformed into C and pulled into its field of gravity.  Thus washing, walking, and writing are commodified as washing machines, automobiles, and word processors.  These are concrete objects, of course, but human services can also be commodified.  Dry cleaners, chauffeurs, and secretaries embody the commodification of these services.  In its early stages, capitalism's single-minded pursuit of wealth and profit was looked upon as morally problematic.  How was the unlimited accumulation of wealth to be justified?  After all, there was a well-established moral tradition in Christianity that discouraged avarice, greed, and usury.  The New Testament had long inveighed against needless acquisition: "Lay up not for yourselves treasures on earth," "For what shall it profit a man, if he shall gain the whole world, and lose his own soul?" (Holy Bible, 1611/1952, pp. 1237, 1297).

John Locke, articulating the soon-to-be prevalent view, argued that an individual who encloses land and cultivates it increases its yield so that the acquisition of land generates more wealth, which is presumably available to others in the forms of expenditures, jobs, charity, etc.  With this argument Locke simultaneously helped to attenuate a serious moral problem intrinsic to capitalism and created an ideological view of accumulators as benefactors (Locke, 1690/1952, pp. 16-30).  

The Capitalist Ideology  

Of all the parts of the capitalist belief system that have served to justify the system itself, none is more paramount than the concept of individualism (Barney, 1994).  Individualism is a doctrine which asserts that all social and individual phenomena can only be understood in terms of facts about individuals (Lukes, 1973).  Eliminated from this perspective are analyses based on class, race, gender, or other socioeconomic factors.  One of its most dominant strands, economic individualism, first emerged as a powerful force in the Middle Ages with the advent of the bourgeoisie, a class that sought to establish and expand its rights to do business without interference of king or church.  In its fully developed form, economic individualism was articulated most coherently by Adam Smith, who maintained that single individuals working in their own self-interest and coming together voluntarily in a free market could co-ordinate the activities of millions of people in such a way as to make everybody better off (Smith, 1776/1976).  Smith claimed that a productive economic order emerges as the unintended consequence of many people seeking their own self-interest.

This assertion was ideological, in part, in that it allowed an emerging capitalist class to justify the pursuit of wealth with the rationale that whatever profited the individual was really for the benefit of society.  Al Capp, the political cartoonist, captured this attitude some years ago in the person of General Bullmoose, in turn a caricature of the then-president of General Motors, who asserted that what was good for Bullmoose was good for the country.

If what is good for the individual is good for society, then, by analogy, whatever activities create profit also serve society, so that a blanket moral exemption tends to be thrown over all activities that generate wealth, thus removing challenges to the logic of capitalism and to the ethics of its practices (Heilbroner, 1985, p. 116). Smith's conclusion thus dovetails with Locke's.

An extension of individualism is the value of individual effort.  The virtue of hard work has been, historically, at the core of the capitalist creed.  It is not true that hard work has been a universal value in all societies at all times (Mills, 1951, pp. 215-238).  Its glorification is a peculiarly modern one. The sanctification of hard work in secular life may initially have been linked with the rise of Protestantism, as Max Weber argued (Weber, 1958).  But, whatever its roots, this ethic lies at the heart of capitalism's historic achievements.  Work is both a mark of personal virtue and the route to material reward through individual effort.  Phrases such as "Anyone who works hard will get ahead" or "If you just set out to be something, you can do it" are still well-known to all middle-class Americans.  It is clearly assumed that both success and failure in life are almost exclusively the outcome of individual effort - or lack of it.

Today, however, the ethos of consumption overshadows the work ethic as a core value of capitalism (Lears, 1983). The importance of consumption for the health of the system is not in doubt: the massive production system created by capitalism requires massive consumption if the economic system is not to stagnate and collapse.  Consumption of commodities and services is glorified to represent the democratic ideal of free choice and serve as evidence for the superiority of capitalism.  Consumption is also promoted as the route to happiness and well-being.  These claims are misleading, however, not least because they ignore the role of corporations in shaping wants and needs through advertising, for example, and overlook the fact that meaningful choice is denied to a sizeable portion of the population.

These, then, are some major points of capitalist belief: individuals are responsible for their own success or failure; activities that create profit benefit society; individual effort - work - is the means through which good character is expressed and success achieved; freedom of choice is manifested and well-being attained by consumption of the appropriate goods or services.  

Psychiatric Ideology

For psychiatrists, disorders are located inside minds and bodies.  This fact is reflected in the psychiatric diagnostic system, which allows a practitioner to apply any one (and sometimes several) of over three hundred diagnostic labels to a person, specifying what the problem is.  This authority to locate and identify a problem, to say where it is and what it is, represents the power - and the bias - of psychiatry.  Psychiatrists locate problems not in culture, not in the economy, not in the social system and not in work (though these may all be considered "stressors") but inside individuals. Problems of all sorts are defined as personal and individual since they are felt, experienced, and expressed individually.

