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date: 19 August 2017

Martin Luther and Economic Life

Summary and Keywords

Martin Luther is often considered, by historians, theologians, and economists alike, to have had no, primitive, or antiquated knowledge on economic matters. New research has suggested the opposite. Luther’s economic insights were deep, sharp, and modern and even carry much relevance for today. The misinterpretation of Luther as a medieval ignoramus shouting helplessly against the forces of emerging capitalism of his day rests on a double misconception. First, it is often assumed that capitalism broke through in the early Luther age (1480–1520s). But at that time, the German economy, which served as a source for inspiration to Luther, contracted: incomes, output and real wages went down after 1500. Moreover, capitalism had been there for centuries when Luther came forth. Secondly, Luther’s dismissal as a contributor to modern economic knowledge also rests on a decisive misconception of what “modern” economic knowledge entails. Only if we define “modern economics” as neoclassical economics, i.e., the post-1940 academic mainstream consensus in the Western world, based on the assumption of perfect competition, fully transparent information, rational actors, and a free-market economy, does Luther’s economic vision appear out of tune. How could Luther have been ignorant of the rise of the new economy when there was no such rise at his time, or “modern” economic knowledge when neither this type of knowledge nor a modern neoclassical vision of the economy existed?

Keywords: Martin Luther, economic life, charity, capitalism, liberalism, neoliberalism, Scholastic economics

Any interpretation of Luther and economic life rests upon a double contingency: the circumstances of time and space in the Luther age, as well as the strictures of discourse imposed by the circumstances contemporaneous to the respective scholar working and writing on Luther. If we accept that there always were in European economic reasoning since the middle ages and until the 20th century two competing economic paradigms, one of which finally gained the upper hand (we may call it the radical-liberal view) at the expense of an older strand (coordinated capitalism) that emphasized the embeddedness of markets in wider contexts of rules, fairness, culture and society, space and time, and that would reject the notion of eternally valid or time-space-indifferent economic principles and “truths” inherent to the neoclassical or neoliberal vision, then we find indeed that Martin Luther

  • - did have a lot to say on economic matters, and

  • - did have an excellent grasp on economics and economic theory of his day.

But he advocated a socially fairer vision of economic life, characterized by principles of charity and the Good Christian Life.

In Luther’s vision, “liberal” meant that people were free of the possibilities of exploitation and rent seeking that exist within some capitalist or “free-market” societies (just consider the sheer suffocating market power enjoyed by big companies and corporations such as Apple or Microsoft), societies where social inequality results from extremely skewed income distribution, corporate bonus payments, and an economy dominated by financial market speculation. These were all elements inherent in modern capitalism, known today as well as in the Luther age, when left to reign supreme and untamed. Luther would not have accepted that.

In this way, Luther can (and should) be called a “liberal” in the best sense of the word, in the tradition of coordinated capitalism, the German Historical School of the 19th century, up to modern visions of Ordoliberalism and Soziale Marktwirtschaft (the post-1945 model of German coordinated capitalism). He advocated free markets in principle, was not at all opposed to private entrepreneurship, and accepted as a given moderate levels of interest on most financial market transactions. He stressed that the state, or some sort of temporal authority, need take care of the market process. The market process should take place within fair and just boundaries, and it would be illusory to believe that the market attains optimum allocation purely by the benevolent forces of the invisible hand, without some rules and oversight by an external authority (the state). Luther’s theory was therefore not outdated nor ignorant nor in any way antiquated. In fact it is timeless, as it still contains a wealth of useful insights even for today. Only in the age of neoliberalism (1973–2007)1 could dismissive assessments of Luther the economic ignoramus gain the upper hand, and such assessments tell us more about our own age than Luther the economic thinker. They also teach us a lesson about the forgetfulness of the past and the way we sometimes tend to misappropriate historical facts creating our own stories and myths (such as the myth of the “free market”).

