docs(example): add layered development concept and extend tutorial

Adds LAYERED-DEVELOPMENT.md documenting the concept for evolving a flat
entity collection into a structured systemic model through four layers:

  L0 Source text → L1 Raw entities (current) → L2 Typed entities
  → L3 Relation graph → L4 Minimal systemic model

Covers: the element/relation/principle/institution type taxonomy,
VSM as a structural coordinate system, the type × VSM coverage matrix,
triplet extraction with a controlled predicate vocabulary, feedback loop
detection, and the distillation hypothesis for finding the generative
core of a corpus.

Extends TUTORIAL.md with sections 17–23:
  17. Observing entity heterogeneity
  18. The four-layer model overview
  19. Layer 2 — classifying entities (schema, pipeline stage, metrics)
  20. Layer 3 — extracting the relation graph (triplets, feedback loops)
  21. Layer 4 — the minimal systemic model (core-model.md output)
  22. Planned CLI commands for layers 2–4
  23. Layers 2–4 as composed infospaces

Co-Authored-By: Claude Sonnet 4.6 <noreply@anthropic.com>

examples/infospace-with-history/LAYERED-DEVELOPMENT.md

@@ -0,0 +1,409 @@
+# Layered Infospace Development
+
+A concept for evolving a flat entity collection into a structured systemic model.
+
+---
+
+## The Problem
+
+After processing all 35 chapters of *The Wealth of Nations*, the infospace
+contains ~988 entities. But reviewing them reveals a structural problem: they
+are not all the same kind of thing.
+
+Some are **stocks** — things that exist or persist:
+- *Capital Stock*, *Colony Assemblies*, *Corn*, *Plate (Household Silver)*
+
+Some are **processes** — things that happen or transform:
+- *Bank Credit Extension*, *Agricultural Market Integration*, *Division of Labour*
+
+Some are **principles** — abstract laws or invariants:
+- *Agricultural Opportunity Cost*, *National Animosity in Commerce*
+
+Some are **sequences** — ordered chains of events:
+- *Agricultural Market Access Development Sequence*
+
+When you apply the VSM mapping uniformly to this mixture, the result is
+conceptually muddled. System 2 (coordination) ends up containing both a
+*price signal* (a relation between operations) and a *market* (an element
+those relations flow through). The mapping is not wrong — both genuinely
+belong in S2 — but the lack of type distinction hides structural information.
+
+The goal of layered development is to move from a flat collection of named
+phenomena toward a **minimal viable systemic model**: the smallest set of
+elements and relations that can generate Smith's argument from first
+principles.
+
+---
+
+## The Ontological Distinction
+
+The most important distinction is between **elements** and **relations**:
+
+- An **element** is a thing that can exist independently: a stock, an agent,
+  an institution, a good. It is a *noun* in the grammar of the model.
+- A **relation** is a structural dependency between elements: a mechanism,
+  a causal link, a regulatory signal. It is a *verb* or *connector* in the
+  grammar of the model.
+
+This distinction is prior to the VSM assignment. Once you know whether
+something is an element or a relation, the VSM question becomes:
+*which control layer does this element inhabit?* or
+*which control signal does this relation carry?*
+
+---
+
+## Five Entity Types
+
+A complete taxonomy for the WoN infospace:
+
+| Type | Definition | WoN examples |
+|---|---|---|
+| **Element** | A stock, agent, artifact, or institution that persists | Capital Stock, Corn, Colony, Guild |
+| **Process** | A flow, activity, or transformation (has duration) | Division of Labour, Credit Extension, Trade Route |
+| **Relation** | A structural dependency between two elements | Rent determined by price; Wages bounded by profit margin |
+| **Principle** | An abstract law or invariant that holds across contexts | Opportunity Cost, Comparative Advantage, Diminishing Returns |
+| **Institution** | A socially constructed rule system or norm | Banking system, Taille, Apprenticeship Law |
+
+These types are not mutually exclusive at the margin — *Market Price* is
+both a Relation (between cost components and clearing condition) and an
+emergent Property of an Element (the market). The choice of primary type
+should reflect its role in the argument being made.
