The Lacanian name for this "regulation of madness" is the symbolization of the real by means of which the formless, "ugly," real is (trans)formed into reality. Contrary to the standard idealist argument which conceives ugliness as the defective mode of beauty, as its distortion, one should assert the ontological primacy of ugliness: it is beauty which is a kind of defense against the Ugly in its repulsive existence or, rather, existence tout court, since, as we shall see, what is ugly is ultimately the brutal fact of existence (of the real) as such . The ugly object is an object which is in the wrong place, which "shouldn't be there." This does not mean simply that the ugly object is no longer ugly the moment that we relocate it to its proper place; the point is rather that an ugly object is "in itself" out of place, on account of the distorted balance between its "representation" (the symbolic features we perceive) and "existence" - ugly, out of place, is the excess of existence over representation. Ugliness is thus a topological category; it designates an object which is in a way "larger than itself," whose existence is larger than its representation. The ontological presupposition of ugliness is therefore a gap between an object and the space it occupies, or - to make the same point in a different way - between the outside (surface) of an object (captured by its representation) and its inside (formless stuff). In the case of beauty, we have a perfect isomorphism in both respects, while in the case of ugliness, the inside of an object somehow is (appears) larger than the outside of its surface-representation (like the uncanny buildings in Kafka's novels which, once we enter them, appear much more voluminous than what they seemed when viewed from the outside).- Slavoj Zizek, "From desire to drive: Why Lacan is not Lacaniano"
Another way to put it is to say that what makes an object "out of place" is that it is too close to me, like the Statue of Liberty in Hitchcock's Foreign Correspondent: seen from the extreme proximity, it loses its dignity and acquires disgusting, obscene features. In courtly love, the figure of die Frau-Welt obeys the same logic: she appears beautiful from the proper distance, but the moment the poet or the knight serving her approaches her too closely (or when she asks him to come close to her so that she can repay him for his faithful service), she turns her other, reverse side to him, and what was previously the semblance of a fascinating beauty, is suddenly revealed as putrefied flesh, crawling with snakes and worms, the disgusting substance of life, as in the films of David Lynch, where an object turns into the disgusting substance of Life as soon as the camera gets too close to it. The gap that separates beauty from ugliness is thus the very gap that separates reality from the Real: the kernel of reality is horror, horror of the Real, and that which constitutes reality is the minimum of idealization which the subject needs in order to be able to sustain the Real. Another way to make the same point is to define ugliness as the excess of stuff which penetrates through the pores in the surface, from science-fiction aliens whose liquid materiality overwhelms their surfaces (see the evil alien in Terminator 2 or, of course, the alien from Alien itself), to the films of David Lynch (especially Dune), in which the raw flesh beneath the surface constantly threatens to emerge on the surface. In our standard phenomenological attitude towards the body of another person, we conceive the surface (of a face, for example) as directly expressing the "soul" - we suspend the knowledge of what actually exists beneath the skin surface (glands, flesh...). The shock of ugliness occurs when the surface is actually cut, opened up, so that the direct insight into the actual depth of the skinless flesh dispels the spiritual, immaterial, pseudo-depth.
In the case of beauty, the outside of a thing - its surface - encloses and overcoats its interior, whereas in the case of ugliness, this proportionality is perturbed by the excess of the interior stuff which threatens to overwhelm and engulf the subject. This opens up the space for the opposite excess, that of something which is not there and should be, like the missing nose which makes the "phantom of the opera" so ugly. Here, we have the case of a lack which also functions as an excess, the excess of a ghostly, spectral materiality in search of a "proper," "real" body. Ghosts and vampires are shadowy forms in desperate search for the life-substance (blood) in us, actually existing humans. The excess of stuff is thus strictly correlative to the excess of spectral form: Deleuze has already pointed out how the "place without an object" is sustained by an "object lacking its proper place" - it is not possible for the two lacks to cancel each other. What we have here are the two aspects of the real, existence without properties and an object with properties without existence. Suffice it to recall the well-known scene from Terry Gilliam's Brasil, in which the waiter in a high-class restaurant recommends the best offers from the daily menu to his customers ("Today, our tournedos is really special!" etc.), yet, what the customers are given on making their choice is a dazzling color photo of the meal on a stand above the plate, and, on the plate itself, a loathsome excremental paste-like lump: this split between the image of the food and the real of its formless, excremental remainder perfectly exemplifies the two modes of ugliness, the ghost-like substanceless appearance ("representation without existence") and the raw stuff of the real ("existence without appearance").