Medieval Pretexts

Although some would argue that Luther would have been a man of the Middle Ages (which is as nonsensical as the term “Middle Ages” itself), the label “medieval” does not fit Luther particularly well. The medieval mainstream in economic thought was represented by the medieval schoolmen, that is, the very people and ideas Luther ardently opposed: he would have refused, with disdain, to be labeled “Scholastic.” The Scholastic mainstream theologians of his day and age drew, for their inspiration, on the works of Thomas Aquinas and other Church fathers, sometimes going as far back as heathen antiquity (Aristotelian principles of exchange and economy). But Luther sharply abrogated denounced the Scholastic way of philosophy as pernicketiness and “sophistry.”2 Nevertheless, his economic vision built upon, engaged with, and sometimes challenged what had developed, by the 1200s, into a solid body of near-canonized and codified economic knowledge (Scholastic economics), almost in a paradigmatic state, in a way the modern economic sciences have failed to develop as yet.3

Medieval, or Scholastic, economic thought rested, first and foremost, upon the contributions made by Thomas Aquinas, especially the quaestiones 76 and 77 of his magisterial Summa Theologica, second part of part two (thus “2a2a,” as it is often abbreviated in the scholarly literature), in which Aquinas dealt with the problem of price formation in markets and the legitimacy of interest in certain credit and financial market transactions. We find in Aquinas’s work an already quite liberal stance. He advocated free price formation in markets and acknowledged the right of businessmen to strive for some profit, in the way that everybody would be expected to get a reward for their physical striving to carve out a living. The sections on usury in his Summa leave so much room for interpretation as to accommodate nearly any type of financial and credit transaction as legitimate and in accordance with scriptural law. Moreover, secular law and practice had made the charging of interest a legitimate transaction long before. And the near-continuous repetition and reiteration of the canon laws prohibiting usury since the 12th century seem like a good indication that this was actually what happened: the taking of interest would have become the norm in the medieval capitalist economy.4 However, as Aquinas stressed, economic transactions should be guarded by the principle of equity (not equality, as in the communist vision) in trading; gaining everyone their fair share in the deal and their fair place in Christian society and economy according to their rank and status. No one should be overcharged or overruled, or put at unjust advantage in any economic or market transaction, meaning that such an advantage was got on the grounds of some sort of unfairness, asymmetrical information, emergency, situation of dire need (e.g., hunger), or any other powerlessness of the weaker side of the deal, usually the debtor. Such unjust operations—which the modern lingo describes variously as rent seeking, arbitrage, speculation, and usury—and other forms of market distortions still represent, in most of the Western nations’ civil or (where applicable) commercial law codes, incriminatory forms of behavior and are subject, when detected, to court procedures and legal prosecution. The modern market economies of the Western world are, at least on paper, still committed to protect the weaker and unknowing party of any economic deal in the same way as the Thomasian vision of the Scholastic Middle Ages had it. And here Luther would have agreed.

Aquinas also notoriously avoided stating what the “just” price should look like. Here we find perhaps the most interesting aspect of “medieval” economic thought when seen in a modern mirror. We also need to remember this when studying Luther’s vision. In fact none of the medieval schoolmen would ever have dared to quantify the exact formula for the just price. Only a modernist and thus profoundly anachronistic view would identify this as wishy-washy. Everybody who was a true and faithful Christian would simply know what was just and what wasn’t—by heart, that is; being the result of careful and reflexive-introspective examination that should guide each of the individual’s actions, including their economic transactions. Acting on the market invariably meant interacting with others, something which the modern economic sciences, in particular microeconomic price theory, tend to forget: here, price formation usually takes place within totally antiseptic realms guided by assumed rational preferences, marginal utility and the principle of scarcity, and the idea that such conditions can be modeled mathematically for just about any context and type of transaction. The Scholastic model, on the other hand, would have entailed considerations of what was fair and what wasn’t. If you were a true and faithful person you would know exactly what to do and how to do it. To look for a mathematical formula guarding price formation and profits would have looked foolish in the eyes of the schoolmen. Thus, the Spanish theologian Domingo de Soto, a contemporary of Luther, made the point, “if someone asks you how much he can sell for, and you answer ‘What justice dictates,’ you tell him nothing that he did not already know.”5