+
+---
+
+## The VSM as Structural Lens
+
+The Viable System Model provides a *recursive control hierarchy*. Applied to
+the WoN, each VSM level corresponds to a layer of economic governance:
+
+| VSM System | Economic function | What belongs here |
+|---|---|---|
+| **S1 — Operations** | Primary productive activities | Agricultural labour, manufacturing, carrying trade |
+| **S2 — Coordination** | Anti-oscillation, price signals | Market price, natural price, wages of labour |
+| **S3 — Management** | Resource allocation, operational control | Capital allocation, banking, taxation |
+| **S3\* — Audit** | Inspection, compliance, integrity | Customs enforcement, assay, coinage |
+| **S4 — Intelligence** | Adaptation, environment scanning | Invisible hand, mercantile intelligence, foreign trade |
+| **S5 — Policy** | Identity, ultimate authority, purpose | Political economy systems, public debt policy |
+
+Every typed entity gets a *coordinate* in the space of type × VSM system.
+For example:
+
+- *Natural Price* → **Relation / S2** (it is the coordination signal that
+  expresses the dependency between cost components and market clearing)
+- *Capital Stock* → **Element / S1** (it is the persistent productive resource
+  at the operational level)
+- *Invisible Hand* → **Principle / S4** (it is an abstract law describing
+  how distributed intelligence produces systemic order)
+- *Banking System* → **Institution / S3** (it is the socially constructed
+  rule system for managing capital flows)
+
+---
+
+## The Four-Layer Model
+
+```
+L0  Source text          35 chapters — raw signal, no structure
+     │
+     │  extract-entities (existing pipeline stage)
+     ▼
+L1  Raw entities         ~988 named phenomena — heterogeneous, flat
+     │                   [current state]
+     │  classify-entities (new stage)
+     ▼
+L2  Typed entities       Each entity assigned: type + VSM system
+                         Coordinate: (Element | Process | Relation |
+                          Principle | Institution) × (S1–S5)
+     │
+     │  extract-relations (new stage)
+     ▼
+L3  Relation graph       Explicit triplets: Element → Relation → Element
+                         Feedback loops, VSM channel mappings,
+                         causal chains
+     │
+     │  distil-core (new analysis)
+     ▼
+L4  Systemic model       Minimal viable set — the generative core
+                         ~30 elements + ~20 relations + ~10 principles
+                         that reproduce Smith's argument from scratch
+```
+
+Each layer is a **proper infospace** in its own right. L2 uses L1 as its
+topic and VSM as its discipline. L3 uses L2 as its topic. The infospace
+composition model (already built) makes this explicit, auditable, and
+reproducible — each layer has its own `infospace.yaml`, schemas, and metrics.
+
+---
+
+## Layer 2 — Typed Entities
+
+### What changes
+
+Each entity file gains two new fields:
+
+```markdown
+## Entity Type
+
+Relation
+
+## VSM System
+
+S2
+```
+
+The classification is produced by a new `classify-entities` pipeline stage
+that runs as a per-entity LLM evaluation — a concise prompt per file asking
+the model to assign type and VSM system and briefly justify both.
+
+### New schema: `schemas/typed-entity-schema-v1.0.md`
+
+Extends the economic entity schema with:
+- **Entity Type** — one of: Element, Process, Relation, Principle, Institution
+- **VSM System** — one of: S1, S2, S3, S3*, S4, S5
+- **Type Rationale** — one sentence explaining why this type was assigned
+- **VSM Rationale** — one sentence grounding the VSM assignment in Beer's definitions
+
+### Metrics at Layer 2
+
+Layer 2 enables a new set of quality checks:
+
+| Metric | Concern | Question |
+|---|---|---|
+| **type_distribution** | Granularity | Is the collection balanced between elements, processes, and relations? |
+| **vsm_type_coverage** | Coverage | Does every VSM level have at least one element, one process, and one relation? |
+| **orphan_relations** | Coherence | Are there Relation-typed entities that name no elements they connect? |
+| **principle_grounding** | Consistency | Does each Principle-typed entity have at least one Element or Process it constrains? |
+
+The coverage metric gains a new dimension: instead of domain × chapter,
+it becomes type × VSM system — a 5 × 5 or 5 × 6 matrix that reveals
+structural blind spots.
