Postcard from abroad: Nick Miller

Birmingham-born Edward Oxford set up on Constitution Hill and fired two pistols in the direction of the carriage of the pregnant Queen. He missed, or perhaps the guns weren't loaded.

Anyway, Oxford was arrested, tried and found "guilty but insane" after testimony that due to the shape of his head he was a "mental imbecile". He was sent to the State Criminal Lunatic Asylum at Bethlem Hospital, where he showed no sign of mental derangement and instead set about learning a succession of trades and foreign languages.

Eventually he was pardoned and freed, on the condition he permanently emigrate to Australia, where he embraced the inevitable career of the anti-monarchy lunatic: he became a journalist for The Age.

This is just one of the stories, one of many thousands, from Bedlam: Bethlem Royal Hospital, the famous, infamous madhouse, turned asylum, turned mental hospital.

Through four incarnations, from the Middle Ages to now, it has been the bricks and mortar embodiment of the history of mental illness.

A new exhibition at the Wellcome Collection in London is retracing that history.

"The history of the asylum is typically portrayed as the stuff of nightmares," says co-curator Mike Jay. "But we wanted to take a different approach by drawing out the continuities between history and the present.

"Bethlem Hospital, London's great asylum, has witnessed it all. Each [building] was a revolutionary departure from the last but they all followed the same trajectory: founded in the spirit of optimism and humanitarian reform and abandoned amid scandal and failure."

By the 1960s, again, asylums had become a byword for oppression and neglect, Jay says. "We no longer believe that mental ill health can be quarantined from the world yet each of the asylum's incarnations has left its mark."

Bethlem was founded in 1247 as a charity for those called "lunaticke". After the Great Fire of London it relocated in 1676 to a new building, splendid on the outside but gloomy and soon crumbling inside.

It was open for public visits – in an age long before the welfare state it needed to be creative in its search for benefactors – but visitors spread word of the cruelty and horror within: in popular culture it became 'Bedlam'.

In the 19th century it moved to Southwark and became a more 'middle class' institution, an asylum whose inhabitants were considered ill rather than other – but recovery rates stayed low.

Now Bethlem sits in 270 acres of green gardens in suburban Bromley. It still has residential and inpatient units – but the asylum days are long gone, and the modern emphasis is on community care.

Colin Gale is the archivist at Bethlem's in-house museum.

"Almost anything you can say about the history of mental health care has had some kind of reflection in the history of Bethlem, whether for good or for ill," he says.

Bethlem was often conservative, slow to pick up 'new' treatments such as cold baths and [later] lobotomies, he says.

For a long time it stuck to the "bleeding, purging, vomiting" regime, designed around the theory that mental health was a balance of 'humours' in the patient, Gale says.

"But actually the reputation was probably far worse than the reality – though I'm not saying I'd necessarily want to get into a time machine and go back and be a patient."

The hospital doesn't necessarily take pride in its history, he says.

"But we want to remember that history in order to work out where we are – and where we're going to next."