In fact, the medieval definition of the “just” price left much room for free competitive price formation in competitive markets, similar to modern free-market economies. Bernardino da Siena (1380–1444), one of the leading authorities in the post-Thomasian vision, stated that price formation in markets should be dependent on the three factors virtuositas (a good’s use value), raritas (a good’s relative scarcity), and complacibilitas (a good’s pleasurableness). With this statement he was not so far away from modern microeconomic conceptions of marginal utility, individual preferences, and changes in demand and supply as basic factors influencing price formation within a capitalist market economy. But what made him and the medieval Scholastics—and also Luther, who would, however, not likely acknowledge his Scholastic connections—different was that they always retained a sense of the social and moral embeddedness of any market transaction. Modern research in social and economic anthropology has confirmed that this has remained true, by and large, even for contemporary capitalist market economies in the Western world.6

The Scholastic theologians of the later Middle Ages had no problem with the taking of interest on credit transactions, either, as long as such transactions involved an element of mortgage or hypothecary, that is, the transfer of some tangible immovable or real property. Again, Luther would have been on the same page (see below, “What Can We Learn from Luther? Possibilities for Further Research”). Only the mere lending of cash with the aim of gaining a profit (but without risk) was frowned upon, on paper at least. But an increasingly sophisticated legalistic literature had emerged in the 14th and 15th centuries that had found rock-solid ways of circumventing the canonic usury laws. Strategies included the damnum emergens (the risk involved in lending money to another person) or the lucrum cessans (the foregone profit that would have accrued had the individual lending the money invested in in some other, more profitable process) conditions. By the end of the Middle Ages most credit transactions involving interest would have been considered perfectly legal. Financial markets for rents, annuities, and other obligations had grown prodigiously, not only in the economic hothouse areas of the day, such as the Dutch cities.7 An upper ceiling or capping of interest rates at 5 per cent per annum was emphasized. This marked the boundaries of the financial market and capitalism. But rates in excess of this cap, for instance on certain irredeemable annuities, were not unknown; they could reach 10 per cent per annum or more. In 1540, when Luther’s last sermon on usury appeared, he would even talk of rates around 40 percent per annum.

A great number of medieval “economists” had come from a mercantile, often aristocratic background, in which the handling of money, rational profit calculus, and credit would have represented a normal condition. Medieval monasteries, particularly of the Benedictine order, were run like modern enterprises, following rational management, calculus, and production decisions. Often enough these monastic communities represented the top-notch innovation hothouses of their day, generating, implementing, and communicating useful agrarian and manufacturing knowledge. This explains the intimacy and in-depth knowledge of the schoolmen with practical, everyday matters of currency, coin exchange, credit, and market bargaining which shines through all their writings, up to the days of the great German scholar Gabriel Biel (c. 1415–1495), who wrote a major treatise on money, or the Spanish theologians of the “School” or University of Salamanca around 1500–1550, who discovered, among other things, the quantity theory (which believes that the price level, and even economic activity as such, is dependent upon changes in the monetary supply) and exchange-rate formation.

Moreover, as the increasingly tolerant stance on usury and credit shows, as well as the quite ingenious invention of Purgatory and indulgences—essentially developed as a means of “whitewashing” commercial sins committed by merchants while doing business—the constant reiteration-cum-relaxation of the usury prohibitions seems to suggest that the market had turned into a manifestly characteristic element of contemporary society and economy. The “invention” of the European-type bill of exchange as a means of cashless payment, credit, and transfer of money across different points in time and space, involving elements of currency exchange and credit (and thus interest), demonstrates the increasing level of sophistication, flexibility, and creativity of canon and civil law and its interpretations in coping with a growing market economy. The medieval papacy itself regularly used bills of exchange—essentially a usurious tool—and drew upon the services of the big banking houses of the day for transmitting enormous sums of money due for indulgences, servitia, and other fees from across all areas of Western Christendom to Rome. The popes thus benefited from the very practices they had initially condemned. The papacy had stimulated, wittingly or unwittingly, the development of not only the cashless payment system but also the credit and financial economy or, if you like, modern capitalism.8

This was the situation Luther took issue with in 1517. Indulgences had become, in the Indian summer of the late medieval piety boom of the post-1450 age, almost akin to a marketable commodity which, in the eyes of many, could be used to whitewash just about any sin committed by the individual during their lifetimes. Official church doctrine, of course, never followed this interpretation. But church practice had, by means of the last jubilee indulgence of 1475, moved to a stage where indulgences were considered, by ways of professional advertising, a general-purpose tool for absolution, for both the living and the deceased.