+
+---
+
+## Layer 3 — The Relation Graph
+
+### Triplets
+
+The core artifact of Layer 3 is a set of **explicit triplets**:
+
+```
+Division of Labour   ──[limited by]──>   Market Extent
+Market Extent        ──[expanded by]──>  Transportation Infrastructure
+Capital Stock        ──[enables]──>      Division of Labour
+Wages of Labour      ──[regulated by]──> Profit of Stock
+Natural Price        ──[centres on]──>   Market Price
+```
+
+Each triplet is a directed edge in the relation graph. The three roles are:
+- **Subject**: an Element-typed entity
+- **Predicate**: a Relation-typed entity (or one from the controlled vocabulary)
+- **Object**: an Element-typed entity
+
+### Controlled relation vocabulary
+
+A small vocabulary constrains what predicates are available:
+
+| Predicate class | VSM channel | Direction |
+|---|---|---|
+| **enables / constrains** | S1 → S1 | structural prerequisite |
+| **regulates / is regulated by** | S3 → S1 or S2 → S1 | control signal |
+| **produces / consumes** | S1 operational | flow |
+| **coordinates** | S2 | anti-oscillation signal |
+| **monitors / audits** | S3\* | audit loop |
+| **adapts to / anticipates** | S4 | intelligence signal |
+| **defines / is defined by** | S5 | policy authority |
+| **contradicts / tensions with** | any | principle conflict |
+
+### Feedback loops
+
+The relation graph makes feedback loops visible as cycles. Smith describes
+many:
+
+```
+Capital Accumulation
+  ──[enables]──> Division of Labour
+  ──[increases]──> Labour Productivity
+  ──[raises]──> Profit Margin
+  ──[funds]──> Capital Accumulation   [positive loop]
+
+Wages of Labour
+  ──[raises]──> Consumer Demand
+  ──[stimulates]──> Production
+  ──[increases]──> Employment
+  ──[raises]──> Wages of Labour       [positive loop]
+
+Market Price
+  ──[above]──> Natural Price
+  ──[attracts]──> Capital Inflow
+  ──[increases]──> Supply
+  ──[depresses]──> Market Price       [negative/balancing loop]
+```
+
+These loops are the VSM S2 coordination signals made explicit. Finding them
+is a primary goal of Layer 3.
+
+### New output: `output/relations/`
+
+One markdown file per triplet (or per relation cluster):
+
+```markdown
+# Division of Labour — limited by — Market Extent
+
+## Subject
+Division of Labour
+
+## Predicate
+limited by
+
+## Object
+Market Extent
+
+## Relation Type
+constrains
+
+## VSM Channel
+S1 → S2 (operational capacity constrained by coordination reach)
+
+## Evidence
+Book I, Chapter 3: "The division of labour is limited by the extent of
+the market."
+
+## Feedback Role
+Part of the Market Expansion loop: larger market → more specialisation
+→ higher productivity → greater surplus → expanded trade → larger market.
+```
+
+---
+
+## Layer 4 — The Minimal Systemic Model
+
+### The distillation hypothesis
+
+The entire WoN argument can be reproduced from a **core set** of roughly
+30–40 elements, 15–25 relations, and 8–12 principles. Everything else in
+the 988-entity collection is either:
+
+- a **refinement** — a special case of a core element (e.g., *Agricultural
+  Capital* is a refinement of *Capital Stock*)
+- an **illustration** — a concrete historical example (e.g., *Taille* is an
+  illustration of *Distortionary Taxation*)
+- a **historical context** — not part of the abstract theory (e.g.,
+  *Portuguese Gold Trade*)
+
+### How to find the core
+
+Two methods work together:
+
+**FCA-based centrality**: The concept lattice already computed by the FCA
+module identifies which entities participate in the most attribute–object
+pairings. High-density concepts in the lattice are likely core elements.
+In Layer 3 terms: entities with the highest in-degree + out-degree in the
+relation graph are candidates for the core.
