I have to say at the outset that this is one of the most difficult questions I have ever approached and I have no hope of answering it - only contributing ideas to the debate. It brings to mind a New Zealand publication I can't remember off hand on the dangers of pathologising racism - if any one knows of it - could you please point out the reference.
"After several racist killings in the civil rights era, a group of black psychiatrists sought to have extreme bigotry classified as a mental disorder. The association's officials rejected the recommendation, arguing that because so many Americans are racist, even extreme racism in this country is normative—a cultural problem rather than an indication of psychopathology."
The issue here is that we know most racism is learnt behaviour developed in part in the current age to legitimate 'white' genocide and continuing control of much of the planet - or reactions against this. Racism therefore is a cultural phenomenon and even extreme racism references this. People like Jane Elliott have proven that such prejudices are learned and need to be unlearned and treated as cultural phenomenon. Treating them pathologically is merely offering an excuse and therefore not treating them at all in this case.
"To continue perceiving extreme racism as normative and not pathologic is to lend it legitimacy. Clearly, anyone who scapegoats a whole group of people and seeks to eliminate them to resolve his or her internal conflicts meets criteria for a delusional disorder, a major psychiatric illness."
I'm not certain I agree with the opening premise of the above quote. Doesn't treating any form of prejudice as mental illness effectively ignore input of cultural factors into the issue and put the treatment of it into the 'too hard basket'? On the other hand singling out extreme racism as mental illness may highlight the unacceptability of such traits to others who support such ideas. Something I have noted in my long observation of racism is that whilst people can be extremely racist, they rarely like to be identified as such, and often point to instances of more extreme racism such as those involving violence to highlight how their views are not racist. Isn't treating extreme racism, and only extreme racism (where on Earth does the dividing line go?), as pathological contributing to the ability of institutionalized racism to absolve itself by scapegoating such extremes?
Part of the 'benefit' of classifying such racism as mental illness here appears to be the ability to flag individuals who are capable of extreme violence, massacres and the like in the hope of preventing such outcomes. I don't disagree. It would probably aid in identifying potential victims and purportrators alike. But where is the option for treatment? The magic bullet, "the little white pill"? My skepticism for the medicalisation of behavioural problems, and over medicating of people generally, and the mentally ill in particular leads me to cringe at the very suggestion of this as a possible answer. (I do get that Kanien is playing Devil's Advocate here!) Also, as examples of holocausts, past and ongoing throughout the world would indicate, even the most extreme mental illnesses can be coopted, ignored and 'normalised' by racist agendas and most times the most racist agendas can be accepted a 'normal' according to what the majority of people, or powerful people, support.
Here are some references on pathologising racism, and also homophobia and paedophilia:
http://majorityrights.com/index.php/weblog/comments/psychiatrists_debate_pathologogizing_racism_depathologizing_pedophilia/
http://www.newnation.vg/forums/archive/index.php/t-26205.html
Forum responses to these articles seem have dragged into the debate questions of liberalism vs conservatism (Are we surprised?):
http://turnabout.ath.cx:8000/node/77#comment-7155
What it does make me consider in this era of hyperdiagnosis - where every behavioural 'abnormality' seems to need to be explained and neatly boxed in by, one disorder / condition / illness etc or another, is where human responsibility ends and mental incapacity really begins? Clearly there is a cultural component in most, if not all, cases or the racist patterns expressed wouldn't so clearly follow long established racist discourse, or reactions against this, as they do.
I also wanted to draw your attention to Rob Schmidt's discussion of this article here:
http://www.bluecorncomics.com/2010/02/extreme-racism-mental-illness.htm
RE Lemon's answer: I agree whole heartedly with Lemon's assessment of FEAR. I have always thought of fear as the core human emotion and the 'root of all evil' so to speak. Greed, for example, is really based on the emotion of FEAR - fear that you won't have enough at a future time, that other people will have power over you etc. Racism is of course largely based on FEAR also - fear of 'the other', fear of the unknown etc. Whilst this has a large psychological component it is largely a cultural learning. If this were not the case most racism would not take the form it does in following 'Social Darwinist' styled categorizations of race, or reactions against this, as dictated by myths of white supremacy propogated during the last milenia.
RE Mama Pijama's Answer: I simply think is brilliant.
NB Following on from what Pamela has said. In thinking about this question I have considered my own racism, and my working my way through and out of it, and the racism of people around me and found that most of it is learned behaviour. When I think of people I know with significant observable mental illnesses I have observed a great variety of behaviours. I have seen some people with serious mental illnesses show no regard to issues of race or ethnicity whatsoever. I have observed individuals of persecuted minorities go into delusional rants against other minorities seemingly to align themselves with the mythologies of dominant culture in it's most extreme form, and I have observed individuals with extreme psychoses advocate strong support and pride for their associations with Aboriginal people on some occassions and then go into extreme racist rants against 'c___s' on others, comment on how much respect they have for African Americans as opposed to many white Americans literally one minute and then say that it would be no big deal if a few stray bullets hit some people of other minority groups the next - seemingly on the basis that what they were saying was impressive in some way. I'm still trying to work out whether the following is an example of the above:
https://answersrip.com/question/index?qid=20100208173313AALTPrU&show=7#profile-info-eb38abe11698b46fde324034db87a709aa
I honestly don't know what to make of this but clearly it is completely incorrect to assume that racism would be seen with all mental illness or that all racism is pathological in nature.