The first talk therapies with any empirical validation are recent inventions. So are the first (relatively) effective and safe psychiatric drugs.

Mental health services in the "good old days" were shrouded in a thick fog of Freudian bullshit and couldn't do much for really troubled patients besides keep them warehoused and docile. Before that, they didn't really exist at all.

The feeling of a collective mental breakdown has been in the public consciousness since at least WWII. The loss of meaning and religious faith after such large-scale horror and the response in postmodern aesthetics and philosophy, the isolation beneath the surface-level perfection of the new suburbs, the invention of mass market consumerism, the constant threat of nuclear annihilation, struggle and upheaval around gender/sexuality/race, the Kennedy assassination, the Vietnam War and Nixon-era loss of faith in institutions, stagflation, you name it.

I have admittedly not read Stephen Pinker but I have heard him speak. The impression I left with is that the improvements he is discussing are at the macro level. The fact that we now have science based, effective mental health services at all is, in fact, a large improvement over the past.

It is very easy to use statistics to paint whatever picture of the world you want. Steven Pinker highlights aggregate statistics which, intentionally or not, overlooks the negatives, which may sometimes arguably be a direct consequence of the actions that make the "good" statistics possible.

There are many things contributing to declining mental health. The economy is only a not-insignificant part.

I don't normally go for Marxist or populist analyses of the world, and indeed spend a lot of effort arguing against them, but Stephen Pinker made a lot more sense when someone pointed out that he's basically a shill for globalism, or neoliberalism, or whatever your word for "that thing" is. His whole shtick is going, "Everything's fine! Getting better in fact! No need to examine the current system and all the ways it might be flawed, or change it at all!", since that kind of thinking could hurt entrenched interests immensely.

Your characterization better fits someone like Thomas Friedman, not Pinker. Pinker absolutely acknowledges the many problems of the current system and the need to devise solutions to these problems. His argument is that things have, on the whole, been improving, we've solved big problems in the past, and we can solve current problems so long as we hold with Enlightenment and humanist / liberal values and put the effort in. He's arguing against those who want to throw away liberalism and replace it with some form of mystical authoritarianism, whether that be socialist, fascist, or whatever. And there are many such people, who take the benefits brought from liberalism for granted and would throw them all away for some romantic wishful thinking. His argument reminds me of essays written by Albert Camus defending liberalism against fascism during WWII and against the communism that was en vogue in France after the war among Sartre and others that Stalin referred to as his "useful idiots".

By liberalism here, I mean the original (and only sensible) meaning of a system of individual freedom in social, religious, and economic spheres, equality before the law, and democratic representation, not the New Left's utter misappropriation of the term to represent tribal resentment and mob justice.