One should not underestimate the weight of this gap, which separates the "ugly" Real from the fully-formed objects in "reality:" Lacan's fundamental thesis is that a minimum of "idealization," of the interposition of a fantasmatic frame by means of which the subject assumes a distance from the Real, is constitutive of our "sense of reality" - "reality" occurs insofar as it is not (it does not come) "too close." Today, one likes to evoke the manner in which we are - more and more - losing contact with the authentic reality of the external, as well as with our internal nature - say, apropos of milk, we are so accustomed to aseptic, pasteurized milk, that contact with milk directly milked from a cow is unpleasant - this "true milk" necessarily strikes us as too dense, disgusting, undrinkable....
This gap between the bodily depth of the Real and the pseudo-depth of Meaning produced by the Surface, is crucial for any materialist ontology. It is also easy to see the connection with Freud, who defined reality as that which functions as an obstacle to desire: "ugliness" ultimately stands for existence itself, for the resistance of reality on account of which the material reality is never simply an ethereal medium which lends itself effortlessly to our molding. Reality is ugly, it "shouldn't be there" and hinder our desire. However, the situation is more complicated here, since this obstacle to desire is at the same time the site of the unbearable, filthy, excessive pleasure - of jouissance. What shouldn't be there is thus ultimately jouissance itself: the inert stuff is the materialization of jouissance. In short, the key point not to be missed is that in the opposition between desire and the hard reality opposing its realization (bringing pain, unpleasure, preventing us from achieving the balance of pleasure), jouissance is on the side of "hard reality." Jouissance as "real," is that which resists (symbolic integration), it is dense and impenetrable - in this precise sense, jouissance is "beyond the pleasure-principle." Jouissance emerges when the very reality which is the source of unpleasure, of pain, is experienced as a source of traumatic-excessive pleasure. Or, to put it in yet another way: desire is in itself "pure," it endeavors to avoid any "pathological" fixation. The "purity" of desire is guaranteed by the fact that desire resides in the very gap between any positive object of desire and desire itself - the fundamental experience of desire is "ce n'est pas ça," this is not THAT. In clear contrast to it, jouissance (or libido, or drive) is by definition "dirty" and/or ugly, it is always "too close:" desire is absence, while libido-drive is presence.
All this is absolutely crucial for the functioning of ideology in the case of our "everyday" sexism or racism: the problem of both is precisely how to "contain" the threatening inside from "spilling out" and overwhelming us. Are women's periods not the exemplary case of such an ugly inside spilling out? Is the presence of African-Americans not felt as threatening precisely insofar as it is experienced as too massive, too close? Suffice it to recall the racist caricatural cliché of black heads and faces: with eyes bulging out, too-large mouths, as if the outside surface is barely able to contain the inside which is threatening to break through. (In this sense, the racist fantasmatic duality of blacks and whites coincides with the duality of formless stuff and shadowy-spectral-impotent form without stuff.) Is the concern with how to dispose of shit (which, according to Lacan, is one of the crucial features differentiating man from animals) not also a case of how to get rid of the inside which emerges out? The ultimate problem in intersubjectivity is precisely the extent to which we are ready to accept the other, our (sexual) partner, in the real of his or her existence - do we still love him when she or he defecates, makes unpleasant sounds? (Think of the incredible extent to which James Joyce was ready to accept his wife Nora in the "ugly" jouissance of her existence.) The problem, of course, is that, in a sense, life itself is "ugly:" if we truly want to get rid of the ugliness, we are sooner or later forced to adopt the attitude of a cathar for whom terrestrial life itself is a hell, and God - who created this world - is Satan himself, the Master of the World. So, in order to survive, we do need a minimum of the real - in a contained, gentrified condition.
