What i've seen is that more or less it is left to the diagnosing psychiatrist to determine whether the degree of interference is significant. "Significant interference" is a subjective standard, which means it is vulnerable to being bent to the prejudices of the day.
I also frequently wonder whether or not much of what is considered psychiatric illness is actually distress brought on by the experience of oppression. For example, for the last 100 years or so women have had numerous kinds of treatments and medicines pushed on them, it being considered canon truth that women are more prone to psychological disorder than men. But how can we know whether or not this is something which is natural in women, or something which is caused by the stress of being treated as second-class by society? The same goes for people of color, people of religious minorities, people who are queer, fat, disabled, neuro-atypical...
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I also frequently wonder whether or not much of what is considered psychiatric illness is actually distress brought on by the experience of oppression. For example, for the last 100 years or so women have had numerous kinds of treatments and medicines pushed on them, it being considered canon truth that women are more prone to psychological disorder than men. But how can we know whether or not this is something which is natural in women, or something which is caused by the stress of being treated as second-class by society? The same goes for people of color, people of religious minorities, people who are queer, fat, disabled, neuro-atypical...