Attacks on Stewart Depend on a Cultural Blindness Toward Business Achievement

Attacks on Stewart Depend in a Charlotte's Villa

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Martha Stewart was on to something in the statement she made after her sentencing, when she said that it was "shameful" that "a small personal matter has been...blown out of all proportion." When her daughter Alexis was interviewed on Larry King Live a few months back, she expressed the point a little better. "She's disappointed over feeling like her life was wasted. Everything she did is ignored over something trivial."

This captures the main cultural issue involved in the Martha Stewart case. I don't believe that insider trading ought to be a crime—but most people accept that it is, without really understanding why. All they know is that they have been assured by experts and commentators (of every political persuasion) that insider trading it "not playing by the rules" and is bad, somehow, for the "little guy." And given that context, they have to think that perhaps Martha Stewart did something wrong.

But against that vague sense that she did something wrong, creating some kind of unspecified victim, there is the giant and obvious fact that she has done something right—that she has created an enormous enterprise, generating billions of dollars in wealth by enriching the lives of many millions of people. This is the lack of "proportion" that Martha and Alexis Stewart identify.

What makes this possible, ultimately, is the moral philosophy of altruism—the idea that one man's need, his lack of accomplishment, holds a moral claim over another man's ability. This inversion of morality upholds the undistinguished "little guy" as the sacred standard of the good, because he is undistinguished—and demands, for his sake, the sacrifice of anyone who has worked and struggled to become something more.

One result of the altruist outlook, and a contributing cause to the lack of "proportion" in the Martha Stewart case, is a widespread cultural blindness and ignorance when it comes to the realm of business. Under altruism, since business is a realm of selfish money-making, it is considered a dirty, unsavory activity whose details are best left unexamined by those with delicate moral sensibilities.

About a decade ago, I used to work for a financial publishing company called Morningstar, and one of my bosses there, Don Phillips, made a crusade of lamenting the lack of financial education in the schools. Students routinely graduate from their high-school education, in which they are supposed to gain the skills needed for life, without knowing such basic facts as the difference between a stock and a bond—information they would need in order to become responsible investors and plan for their futures.

This is an observation with many interesting implications. It explains, for example, how people are made ready for the welfare state. Having been starved of the knowledge needed to provide for their own futures, they are encouraged to embody the typical leftist's image of the common man: a helpless member of the lumpen-proletariat who cannot survive without the assistance of the state.

It also explains how easy it is, in today's culture, to vilify businessmen. If the average person has little knowledge of how a business works—of how it is run, what it does, and what is required to run it successfully—then it is easy for the left to smear business leaders as "parasites" who get rich by exploiting the "little guy." How are people to know any better, if they know nothing of the history of great business leaders; if they know nothing of the structure of a corporation; if they know nothing of the innovation, unwavering focus, and long-range thinking necessary to create and maintain a successful enterprise?

The result is that people act as if they can ignore the history and origins of a great American corporation, like Microsoft or Martha Stewart Living Omnimedia, and treat it as if it just bloomed into existence as a fluke. And thus, the effort and virtue needed to create such a business seems, to them, just as vague and substanceless as the claims that insider trading is a terrible crime. The two ideas are equally devoid of substance and thus hold equal weight in people's minds.

The antidote to this problem, on the widest level, is that learning about the business world must become a standard part of a young person's education—as well as a source of dramatic and inspirational stories, both in the popular media and in the realms of literature and drama.

The antidote to this problem, in the narrower context of the Martha Stewart case, is that people need to be made aware of the nature and scope of Martha Stewart's business achievement.

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Martha's "Omnimedia" Integration

The unique essence of Martha Stewart's business achievement is identified in the very name of her company: Martha Stewart Living Omnimedia. It is the unusual word "omnimedia" that should catch your attention. What is remarkable about Martha Stewart's company is its ability to maintain a consistent style, voice, and level of quality across many different media—as well as many different lines of retail merchandise, at varying price levels.

The primary role of a corporation's CEO is integration—making sure all parts of the company are working together to achieve a single, integrated goal. For a company whose business is design and lifestyle advice, this means, first and foremost, having a distinctive style, esthetic, and "voice" (that is, a characteristic style of communicating with her readers and viewers). Martha is often derided for "just creating an appealing image"—as if this is some kind of fraud. In fact, this is her greatest achievement: creating a style and level of quality that is consistent across the vast scope of the Martha Stewart media empire, from one magazine to another, and from magazines, to books, to radio spots, to television shows, to the Internet.

My admiration for Martha Stewart comes in part from the fact that I am also in the publishing business, though on a much more modest scale. I know the sustained effort required to ensure a uniform level of quality, a consistency in message and style, over time and across a variety of products. Martha Stewart does this on an awe-inspiring scale, and it is one of the things that has made her company so successful.

To do this, a company needs one person as the leader and visionary. But one person alone cannot do it. Despite the accusation you may have heard about Martha being a tyrannical employer, all of the evidence suggests the contrary. She could not maintain a consistent style and quality across all of her products without finding, hiring, and motivating many talented employees. Profiles of these employees have been featured more and more regularly in recent issues of Martha Stewart Living, presumably to emphasize that the magazine will continue to maintain its level of quality even while Martha is unable to manage it directly.

The result is that when you pick up a Martha Stewart book or magazine, or tune into one of her shows, or get one of her catalogs in the mail, or see her products in a retail display, you know you will be getting something that lives up to the standards of the "Martha Stewart style."

And that leads to the other main area of Martha Stewart's achievement: her retailing empire.

Martha Stewart is often associated with expensive, "elite" goods. But this is not the actual strategy of her retailing business

Martha typically offers products in three levels of quality: "high end" items made from the best-quality materials, such as her Bernhardt furniture line or her paints from Fine Paints of Europe; a middle range, such as the goods offered in her Martha by Mail catalog, or her Sherwin-Williams paint collection; and her discount-priced "Everyday" lines of paints, linens, furniture, cookware, etc., sold primarily through K-Mart. Yet she does it all without confusing or diminishing the reputation of her brand name—and this is another distinctive feat of integration.

Martha Stewart has maintained the quality of her brand name partly by offering her "high end" goods through only the indisputably best manufacturers. (Look at the Bernhardt collections, if you can find them in a local furniture showroom, and notice the quality of craftsmanship.) But she also does it by making sure that her discount lines are also of good quality. I have never had a high regard for the goods offered at K-Mart. Indeed, the term "blue-light special" is practically synonymous with shoddy quality. Yet I have been amazed by Martha Stewart's Everyday collection, and it has made we want to shop at K-Mart, buying glass storage dishes, a copper-bottomed saute pan, and a variety of other simple household goods. This line offers remarkable quality for a very good price. The goods are inexpensive without being "cheap."

This is the achievement that Martha Stewart's critics refuse to grasp, it is the reason why she has earned her fortune, and it is an achievement that we should all hope will not be destroyed.

For our other articles on Martha Stewart visit www.TIADaily.com/MarthaStewart

Robert Tracinski is the editor and publisher of TIA Daily and the Intellectual Activist.

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