The meaning of psychiatric symptoms is not always clear.  Paranoid delusions, anxiety episodes, and depression, for example, may all have personal and social meaning, but these meanings are frequently hard to interpret.  For better and for worse, this is not necessarily a problem for psychiatrists since the form and constellation of symptoms are more important for diagnosis and treatment than are their substance and meaning.  For instance, major depression, according to the current Diagnostic and Statistical Manual of Mental Disorders, can be diagnosed when the patient expresses a certain number and intensity of symptoms - low mood, poor sleep, weight loss, etc. (American Psychiatric Association, 1994, pp. 339-345).  It is not necessary to understand the personal meaning of the symptoms or even the possible causes in order to initiate the most common psychiatric treatment for it, pharmacological therapy.  This simplified approach, which of course increases inter-rater diagnostic reliability, has an efficient, almost admirable straightforwardness about it.  But it also serves to empty symptoms of their possible moral, political, economic, or social meanings and implies that they possess only psychiatric or biological significance.  In effect, it decontextualises the individual (Susko, 1994).

Psychiatrists also learn that work is a criterion of mental health.  Freud himself, when asked what a normal person should be able to do well, said "Love and work" (see Erikson, 1963, pp. 264-265).  In Erik Erikson's scheme of psychosocial development, being industrious, "learning to complete something, doing a job," is the mark of successfully navigating the "industry" phase of development (ages 5-13!), upon which later successful development and, presumably, happiness depend (Evans, 1967, p. 26).

These points, then, constitute a major part of the psychiatric belief system: pathology and problems are located solely within the individual; symptoms have medical but not moral or other kinds of significance; and work is not only essential to human happiness but is also a criterion of mental health.  

Affinities Between the Ideologies of Capitalism and Psychiatry

Capitalist and psychiatric beliefs show correspondence.  Capitalism maintains that both success and failure are dependent on individual effort.  Psychiatry places mental illness squarely within the individual and looks for the solution there.

Both capitalism and psychiatry obscure substantive moral dimensions of their practices.  Capitalism tends to mute ethical challenges, for example, by pointing to the vast amount of wealth it generates and to the increased standard of living it creates for many.  Similarly, in concentrating only on the form and configuration of symptoms rather than on their meaning, psychiatry tends to mute the social, economic, or moral significance of symptoms.

Both capitalism and psychiatry place high value on work and productivity.  Capitalism ascribes good character to the individual who works conscientiously and promotes hard work as the route to individual success.  Psychiatry reinforces this by maintaining that the ability and desire to work is a sign of mental health.

From a critical perspective, psychiatry has a dual function within capitalism.  Capitalist society has brought into existence a class of experts trained to deal with the negative consequences of the very conditions that, historically, capitalism itself has helped bring about: disruption of local community life and emotional bonds, deracination, depersonalisation of work, the anomie of urban life.  Psychiatry and psychotherapy represent modes of treatment that have evolved not only to provide relief of symptoms, but also to bring comfort, encouragement, and personal attention to lonely and demoralised individuals in a society where close personal relationships and community are often absent. However, the form of care is not the same for all social classes.  Like all goods and services, care is distributed unevenly in a capitalist society depending upon ability to pay.  The upper strata, at least until recently, have received therapy that is oriented toward insight and understanding, while those in the lower socio-economic strata get treatment that more closely resembles administrative management: hospitalisation, briefer more directive psychotherapy, and tranquillising medications (Garfield, 1994; Hollingshead and Redlich, 1958).

In identifying the single person as the locus of pathology psychiatry also serves to reinforce the ideology of capitalism, that success or failure - in work, in emotional life - is largely an individual matter.  Psychiatrists are trained to give individual labels to problems which, if not social or economic in nature, at least have large social and economic dimensions, problems such as the effect of unsatisfying work or unemployment on individuals or families; the consequences of poverty; the effects of an aggressive, highly rationalised, and competitive business economy on men and women who do not or cannot fit in; and the dislocations and disruptions to identity and security that follow from rapid technological advances, altered expectations, and ever-new demands in the workplace.  

How Psychiatry Develops Its Market

Psychiatry's relationship to the consumerism and consumption of capitalism remains to be considered.  There are similarities here, too, of a subtle and far-reaching kind.

Max Weber pointed out that all enterprises within the capitalist system "must conform to capitalist rules of action" or face elimination from the economic scene (1958, pp. 54-55).  Nowhere, nor as unexpectedly, does psychiatry act more like a competitive business enterprise than in the expansion of its diagnostic classification system.  In order to create and maintain a market for its services, psychiatry must constantly enlarge the public's awareness of the kinds of problems it can address.  It does this, in large part, by expanding its diagnostic system so that more and more experiences are brought within its domain, just as capitalism scans daily life for activities that can be brought into its circuit of accumulation.  In business, labour-intensive activities are transformed into labour-saving commodities, while in psychiatry troubling experiences are transformed into mental disorders.  This is where the dynamic of psychiatric diagnosis mirrors the dynamic of capitalism.