The other “big issue” on Luther’s agenda was the big corporations of his day, above all the super-rich Augsburg Fugger firm and the Welser, Höchstetter, and other family-companies, who dominated 15th- and 16th-century commercial life and society in Augsburg and Nuremberg, the financial capitals of the south and the heart of late medieval and early modern German financial capitalism. The medieval “supercompanies,” headed by the great patriarch-tycoons like Jacob Fugger the elder (1459–1525) and Bartholomew Welser (1484–1561), that had, especially through their investment in Upper German cloth weaving, central European mining, and the emerging global spice trades with India and China, attained an unheard-of social power in the market, were the center of attention in public debates in the 1520s. They would, on the imperial diets of Augsburg and Nuremberg during the 1520s, be publicly and officially accused of having sought (and practically established or gained) what was called “monopoly.” It was only in 1530 that these charges were waived with a stroke of the pen by the emperor Charles V. His election in 1519 had been financed by the hands of the very same supercompanies. During the German Peasant War (1524–1525), the first and last “German Revolution” (P. Blickle), complaints about the unduly large social power and market manipulations of those big companies were heard and issued in print. Martin Luther, in his On Commerce and Usury (“Von Kauffshandlung vnd Wucher,” 1524), devoted an entire section to a detailed description and analysis of such “monopolistic” practices which included, alongside monopoly-like incriminations, other practices directed at gaining unfair advantages in bargaining such as forestalling, arbitrage, futures contracts, and diverse forms of speculation.9

For these reasons, Luther’s treatise remains one of the finest and nearly timeless scholarly analyses of how business should not be conducted, and what the achievement of a true liberal free market economy entailed: the constant fight against people cornering the market at the expense of the common good or common weal (for more on this, see below, “What Can We Learn from Luther? Possibilities for Further Research”). To interpret this genre as merely “business ethics” would be a gross misinterpretation, again falling into the epistemic trap of modern neoliberalism that has done its best to factor ethics and morals out of the economic process and its scientific analysis.10 What Luther formulated was no theory of business ethics, but a proper and general theory for a modern liberal Christian market economy.

Economic Lives in the Luther Age

In order to understand Luther we need context. “Here are two of the most tantalising questions in Western history: How could the Protestant Reformation take off from a tiny town in the middle of Saxony, which contemporaries regarded as a mudhole? How could a man of humble origins who was deeply scared by the devil become a charismatic leader and convince others that the Pope was the living Antichrist?”11 While recent historical research on Luther has tried to address the question in terms of currently fashionable ways, including cultural and praxeological approaches, discourse, habitus, Luther’s stoutness, and so on, strikingly little attention has been paid to the economic context of the age and Luther’s deep embeddedness in the economic questions and practices of his day. In fact, even the most recent biographies and histories of the Reformation12 tend to reiterate an economic scenario of expansion, growth, and the rise of capitalism, while the opposite was true: data on prices, wages, and living standards suggest stagnation or decline in the first three decades of the 16th century.13 In fact, as recent research has suggested, Luther can be best understood against economic decline—not capitalist expansion—in the region in which he was born and would live and die, which had been an economic hothouse but which, during Luther’s ascendancy, experienced an economic slump and contraction. This was the central European mining region of Saxony-Mansfeld, including the Saxon-Bohemian Erz Mountains as well as the argentiferous copper deposits of the Harz and Mansfeld mining deposits. In this region, heavy and capitalistic smelting businesses had been concentrated since the 1440s or earlier. Silver, copper, and other base metals were produced here, in what were the most complex and capital-intensive production processes of their day, requiring sophisticated technology, heavy smelting ovens, and large sums of circulating and investment capital that surpassed the means of all but the richest merchant financiers of the age, as well as huge numbers of dependent workers working in manufactories, smelting huts, and Saiger huts. These last were smelting works, where argentiferous copper was separated into its two components of pure copper and silver. They have survived in the fascinating prints and engravings in Georgius Agricola’s De Re Metallica (1556). These businesses matched nearly all the criteria of the modern factory, bar the aspect that there were no steam engines or mineral energy processes involved (and mechanical implements were, as yet, rather primitive). But although both the silver mining and silver-copper smelting industries of Saxony-Mansfeld, at times producing as much as a quarter or a fifth of global silver output (as yet the South American mines were not relevant for European silver trade and business), had been going through a boom period in the 1470s and 1480s, yielding as much as eighteen or nineteen tons of silver yearly, they went into a decline thereafter. From the 1490s through to the late 1530s, silver production levels in the Tyrol, Mansfeld, and Saxony declined and stagnated, sometimes to levels as low as two tons per year.14

