What is sanity? We all intuitively know what it is, but how can we explain what sanity means? It's a difficult question. As a legal term it simply means having “normal” or “sound” powers of mind. But what does one consider normal and, moreover, who decides it?
It's probably easier to look at the matter “negatively,” to try to explain sanity by giving examples of what it is not, hence to define it as the negation of insanity.
Yet there we run into various operational problems. What I consider sane may be different from your point of view. And it is not just on an individual basis. In fact, our whole society may deem certain acts as insane, while it may be only a question of cultural difference. For example, when I was in Italy I was surprised to run into a person walking on his own and suddenly bursting into loud song. I found it rather odd and a thought immediately crossed my mind: This person must be insane.
But when I looked around to see other people's reaction, I was surprised that nobody paid him any attention, as if it were a normal kind of behavior. And in fact, it must be for them. I suppose in their culture, it is seen as perfectly normal to burst into singing whenever you feel like it. So we can say that what is normal is the “norm” of that particular place. It does come down to traditions and customs and an underlying often implicit set of rules and standards.
If normalcy, or the norm, is defined by society, can we then suppose that society could err? I mean could we consider a case where the other person, the one we have labeled as insane be actually the really sane one and all of us in grave error?
That takes us back to Plato's famous “cave allegory”: People were chained inside a cave and were following flickering shadows on the wall, taking them for reality. Then, one of them managed to escape and found out that there is actually a “real” world outside of the cave! So he returned to tell the others of his overwhelming revolutionary discovery, but to his surprise he was ridiculed, made fun of and declared insane.
Looking at the history of imprisonment and insanity, it is a fact that many people have been put into hospitals and declared insane for reasons such as not believing in God or having different, more liberal ideas about sexuality. It is then quite possible as Fromm states in “The Sane Society” that the error could actually be on society's side. The same way as one person can err at times, a whole society of millions of people could be equally wrong, and the eye-opening event could be caused by somebody we have hastily and blindly labeled as insane.