The new concept of lambda calculi with monotone inductive types is introduced byhelp of motivations drawn from Tarski's fixed-point theorem (in preorder theory) andinitial algebras and initial recursive algebras from category theory. They are intendedto serve as formalisms for studying iteration and primitive recursion ongeneral inductively given structures. Special accent is put on the behaviour ofthe rewrite rules motivated by the categorical approach, most notably on thequestion of strong normalization (i.e., the impossibility of an infinitesequence of successive rewrite steps). It is shown that this key propertyhinges on the concrete formulation. The canonical system of monotone inductivetypes, where monotonicity is expressed by a monotonicity witness beinga term expressing monotonicity through its type, enjoys strong normalizationshown by an embedding into the traditional system of non-interleavingpositive inductive types which, however, has to be enriched by the parametricpolymorphism of system F. Restrictions to iteration on monotone inductive typesalready embed into system F alone, hence clearly displaying the differencebetween iteration and primitive recursion with respect to algorithms despitethe fact that, classically, recursion is only a concept derived from iteration.