Silver was, at the time, the main monetary material. All major small and middle currencies were based on silver, as were, from the 1480s (and in the Saxon case, 1500), even the high-value full-bodied florin currencies, as more and more states adopted, in lieu of the old Rhinegulden or gold florin, a new silver coin larger and heavier than, but equivalent to, the gold florin. This monetary policy development needs to be seen as the consequence of the huge silver mining boom and the grotesquely swelled amount of monetary material available since the 1470s and 1480s.15 In consequence of the decline in silver production, whole branches of the economy contracted, not only in the immediate surroundings of the silver mines but almost in concentric circles, across wider sectors of economy and society, as shown not least by the decline in the price of grain, the main good bought and sold in contemporary Germany. This suggests that an increasing number of people felt the brunt of declining employment and income. Towns stagnated, and so did urban industries and manufacturing. In his big On Commerce on Usury, Luther complained:

God has cast us Germans off. We have to throw our gold and silver into foreign lands and make the whole world rich while we ourselves remain beggars. England would have less gold if Germany let it keep its cloth; and the king of Portugal, too, would have less if we let him keep his spices. You calculate yourself how much gold is taken out of Germany, without need or reason; from a single Frankfurt fair, and you will wonder how it happens that there is a single heller16 left in German lands. Frankfurt is the gold and silver sink, through which everything that springs and grows, is minted or coined here, flows out of the German lands. If that hole were stopped up we should not now have to listen to the complaints that there are debts everywhere and no money; that all lands and cities are burdened with rent charges and ruined with interest payments. But let that pass. So it will go anyhow. We Germans must be Germans; we never stop unless we must.

In a nutshell, and with the impulsive language characteristic of all his writings, Luther explained the main economic and commercial constellations of his age. They extended as far as contemporary India. Luther was obviously referring here to a time of economic hardship and increased indebtedness related to monetary shortage (in the German original: allenthalben eytel schuld und keyn gellt). Hardship caused interest rates to be increased (ale landth und stedte mit zinsen beschweret und ausgewuchert sind). They convey a remarkably sharp and close insight into the macroeconomic circumstances of his age.17

Of course, we must remember that modern economic reasoning can be applied only with caution (if at all), when used for earlier lives and times, and particularly the profoundly agrarian lives in the Luther age. But in order to better understand what Luther had to say on economic matters we need to remember that he grew up in what was a region slightly different from the norm. In 15th- and 16th-century Germany, the majority of the population lived, worked, and died in the countryside. The majority of economic lives revolved around some form of agricultural activity or production, be that as peasant farmer (sometimes free; often these represented the true “capitalist” farmers and upper echelons of contemporary village society) or someone of the poorer strata of village society, whose numbers had grown especially fast since the 14th and 15th centuries and who would, by the early 1500s, usually represent the majority of the village or rural communities, searching for, and often finding, some manufacturing employment to make ends meet, if poorly. German economic life revolved around the harvest cycle. Luther would later boast (not entirely correctly, though) that he and his family had been of peasant stock. Nonetheless, his father had been a mining entrepreneur of modest yet not inconsiderable means, in what had become, as we have seen, by the time one of Europe’s and the world’s chief sources of silver. In fact, the Mansfeld and Erz Mountain region was one of the more urbanized areas of the age. It contained an overproportionally large number of people who were not dependent upon or involved in agriculture for making a living. In the newly founded Erz Mountain towns such as Annaberg, the nonagrarian population had exploded from a few hundred in the 1470s to close to 40,000 by the end of the 15th century, attracted by the silver mining bonanza of the 1470s and 1480s. Such people would not produce their own food. They needed to be fed and supplied by others. This led to the build-up of an impressive supply network across contemporary Saxony that connected the agrarians surplus areas of the northwest (around Wittenberg) with the more urbanized and functionally specialized mining and manufacturing districts and towns in the Erzgebirge and Mansfeld area southeast and southwest. A relatively high degree of division of labor, specialization, commerce, and trade—basically a high-powered market economy—had emerged here.

