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The author discusses briefly ways in which madness has been defined, controlled, appropriated, and treated during the evolution of western civilization. “Grand theories” of the aetiology of madness are considered, including physiological, social, and psycho-social explanations. The work of Michel Foucault is examined for its major impact on the understanding of social factors in the categorization and definition of those deemed to be mad. It is noticeable how the role of the unconscious is omitted from much of contemporary theorizing about madness, including in the work of Foucault, where it is relegated to the status of a cultural artifact. The author argues that by incorporating a genuinely psychoanalytic definition of the unconscious into theories of madness, it becomes possible to identify forms of individuality and constructive resistance that supersede the pessimism of Foucault's assessment of human agency. The paper concludes with a criticism of contemporary psychotherapies, especially in welfare state healthcare systems, that fail to address the objective, maddening circumstances of modern life. The resulting overdetermined location of contradiction and conflict in the human mind promotes illusory strategies of reconciliation and harmony that can betray the lived experience of those seeking help. A further consequence of this political and ethical confusion is to underscore the Cinderella status of psychotherapy in many countries.