Locus Model

Understanding Locus Model

The model’s fundamental premise is a biological analogy: just as human, animal, and plant cells are distinct whole systems built from a common set of functionally defined organelles performing common processes, all economic systems, regardless of industry, scale, or historical period, are presumed to share a common set of functional parts and processes; this premise is drawn from empirical observation of economic actors rather than derived axiomatically, and is offered as a foundation for bottoms-up economic analysis and improved predictive modeling comparable to what systems approaches achieved in biology. A second, complementary analogy runs to the periodic table: both are relational classification systems where a symbol lets speakers refer to an element precisely, and where an element’s location relative to others conveys information about how it will interact within its system. The Locus Model is explicitly more than its language, however — it consistently analyzes and compares Economic Systems by their parts and relationships even absent a constructed vocabulary, with the language serving as the primary vehicle for applying it rather than the model itself. Its reference tables render this structure visually in an Economic System diagram called its “Rosetta Stone,” which depicts the 12-part Activity Cycle as circles, subject resources as squares placed inside the cycle to show their inseparability from it, and inputs/outputs as triangles on a line running through the system, entering at 1.2 and leaving at 3.2. The model’s claim, ultimately, is not that the economy itself changes but that our picture of it does: functional categories emerge bottom-up from the structure of the parts, by rule, rather than being imposed top-down by an analyst before anyone looks at the underlying activity — a bottom-up, rules-based orientation that is the defining methodological contrast with conventional industry classification.

Source: part of the Locus LP patent family; see Patents