+
+**VSM completeness check**: A viable economic system requires all five VSM
+systems to be represented in the core. If any system is empty, the model
+is not viable — it is missing a control loop. This is the stopping condition:
+*distil until the minimal set is VSM-complete and answers all competency
+questions.*
+
+### The core model as infospace output
+
+The final artifact is `output/core-model.md`:
+
+```markdown
+# Core Systemic Model — The Wealth of Nations
+
+## Elements (S1 — Operations)
+- Labour
+- Capital Stock
+- Land
+- Commodity
+
+## Processes (S1 — Operations)
+- Division of Labour
+- Agricultural Production
+- Manufacturing
+- Trade
+
+## Relations (S2 — Coordination)
+- Natural Price (centres market price)
+- Wages of Labour (allocates labour supply)
+- Profit of Stock (allocates capital)
+- Rent of Land (allocates land use)
+
+## Control Mechanisms (S3 — Management)
+- Capital Allocation
+- Banking (credit extension)
+- Taxation
+
+## Intelligence Principles (S4)
+- Invisible Hand (distributed coordination)
+- Comparative Advantage (specialisation signal)
+
+## Policy Framework (S5)
+- Mercantile System (policy thesis, critiqued)
+- System of Natural Liberty (normative alternative)
+
+## Core Feedback Loops
+1. Capital Accumulation → Division of Labour → Productivity → Profit → Accumulation
+2. Market Price → Capital Inflow → Supply → Market Price (balancing)
+3. Wages → Demand → Employment → Wages (positive reinforcement)
+
+## Viability Assessment
+VSM coverage: S1 ✓  S2 ✓  S3 ✓  S4 ✓  S5 ✓
+Competency questions answered: 6/6
+```
+
+---
+
+## Infospace Composition as the Mechanism
+
+The layering is not merely conceptual — it maps directly to the infospace
+composition model already built in markitect. Each layer is a separate
+infospace that uses the previous layer as its discipline:
+
+```
+L1 infospace (raw entities)
+  topic:      Wealth of Nations source chapters
+  discipline: VSM reference
+  output:     ~988 entity files
+
+L2 infospace (typed entities)
+  topic:      L1 entity files          ← L1 as topic
+  discipline: VSM reference
+  output:     ~988 typed entity files
+
+L3 infospace (relation graph)
+  topic:      L2 typed entity files    ← L2 as topic
+  discipline: L2 infospace             ← L2 as discipline
+  output:     ~200–500 relation triplet files
+
+L4 infospace (core model)
+  topic:      L3 relation graph        ← L3 as topic
+  discipline: L3 infospace             ← L3 as discipline
+  output:     core-model.md
+```
+
+This makes every distillation decision auditable. A change in L2 (a
+reclassification from Element to Process) propagates as a flag on dependent
+L3 relations, which in turn flags the L4 core model for re-evaluation.
+
+---
+
+## Design Principles
+
+**Distillation, not accumulation**: The layers run downward toward a minimal
+core, not upward toward a larger taxonomy. Layer 4 is smaller than Layer 1.
+
+**Viability as criterion**: The minimal model is judged not by completeness
+(does it contain all entities?) but by viability (can it sustain itself as
+a system? does it answer the competency questions?). This is the VSM
+criterion applied to the model itself.
+
+**Separation of concerns**: Each layer is independently queryable. L2
+answers "what kind of thing is Capital?" — L3 answers "what does Capital
+connect to?" — L4 answers "is Capital in the core?" These questions must
+not bleed into each other.
+
+**Git-traceable**: Every classification decision at L2, every relation
+extraction at L3, and every inclusion/exclusion at L4 is a git commit. The
+intellectual history of the distillation is preserved.

examples/infospace-with-history/TUTORIAL.md

@@ -674,3 +674,445 @@ To build your own infospace:
 The key insight is that **schemas and guidelines are artifacts** — they
 live in the repository and can be versioned and diffed just like code.
 Every refinement decision is traceable through git history.
+
+---
+
+## 17. Observing Entity Heterogeneity
+
+After processing all 35 chapters you will notice that the entity collection
+is not homogeneous. Reviewing the files, some entities describe **things
+that exist** (stocks, agents, institutions) while others describe **how
+things connect** (mechanisms, signals, causal dependencies):
+
+| Entity | Character |
+|---|---|
+| *Capital Stock* | A persistent resource — an element |
+| *Division of Labour* | An ongoing activity — a process |
+| *Natural Price* | A structural dependency — a relation |
+| *Opportunity Cost* | An abstract invariant — a principle |
+| *Banking System* | A socially constructed rule — an institution |
+
+This heterogeneity is not a flaw in the extraction. It reflects the actual
+structure of Smith's argument. But treating all entities identically — as
+unnamed nodes in a flat collection — hides structural information that is
+necessary for building a systemic model.
+
+The VSM mapping compounds this: System 2 ends up containing both a *price
+signal* (a relation) and a *market* (an element that hosts those signals).
+Both are genuinely in S2, but conflating them makes it harder to answer the
+competency questions precisely.
