The prevailing interpretations of physics are based on deeply entrenched assumptions, rooted in classical mechanics. Logical implications include: the denial of entropy and irreversible change as fundamental properties of state; the inability to explain random quantum measurements and nonlocality without implausible and empirically unjustified metaphysical implications; and the inability to explain or even define the evolution of complexity. The dissipative conceptual model (DCM) is based on empirically justified assumptions. It generalizes mechanics’ definition of state by acknowledging the contextual relationship between a physical system and its positive-temperature ambient background, and it defines the DCM entropy as a fundamental contextual property of physical states. The irreversible production of entropy establishes the thermodynamic arrow of time and a system’s process of dissipation as fundamental. The DCM defines a system’s utilization by the measurable rate of internal work on its components and as an objective measure of stability for a dissipative process. The spontaneous transition to dissipative processes of higher utilization and stability defines two evolutionary paths. The evolution of life proceeded by both competition for resources and cooperation to evolve and sustain higher functional complexity. The DCM accommodates classical and quantum mechanics and thermodynamics as idealized non-contextual special cases.