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Acknowledgments. <p>Preface.</p> <p><b>1 An Evaluation of Money: A New Perspective.</b></p> <p>Commodity Money.</p> <p>Metallic Money.</p> <p>Dinar and Dirham (D-D).</p> <p>What is (Paper) Money?</p> <p>An Impure Public Good.</p> <p>Quantity Theory of Money and a Country's Balance Sheet.</p> <p>Functions of Money in an Islamic Setting.</p> <p>The General Theory as Monetary Theory.</p> <p>Cooperation in Islam.</p> <p>A Just Voting System.</p> <p>Islamic Foundation of Norms for Cooperation.</p> <p>Equivalence between Functions of and Demand for Money.</p> <p>Notes.</p> <p><b>2 Interest on Money and Its Scope.</b></p> <p>A Brief History of Interest.</p> <p>The Place of Interest in Capitalist Economics.</p> <p>The Place of Labor.</p> <p>Western Justifications for Interest.</p> <p>Time Preference and its Relation to the Rate of Interest.</p> <p>Is Time Preference Positive in all Circumstances?</p> <p>Some Further Thoughts on Interest.</p> <p>Exchange Cost, Seigniorage and Inflation.</p> <p>The Socially Optimal Provision of Money in the Capitalist System.</p> <p>Interest (Riba) in Islam.</p> <p>Notes.</p> <p><b>3 A Legal Perspective on Islamic Finance.</b></p> <p>Capital Theory: A Brief Recapitulation.</p> <p>The Legalities of Money and Capital.</p> <p>Money and Capital Reconsidered.</p> <p>Supply of Money Unidentified.</p> <p>Extended Model.</p> <p>Implications of the Model.</p> <p>Notes.</p> <p><b>4 Interest: Fact and Fiction.</b></p> <p>The Place of Man in the Economic System.</p> <p>The Evils of Interest.</p> <p>Notes.</p> <p><b>5 Islamic Banking versus Conventional Banking.</b></p> <p>The Structure and Functions of Banking.</p> <p>Underlying Conditions for Success in Islamic Finance.</p> <p>The Philosophical Foundations of the Place and the Ultimate Goal of Man.</p> <p>Islamic Modes of Finance.</p> <p>Islamic Bank Structure.</p> <p>Islamic Contracts.</p> <p>New Products.</p> <p>Notes.</p> <p><b>6 The Role of Conventional and Islamic Banks in Investment: Certainty and Risk Conditions.</b></p> <p>Introduction.</p> <p>Investment in a Capitalist Economy.</p> <p>Investment Expenditure: A Function of Interest Rate?</p> <p>Investment in an Islamic Economy.</p> <p>Portfolio Management for Households.</p> <p>Notes.</p> <p><b>7 The Role of Central Banks in Islamic Banking.</b></p> <p>Revising Roles: Learning from Experience.</p> <p>Revisions (Beyond Amendments).</p> <p>The Role of the Central Bank in Islamic Banking.</p> <p>Assertions.</p> <p>Classification of Islamic Modes of Contract.</p> <p>Application of IRR and Zero Cost of Capital.</p> <p>The Transmission Mechanism for Creating Money.</p> <p>Notes.</p> <p>Bibliography.</p> <p>Index.</p>

<b>DR. IRAJ TOUTOUNCHIAN</b> is a Professor of Economics at Az-Zahra University, Tehran, Iran, where he was the Head, Department of Economics and Social Sciences. He is the author of three books and dozens of papers, all of which are on Islamic banking and finance. His last book, <i>Comparative Money and Banking in Capitalistic and Islamic Systems</i>, was named Economic Book of the Year in Iran.<br /> He is currently Chief of Academic Affairs, Bank of Industry and Mine, Tehran, Iran, responsible for implementing Islamic banking. Dr. Toutounchian was formerly the Deputy-Minister for Economics and International Affairs, Ministry of Economic Affairs and Finance and he has also served as a member of the Money and Credit Council, Central Bank of Iran.<br /> Dr. Toutounchian earned his doctorate at Texas A&M University. Prof. Arthur S. DeVany, his Ph.D. dissertation adviser, described Dr. Toutounchian as a superior economic theorist. His dissertation clearly exhibits his ability to do original theory and to bring economic theory to bear upon such complex socio-economic phenomena.<br /> Dr. Toutounchian proves once again, in this book, his ability to produce fascinating and original work.

"In <i>Islamic Money and Banking</i>, Dr. Iraj Toutounchian re-evaluates the principles of liberal capitalism. He shows how the global crises which have emerged from fluctuations in the success of this economic system throughout time could have been avoided if the underlying values of a truly humane economy had been taken into consideration. Rebuilding the framework of Islamic banking as a system which potentially can generate profit and keep national economies running to the good of a global economy, whilst at the same time being based on virtue and benevolence, Toutounchian provides a compelling case for the fundamental need to reconsider the global economy, going back to the fundamentals outlined centuries ago by Francis Hutcheson, Adam Smith and other theorists of liberal capitalism.<br /> <b>—Joseph DiVanna</b>, Author, <i>Understanding Islamic Banking</i> and <i>The Future of Retail Banking</i> <p>"<i>Islamic Money and Banking</i> is the result of many years of serious thinking and continuous thorough research on why the prevailing capitalist economic woes have repeatedly been and will certainly continue to recur. Prof. Iraj Toutounchian has successfully dismantled the decades of confusion between interest for money and profit for capital not based on Islamic injunctions and verdicts but rather on the views expressed by Western economists such as Keynes, Ricardo and John Stuart Mill. He concludes that as long as money is used as a store of value, it will encourage speculative activities that will give birth to interest and its derivatives. The main purpose of this is to completely remove this cancer cell from the capitalist body. The absence of interest will transform banks from monetary institutions of the conventional type to financial institutions of the Islamic type. Money market which are the result of speculation with money will be eliminated and replaced by commodities markets."<br /> <b>—Prof. Datuk Dr. Syed Othman Alhabshi</b>, Chief Academic Officer & Dean of Faculty, Head of Takaful and Wealth Planning Department, The International Centre for Education in Islamic Finance (INCEIF)</p> <p>"Capital theory is the least understood in economics. Treating monetary theory independently of the real sector leads to unpalatable conclusions in capitalism. Prof. Toutounchian has made a serious attempt to explain the role of money and capital in Islamic economics. Money has to undergo a legal process to become capital and earn profit. The legal process changes the nature of money (potential capital) by combining with labor into actual capital. The author uses the principles of institutional economics with positive transactions cost to advance the case of Islamic economics, which can be both internally consistent and welfare-improving. I thoroughly enjoyed reading the book and enriched my own understanding of capital theory from an Islamic perspective. I am confident that the readers will benefit from it as the author tried to provide a comprehensive capital theory from an Islamic perspective."<br /> <b>—Kabir Hassan</b>, Professor, University of New Orleans</p>

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