+
+**The solution is layered development**: moving from the flat entity set
+toward a typed, structured, minimal systemic model. The full concept and
+rationale is documented in [`LAYERED-DEVELOPMENT.md`](LAYERED-DEVELOPMENT.md).
+
+---
+
+## 18. The Four Layers
+
+Infospace development proceeds through four layers, each with its own
+pipeline, schema, and viability check:
+
+```
+L0  Source text (35 chapters)
+     │  extract-entities
+     ▼
+L1  Raw entities (~988)          ← current state after full processing
+     │  classify-entities
+     ▼
+L2  Typed entities               Each entity has: type × VSM coordinate
+     │  extract-relations
+     ▼
+L3  Relation graph               Explicit triplets: Element → Relation → Element
+     │  distil-core
+     ▼
+L4  Systemic model               Minimal viable set (~30 elements + 20 relations)
+```
+
+Each layer is a **proper infospace** that uses the previous layer as its
+topic (and sometimes as its discipline). The composition model already
+built into MarkiTect makes this explicit and auditable.
+
+---
+
+## 19. Layer 2 — Classifying Entities
+
+The goal of Layer 2 is to assign every entity a **type** and confirm or
+refine its **VSM system assignment**, giving each entity a coordinate in a
+structured space.
+
+### Entity types
+
+| Type | What it is | Examples |
+|---|---|---|
+| **Element** | A stock, agent, or artifact that persists | Capital Stock, Corn, Colony |
+| **Process** | A flow or transformation (has duration) | Division of Labour, Trade, Credit Extension |
+| **Relation** | A structural dependency between elements | Natural Price, Wages of Labour |
+| **Principle** | An abstract law holding across contexts | Comparative Advantage, Opportunity Cost |
+| **Institution** | A socially constructed rule system | Banking System, Guild, Taille |
+
+### New schema: `schemas/typed-entity-schema-v1.0.md`
+
+Extend the economic entity schema with two new required sections:
+
+```markdown
+## Entity Type
+
+[Element | Process | Relation | Principle | Institution]
+
+## VSM System
+
+[S1 | S2 | S3 | S3* | S4 | S5]
+```
+
+And two supporting rationale fields (one sentence each):
+
+```markdown
+## Type Rationale
+
+This is a Relation because it expresses a structural dependency between
+Wages and Capital Stock rather than being an entity that exists independently.
+
+## VSM Rationale
+
+Assigned to S2 because Natural Price functions as the coordination signal
+that prevents market price oscillation — Beer's primary definition of S2.
+```
+
+### New pipeline stage: `classify-entities`
+
+Add the stage to `infospace.yaml` after the existing pipeline:
+
+```yaml
+pipeline:
+  stages:
+    - name: extract-entities
+      template: templates/extract-entities.md
+      output_dir: output/entities
+      ...
+    - name: map-to-vsm
+      ...
+    - name: synthesize-analysis
+      ...
+    - name: classify-entities
+      template: templates/classify-entities.md
+      output_dir: output/typed-entities
+      output_macro: typed_entity
+      max_tokens: 1200
+      macros:
+        vsm_framework: artifacts/vsm-reference/vsm-framework.md
+        type_taxonomy: artifacts/guidelines/entity-type-taxonomy.md
+```
+
+This stage runs **once per entity** (not per chapter), taking the canonical
+entity file as input and producing an enriched version in `output/typed-entities/`.
+
+### New coverage metric — type × VSM matrix
+
+At Layer 2, the coverage metric gains a new interpretation. The matrix is
+no longer domain × chapter but **type × VSM system** — a 5 × 6 grid:
+
+```
+           S1     S2     S3    S3*    S4     S5
+Element    ████   ████   ██    ·      ██     ██
+Process    ████   ████   ██    ·      ████   ·
+Relation   ████   ████   ████  ██     ██     ██
+Principle  ██     ██     ·     ·      ████   ████
+Institution·      ·      ████  ████   ·      ████
+```
+
+An empty cell in this matrix means the VSM system has no entities of that
+structural type — a genuine explanatory gap.
+
+---
+
+## 20. Layer 3 — Extracting the Relation Graph
+
+The goal of Layer 3 is to make the **connections between entities explicit**.
+Rather than inferring connectivity from embedding similarity or co-occurrence,
+Layer 3 extracts directed, typed **triplets** from entity definitions and
+source chapters.
