We now come to the underpinning contention of the previous monograph. Psychological phenomena, especially those involved in learning and education, stem from or are related to states of consciousness. Using the argument which relates the information available about conscious processes to the type of experimental situation, we maintain that the basic unit of psychological /educational observation is a conversation. In order to test hypotheses and explicate the conversational transactions, it is necessary to invoke various tools and explanatory constructs. These are coherent enough to count when interlocked as a theory, and this theory was dubbed conversation theory.