For example, experiences of loss, sadness, insomnia, and fatigue may become "depression."  Low self-esteem, excessive sleep, and overeating may be labelled "dysthymia."  Traumatic experiences and their aftermath become the "post-traumatic stress syndrome."  Entirely new categories of psychopathology have been created that include many varieties of drug abuse, sleep disorders (e.g., trouble falling asleep is now "primary insomnia" and sleepwalking is "sleepwalking disorder"), eating disorders, and - lying in wait in the appendix of the current Diagnostic Manual, hoping to move up into the ranks of established psychiatric disorders - the pre-menstrual syndrome, called there the "Pre-menstrual dysphoric disorder" (American Psychiatric Association, 1994, pp. 715-718).  In 1952 the psychiatric Diagnostic Manual contained one hundred entries.  It now has over three times that many.  That the painful and troubling experiences represented by these diagnostic labels actually exist no one doubts, but why they should be converted into psychiatric disorders is the core issue.  While the evolution of the Diagnostic Manual undoubtedly represents a refinement from a diagnostic perspective, it just as surely represents a significant annexation of human experience by psychiatry from another.  In fact there are very few adverse experiences a person can have that cannot be fit into a psychiatric category.

This development has important consequences.  First, control over the definitions of mental illness helps psychiatry maintain hegemony over other mental health competitors, principally psychologists who have been bold enough to request hospital and prescribing privileges and social workers who provide many of the same services as psychiatrists yet at lower cost.  Second, by constructing recognisable patterns of dysfunction, psychiatry teaches troubled individuals to view their problems in accordance with established psychiatric definitions.  Once these psychiatric categories have been constructed and the person is defined by them, the social and moral implications of the individual's experience have been reshaped to fit an individualised treatment approach.  Psychiatric discourse thus traps or captures certain experiences and offers them up for psychiatric ministration.  This process also, reinforcing as it does the idea of psychiatry in its association with medicine and science as a neutral, objective, value-free endeavour, mystifies everyone, psychiatrists and patients alike, about the social, political, and economic dimensions of personal problems.  To the extent that psychiatry isolates the individual and leaves untouched real social problems and conflicts, its role is inadvertently and unfortunately one of obfuscation.

There is a final way that psychiatry and capitalism are related.  Marx pointed out that criminals produced not only crime but also criminal law, criminology professors, and textbooks of criminology (Bottomore and Ruel, 1963, p. 167).  In similar fashion, so do mental patients produce not only mental illness but also psychiatrists, psychiatric diagnoses, psychiatric wards, mental hospitals, and the rest of the therapeutic industry.  The mental health profession obviously does not produce mental illness in individuals.  But it does create, through its classification system, the names and categories of individual mental suffering that feed numerous training and continuing medical education programs in psychiatry, that nourish the companies and organisations that publish and distribute the ever-increasing number of books, journals, video and audio cassettes that address the nature, diagnosis, and treatment of mental illness.  And, not least, its categories fuel the psychopharmacology industry and vice-versa.  In these ways, a traditionally non-productive group of people - the "mentally ill," many of whom are unable to work in the usual ways - get drawn back into the productive cycle of capitalism.  

Psychiatry Corporatised

Perhaps the connections between capitalism and psychiatry have been obscured for a variety of reasons.  Psychiatric and medical care were not, until recently, delivered by large corporate entities.  Also, psychiatry, and medicine generally, have been viewed as different kinds of activities: business means money and profit while medicine means care.  Although American physicians have traditionally done well financially, profit-making or mass corporate profit-taking was never the professional ideal.  Relief of suffering, even at the cost of personal sacrifice, was.  Largely because of the strength and homogeneity of the American Medical Association, organised medicine was able to remain outside the market system throughout most of this century.  It repeatedly rebuffed the attempts of both socialized medicine and for-profit business to infiltrate its ranks (Starr, 1982).  Furthermore, because of their privileged position in society there was no incentive for physicians to look critically at a system so beneficent to them.

This is no longer the case.  The increasing reliance on new and expensive technology and pharmacological products; the rising and seemingly uncontrollable cost of health care; the unwillingness or inability of anyone to control those costs; and the waning of the American Medical Association's strength and influence have brought psychiatric and medical care squarely into capitalism's sights as activities that can be incorporated into its circuit of accumulation.