+
+### Triplet structure
+
+Each triplet is a directed edge in the relation graph:
+
+```
+Subject             Predicate          Object
+──────────────────  ─────────────────  ──────────────────
+Division of Labour  ←limited by→       Market Extent
+Capital Stock       ←enables→          Division of Labour
+Natural Price       ←centres on→       Market Price
+Wages of Labour     ←regulated by→     Profit of Stock
+```
+
+The predicate is drawn from a **controlled vocabulary** of twelve relation
+classes, each mapped to a VSM channel:
+
+| Predicate class | VSM channel |
+|---|---|
+| enables / constrains | S1 structural dependency |
+| regulates / is regulated by | S3→S1 control |
+| coordinates | S2 anti-oscillation |
+| produces / consumes | S1 operational flow |
+| monitors / audits | S3* audit loop |
+| adapts to / anticipates | S4 intelligence |
+| defines / is defined by | S5 policy authority |
+| contradicts / tensions with | cross-level conflict |
+
+### New output directory: `output/relations/`
+
+One file per triplet (or per named relation cluster):
+
+```markdown
+# Division of Labour — limited by — Market Extent
+
+## Subject
+Division of Labour (Process / S1)
+
+## Predicate
+limited by
+
+## Object
+Market Extent (Element / S2)
+
+## VSM Channel
+S1 operational capacity constrained by S2 coordination reach
+
+## Evidence
+Book I, Chapter 3: "The division of labour is limited by the extent
+of the market."
+
+## Feedback Role
+Entry point of the Market Expansion loop.
+```
+
+### Feedback loops
+
+The relation graph will reveal feedback loops — cycles in the directed
+graph. These are the most structurally important outputs of Layer 3 because
+they are the mechanisms Smith describes throughout the WoN:
+
+```
+Capital Accumulation → Division of Labour → Productivity
+  → Profit Margin → Capital Accumulation    [positive reinforcement]
+
+Market Price above Natural Price → Capital Inflow → Supply
+  → Market Price restores                   [balancing loop, S2]
+
+Wages rise → Consumer Demand → Employment
+  → Wages rise                              [positive reinforcement, S1]
+```
+
+Finding and naming these loops is the primary intellectual payoff of
+Layer 3. Each loop can be documented as a named pattern:
+
+```bash
+# Future command:
+markitect infospace loops
+# Detected feedback loops (3):
+#   Capital Accumulation Loop (positive, S1→S3→S1)
+#   Price Equilibration Loop  (balancing, S2)
+#   Labour Market Loop        (positive, S1→S2→S1)
+```
+
+---
+
+## 21. Layer 4 — The Minimal Systemic Model
+
+Layer 4 answers the ultimate question: **what is the smallest set of
+elements and relations that can generate Smith's argument from first
+principles?**
+
+The hypothesis is that the 988-entity collection can be reduced to a core
+of roughly 30–40 elements, 15–25 relations, and 8–12 principles. Everything
+else is a refinement, an illustration, or historical context.
+
+### How the core is identified
+
+Two methods work together:
+
+**Graph centrality**: Entities with the highest combined in-degree and
+out-degree in the Layer 3 relation graph are candidates. An entity that
+many other entities connect to or depend on is structurally load-bearing.
+
+**VSM completeness**: The core must have at least one entity at each VSM
+level, and each level must have at least one Element, one Process, and one
+Relation. This is the stopping condition — the minimum viable set is the
+smallest set that is VSM-complete.
+
+**FCA concept density**: The concept lattice from Layer 1 (FCA already
+computed) identifies which entities co-occur across the most attributes
+(domains and chapters). High-density concepts are likely core entities.
