Neocortical state variables are defined and evaluated at three levels: microscopic using multiple spike activity (MSA), mesoscopic using local field potentials (LFP) and electrocorticograms (ECoG), and macroscopic using electroencephalograms (EEG) and brain imaging. Transactions between levels occur in all areas of cortex, upwardly by integration (abstraction, generalization) and downwardly by differentiation (speciation). The levels are joined by circular causality: microscopic activity upwardly creates mesoscopic order parameters, which downwardly constrain the microscopic activity that creates them. Integration dominates in sensory cortices. Microscopic activity evoked by receptor input in sensation induces emergence of mesoscopic activity in perception, followed by integration of perceptual activity into macroscopic activity in concept formation. The reverse process dominates in motor cortices, where the macroscopic activity embodying the concepts supports predictions of future states as goals. These macroscopic states are conceived to order mesoscopic activity in patterns that constitute plans for actions to achieve the goals. These planning patterns are conceived to provide frames in which the microscopic activity evolves in trajectories that adapted to the immediate environmental conditions detected by new stimuli. This circular sequence forms the action-perception cycle. Its upward limb is understood through correlation of sensory cortical activity with behavior. Now brain-machine interfaces (BMI) offer a means to understand the downward sequence through correlation of behavior with motor cortical activity, beginning with macroscopic goal states and concluding with recording of microscopic MSA trajectories that operate neuroprostheses. Part 1 develops a hypothesis that describes qualitatively the neurodynamics that supports the action-perception cycle and derivative reflex arc. Part 2 describes episodic, "cinematographic" spatial pattern formation and predicts some properties of the macroscopic and mesoscopic frames by which the embedded trajectories of the microscopic activity of cortical sensorimotor neurons might be organized and controlled.