The Lacanian proof of the Other's existence lies in the jouissance of the Other (in contrast to Christianity, for example, where Love provides this proof). In order to render this notion palpable, suffice it to imagine an intersubjective encounter: when do I effectively encounter the Other "beyond the wall of language," in the real of his or her being? Not when I am able to describe her, not even when I learn her values, dreams, etc., but, only when I encounter the Other in her moment of jouissance: when I discern in her a tiny detail - a compulsive gesture, an excessive facial expression, a tic - which signals the intensity of the real of jouissance. This encounter of the real is always traumatic, there is something at least minimally obscene about it. I cannot simply integrate it into my universe; there is always a gap separating me from it. This, then, is what "intersubjectivity" is actually about, not the Habermasian "ideal speech situation" of a multitude of academics smoking pipes at a round table and arguing about some point by means of undistorted communication: without the element of the real of jouissance, for here the Other ultimately remains a fiction, a purely symbolic subject of strategic reasoning, as exemplified in the "rational choice theory." For that reason, one is even tempted to replace the term "multiculturalism" with "multiracism:" multiculturalism suspends the traumatic kernel of the Other, reducing it to an asepticized, folklorist entity. What we are dealing with here is - in Lacanese - the distance between S and a, between the symbolic features and the unfathomable surplus, the "indivisible remainder" of the real; at a somewhat different level, Walter Benn Michaels made the same point in claiming that:"The accounts of cultural identity that do any cultural work require a racial component. For insofar as our culture remains nothing more than what we do and believe, it is impotently descriptive.... It is only if we think that our culture is not whatever beliefs and practices we actually happen to have but is instead the beliefs and practices that should properly go with the sort of people we happen to be, that the fact of something belonging to our culture can count as a reason for doing it. But to think this is to appeal to something that must be beyond culture and that cannot be derived from culture precisely because our sense of which culture is properly ours must be derived from it. This has been the function of race.... Our sense of culture is characteristically meant to displace race, but ... culture has turned out to be a way of continuing rather than repudiating racial thought. It is only the appeal to race that makes culture an object of affect and that gives notions like losing our culture, preserving it, stealing someone else's culture, restoring people's culture to them, and so on, their pathos.... Race transforms people who learn to do what we do into the thieves of our culture and people who teach us to do what they do into the destroyers of our culture; it makes assimilation into a kind of betrayal and the refusal to assimilate into a form of heroism" .The historicist/culturalist account of ethnic identity, insofar as it functions as performatively binding for the group accounted for and not merely as a distanced ethnological description, thus has to involve "something more," some trans-cultural "kernel of the real." (The postmodern multiculturalist only displaces this pathos onto the allegedly more "authentic" Other: Stars and Stripes give him no thrill; what does give him a thrill is listening to some ritual of native Americans, of African-Americans.... What we are dealing with here is clearly the inverted form of racism.) Without this kernel, we remain caught in the vicious cycle of the symbolic performativity which, in an "idealistic" way, retroactively grounds itself. It is Lacan who - in a Hegelian way - enables us to resolve this deadlock: the kernel of the real is the retroactive product, the "fall-out," of the very process of symbolization. The "Real" is the unfathomable remainder of the ethnic substance whose predicates are the different cultural features which constitute our identity; in this precise sense, race relates to culture like real relates to symbolic. The "Real" is the unfathomable X which is at stake in our cultural struggles; it is that on account of which, when somebody learns too much of our culture, he "steals" it from us; it is that on account of which, when somebody shifts allegiance to another culture, he "betrays" us; etc. Such experiences prove that there must be some X which is "expressed" in the cultural set of values, attitudes, rituals... which materialize our way of life. What is stolen, betrayed... is always objet petit a, the little piece of the Real.
Jacques Ranciere  gave a poignant expression to the "bad surprise" which awaits today's postmodern ideologues of the "end of politics:" it is as if we are witnessing the ultimate confirmation of Freud's thesis, from Civilization and its Discontents, on how, after every assertion of Eros, Thanatos reasserts itself with a vengeance. At the very moment when, according to the official ideology, we are finally leaving behind "immature" political passions (the regime of the "political:" class struggle and other "outdated" divisive antagonisms) for the post-ideological and "mature" pragmatic universe of rational administration and negotiated consensus, for the universe free of utopian impulses in which the dispassionate administration of social affairs goes hand in hand with aestheticized hedonism (the pluralism of "ways of life"); at this very moment, the foreclosed political is celebrating a triumphant comeback in its most archaic form as a pure, undistilled racist hatred of the Other, which renders the rational tolerant attitude utterly impotent. In this precise sense, the contemporary "postmodern" racism is the symptom of the multiculturalist late capitalism, bringing to light the inherent contradiction of the liberal-democratic ideological project. Liberal "tolerance" condones the folklorist Other which is deprived of its substance (like the multitude of "ethnic cuisine" in a contemporary megalopolis); however, any "real" Other is instantly denounced for its "fundamentalism," since the kernel of Otherness resides in the regulation of its jouissance, i.e. the "real Other" is by definition "patriarchal," "violent," never the Other of ethereal wisdom and charming customs. One is tempted to reactualize the old Marcusean notion of "repressive tolerance" here, reconceiving it as the tolerance of the Other in its asepticized, benign form, which forecloses the dimension of the Real of the Other's jouissance, the excess of this jouissance which, in our everyday racist attitude, appears as the specific feature of the Other which "bothers us." Let me recall a rather personal experience, that of my own mother. Her best friend, as the saying goes, is an old Jewish lady; after some financial transaction with her, my mother said to me: "What a nice lady, but did you notice the strange way she counted the money?" - in my mother's eyes, this feature, the way the Jewish lady handled the money, functioned exactly like the mysterious feature in science-fiction novels and films which enables us to identify aliens who are otherwise indistinguishable from ourselves (a thin layer of transparent skin between the third finger and the little finger, or a strange gleam in the eye...).