Dr. Thomas Szasz, a psychiatrist who says mental illness is a "myth" created by society and the psychiatric profession, yesterday opened a Law School symposium by criticizing the American justice system's growing tendency to treat criminals as if they were mentally ill.

"Both our criminal justice system and social fabric are being undermined by psychiatric diversion," Szasz said.

Szasz spoke before an overflow crowd in Pound Hall at the opening session of the weekend symposium on "Crime and Punishment: Restitution, Retribution and Law."

Szasz said that the courts should not consider insanity to be a legitimate defense in criminal cases. He said "anyone who is sane enough to commit a crime is sane enough to be punished."

Szasz said the terms "insane" and "mentally ill" are arbitrary labels that have no factual basis.

As an example he cited the American belief that assassination attempts against foreign leaders are conducted by highly organized political groups but that attempts on the life of an American president are always the work of a lone madman.

Stanton E. Samenow, a clinical psychologist at Saint Elizabeth's Hospital in Washington, also spoke yesterday at the opening session and discussed research which supports Szasz's views.

Bunch of Fakers

Samenow has studied criminals who are being treated in mental hospitals. He said yesterday that criminals know how psychiatrists expect the mentally ill to behave and are able to put on an act to escape from long prison sentences.

"A therapist is someone you lead by the nose," Samenow said and he called the application of psychiatry to the criminal justice system a "charade."

Lock 'Em Up

Treating criminals in hospitals instead of punishing them is the result of the American society's need to confine disruptive individuals and its reluctance to be responsible for punishment, Szasz said.

He said that both criminals and psychiatrists have an economic interest in seeing that the practice continues