Consignment arrangements function as implicit loans between trading partners.

Evidence

In addition to the sale of goods on credit, the practice of giving goods on consignment (memorandum), which is common in transactions between wholesalers and retailers, is a way of effecting an implicit loan. — Lisa Bernestein, Opting out of the Legal System, 122

Categorization

• DEFINE: Clarifies that consignment/memorandum selling is economically equivalent to a loan, a non-obvious framing.
• SHARE: Worth sending to anyone in wholesale/retail trade who has used ‘sale or return’ without realizing it is in fact credit extended to the buyer.
• XREF: connects to: A continuing relationship functions as a bond deterring dishonest trading; Trust-based obligations function as exchangeable credit within social relationships.; Cheating tempts traders while cooperation yields shared gains. — PAUL R. MILGRO, PAUL R. MILGRO - THE ROLE OF…, 42 (+1 more)

Broader Connections

• Trust-based obligations function as exchangeable credit within social relationships. #expands (0.85)
• A continuing relationship functions as a bond deterring dishonest trading #expands (0.80)
• Currency arrangements can function as wealth-transfer mechanisms between societies. #expands (0.80)
• Cheating tempts traders while cooperation yields shared gains. #exemplifies (0.75) — PAUL R. MILGRO, PAUL R. MILGRO - THE ROLE OF…, 42