This is done in the usual way.  Psychiatry and medicine are brought into the M-C-M’ cycle by organising services as a commodity that can be made to generate profit, M’.  The basic idea of this new system, called "managed care" but more accurately named "commodified care," is to divide service providers into competing economic units that will contract with managed care organisations to provide standardised packages of medical benefits at fixed rates (Iglehart, 1993).  Businesses or agencies that sponsor employees for membership in managed care organisations are attracted to this form of health care because they promise lower and more predictable costs on a prepaid basis.

There are two basic strategies for commodifying health care. In the first, an entity called a health maintenance organization (HMO), often but not always sponsored by one of the large insurance companies such as Aetna or Prudential, contracts with employers to provide health care for the company's employees at prepaid rates.  In order to keep costs down, the HMO then manages all aspects of care: selection of psychiatrists and other physicians who agree to accept a discounted fee; prior authorisation of all treatment by either the patient's primary physician or the plan's administrative physician as well as close on-going monitoring of the treatment itself; and standard protocols of treatment that favour less-expensive therapies: medication instead of psychotherapy, short-term therapy instead of long-term therapy.

The second commodifying method is called capitation.  An HMO offers to pay a group of psychiatrists (or other clinicians) a fixed fee per person (per head = capitation) to assume responsibility for a cohort of patients for a certain period of time.  In this model responsibility for managing care, for holding down costs, is shifted to the treating psychiatrist, who makes money if patient needs are low and loses money if patient needs are high.

There is little disagreement that such arrangements can cut costs.  There is also no doubt these strategies represent a shift away from care and toward profit.  For patients, lower costs for medical care are balanced by restrictions on their choice of physician, occasional denial of necessary services, bureaucratic delays if additional services are requested, or inadequate treatment (Passaro, 1993; Pear, 1995b; Rogers, Wells, Meredith, Sturm, and Burnam, 1993; Sullivan and Sehnert, 1994).  For physicians, the problems are equally great but of course different.  Loss of professional autonomy - which includes such issues as fee setting, workload, amount of time spent with each patient, and the kind of treatment prescribed - is unavoidable.  And, as expected, managed and capitated care creates serious ethical problems in that physicians' responsibility to care for patients may be subordinated to the quest for profit (Alper, 1987; Belkin, 1991; Bricker, 1989; Culliton, 1986; Freudenheim, 1992; Kassirer, 1995; Konner, 1993; Relman, 1991).

What is not debatable in this commodification of health care is who gets the money.  In a capitalist system, one would expect large corporations to profit the most.  This is exactly what has happened.  Private, for-profit companies such as Prudential, Cigna, Travellers, Metropolitan Life, and Aetna currently control 65 percent of the managed care market in the United States (Eckholm, 1994; Kerr, 1992, 1993; Pear, 1993).  Medicare and Medicaid patients are being forced or enticed into for-profit managed care organisations in many states (Eckholm, 1995; Freudenheim, 1995b; Pear, 1995a).  The chief executive officers of the seven largest health maintenance organisations received an average reimbursement in the form of cash and stock awards of 7 million dollars in 1994 (Freudenheim, 1995a) and several of the HMOs have so much cash on hand (in 1994 the nine largest publicly traded HMO's had $9.5 billion) that they literally have trouble knowing how and where to invest it (Anders, 1994).  Some have turned to putting their money in tobacco companies, which, in spite of bad press, still remain a good investment (Boyd, Himmelstein, and Woolhandler, 1995).

Momentous as these changes are for psychiatrists and other health care professionals, they represent little more than an old pattern.  A particular activity, but this time one previously controlled by a profession, is rapidly being subordinated to corporate control like so many activities before it.  Large corporations are commodifying psychiatric and medical care, thus reducing the price of health care to consumers (though not without cost) and insuring a healthy profit for themselves.  None of this is surprising to those familiar with the dynamics of capitalism.


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This article was previously printed in the Journal of Mind and Behavior, 1997, 18(1), pp. 1-12 and has been reprinted with permission.


Richard U'Ren is Clinical Professor of Psychiatry at the Oregon Health and Science University in Portland. He received his medical degree from McGill University in 1964 and completed a psychiatry residency at Stanford Medical Center in 1970. From 1970 to 1972 he was chief of psychiatry at the U.S. Military Academy, West Point. He joined the faculty of Oregon Health and Science University in 1972 and has served as director of the psychiatric outpatient clinic and co-director of the consultation service. From 1998 to 2000 he was visiting professor in the psychiatry department at the University of Tuebingen in Germany. Dr. U'Ren is the author of two books [Ivory Fortress (1974), an account of his experience at West Point, and The Practice of Psychotherapy (1980), a guide for the beginning therapist] and some forty articles and chapters on topics ranging from geriatric psychiatry to social aspects of psychiatry. He is currently writing a book about the social dimensions of psychiatry.