+
+### Output: `output/core-model.md`
+
+The final artifact documents the core model with explicit VSM assignment,
+named feedback loops, and competency question coverage:
+
+```markdown
+# Core Systemic Model — The Wealth of Nations (L4)
+
+## Core Elements
+### S1 — Operations
+- Labour
+- Capital Stock
+- Land
+- Commodity
+
+### S2 — Coordination
+- Market
+
+### S3 — Management
+- Banking System
+
+## Core Processes
+- Division of Labour (S1)
+- Agricultural Production (S1)
+- Trade (S1)
+- Capital Allocation (S3)
+
+## Core Relations
+- Natural Price — centres — Market Price (S2)
+- Wages of Labour — allocates — Labour (S2)
+- Profit of Stock — allocates — Capital (S2)
+
+## Core Principles
+- Invisible Hand (S4)
+- Comparative Advantage (S4)
+- System of Natural Liberty (S5)
+
+## Feedback Loops
+1. Capital Accumulation (positive, S1–S3)
+2. Price Equilibration (balancing, S2)
+3. Labour Market (positive, S1–S2)
+
+## Viability
+VSM coverage: S1 ✓  S2 ✓  S3 ✓  S4 ✓  S5 ✓
+Competency questions answered: 6/6
+Entities in core: 28 / 988 (3%)
+```
+
+### What the core enables
+
+With a validated core model, the infospace becomes far more useful as a
+discipline:
+
+- **Composability**: Another infospace can import the WoN core as its
+  discipline, knowing that only the 28 load-bearing entities will be
+  injected as context — not all 988.
+- **Gap analysis**: New source material can be evaluated against the core:
+  does this modern supply chain text engage with Smith's three core
+  relations? If not, the analysis is incomplete.
+- **Theory comparison**: Two economic theories (Smith and Ricardo, say)
+  can be compared at the core level — do they share elements? Where do
+  their feedback loops diverge?
+
+---
+
+## 22. Running Layers 2–4 (Planned)
+
+The following commands are planned for a future implementation phase.
+They are documented here to describe the intended workflow.
+
+### Layer 2: classify all entities
+
+```bash
+# Classify entity types and confirm VSM assignments:
+markitect infospace classify --provider openrouter
+
+# Classify a single entity:
+markitect infospace classify --entity division-of-labour --provider openrouter
+
+# Review type × VSM coverage matrix:
+markitect infospace check type-coverage
+```
+
+Expected output:
+
+```
+Classifying 988 entities...
+  [████████████████████] 988/988
+
+Type distribution:
+  Element:     312 (32%)
+  Process:     248 (25%)
+  Relation:    201 (20%)
+  Principle:   142 (14%)
+  Institution:  85 (9%)
+
+Type × VSM coverage: 25/30 cells populated
+  Missing: Institution/S1, Principle/S3*, Process/S5
+```
+
+### Layer 3: extract relations
+
+```bash
+# Extract relation triplets (per entity pair or per chapter):
+markitect infospace extract-relations --provider openrouter
+
+# View the relation graph:
+markitect infospace graph --output output/relations/graph.dot
+
+# Detect feedback loops:
+markitect infospace loops
+```
+
+### Layer 4: distil the core
+
+```bash
+# Identify the minimal viable entity set:
+markitect infospace distil --provider openrouter
+
+# Review the core model:
+cat output/core-model.md
+
+# Check VSM completeness of the core:
+markitect infospace viability --layer 4
+```
+
+---
+
+## 23. Layer 2–4 as Composed Infospaces
+
+The cleanest way to implement Layers 2–4 is as **separate infospaces**,
+each using the previous layer as its topic and discipline. This is already
+supported by the MarkiTect composition model.
+
+```bash
+# Layer 2 infospace — using L1 entities as the topic:
+mkdir ../won-typed/
+cd ../won-typed/
+markitect infospace init \
+  --topic "WoN Typed Entities" \
+  --domain "Ontological Classification" \
+  --discipline "Viable System Model"
+
+# Bind the L1 infospace as the source topic:
+markitect infospace bind-discipline ../infospace-with-history
+
+# Layer 3 infospace — using L2 typed entities as the topic:
+mkdir ../won-relations/
+markitect infospace init \
+  --topic "WoN Relation Graph" \
+  --domain "Systemic Modelling"
+
+markitect infospace bind-discipline ../won-typed
+
+# Layer 4 infospace — the core model:
+mkdir ../won-core/
+markitect infospace init \
+  --topic "WoN Core Model" \
+  --domain "Systemic Modelling"
+
+markitect infospace bind-discipline ../won-relations
+```
+
+This structure makes every distillation decision auditable through git
+history. A reclassification in L2 (an entity's type changes from Process
+to Relation) propagates as a flag on dependent L3 triplets, which in turn
+flags the L4 core model for re-evaluation.
+
+The intellectual history of how a theory was extracted from a text, typed,
+connected, and distilled to its minimal core is fully preserved — as a set
+of git commits, each with a human-readable rationale.