This must have left an imprint on young and elder Martin Luther.18 He used mining lingo and analogies drawn from metallurgy and mining techniques in several of his sermons and theological writings.19 He had received basic training in administration and law before converting to a theology degree in 1505, and by his studies in divinity at Erfurt and later Wittenberg he would have acquired a solid knowledge of Scholastic economics as part of the standard curriculum of the academic theologian. In the 1530s, he was repeatedly approached for expert reports on mining business matters, when it came to transfer some of the major Mansfeld smelting huts and Saiger works from private hands into the ownership and management of the Counts of Mansfeld. That is to say, Luther had an excellent grasp of contemporary “economics,” but he was also critical about some of the darker sides of modern capitalism that had shown their ugly face in the process of transformation—from boom to decline in terms of silver output—and in the resulting processes of adjustment and restructuring in what had been, until very recently, one of Europe’s most dynamic economic regions.

Luther the Laissez-faire Economist

In order to understand Luther the economist we need get back to Luther the theologian.20 This also means understanding Luther the human being: the faithful sinner and his religious anthropology. Luther was impulsive, as a private man and a public figure; he never minced his words, but we can be confident that even the rough outbursts of emotion that shine through literally his every writing were calculated, planned, and represented as part and parcel not only of his belief and theology but also as a rhetorical strategy of persuasion (especially important during the age of the early Reformation when his position was all but safe, physically as well as discursively and academically). Luther’s “true” Christians were those who acted spontaneously in their love for their neighbors, in all their faults and virtues, lavishly spreading love for their neighbors (not calculating, for instance according to the Golden Rule) as well as hatred for the Devil, who was lurking around just about every corner. As a theologian he was known to change his mind every so often, something that seems only natural for the curious learned academic that he was; anything else would have meant assuming an unrealistically rigid and dogmatic and uninspired academic figure of mediocre intellectual credibility. His invectives against Jews, Muslims, witches, and sometimes women could be spiteful and vicious. They are painful to the modern ear, but also reflect the inner conflicts of the contemporary Christian, who was, after all, a sinful human being.

Luther’s economic model or theory was essentially derived from, and informed by, three epistemic cornerstones that were, in turn, based upon his “theology.”21 These were (1) the simul iustus et peccator or Righteousness of God doctrine, where righteousness was conveyed to the sinner as a gift from God; (2) the Sola Fide/Sola Scriptura doctrine, which saw no intermediaries between the individual, her salvation, and God; and (3) the Two Swords Doctrine, which kept a strict line of separation between the here and there and the afterlife, between the perfect Christian community in the model and the harsh reality in profanity where lives were, to use a later phrase by 17th-century political philosopher Thomas Hobbes, “nasty, brutish, and short.”

Like almost everything else, Luther’s economic fundamentals may be derived from his famous reformatory revelation:

There I began to understand that the righteousness of God (iustitia Dei) is that by which the righteous lives by the gift of God, namely, by faith. And this is the meaning: the righteousness of God is revealed by the Gospel, namely, the passive righteousness with which a merciful God justifies us by faith, as it is written, “He who through faith is righteous shall live.”

With this—and his Sola Fide/Sola Scriptura—he dealt away with the Catholic church and papacy as intermediary between God and the sinful individual, and with good works and indulgences and other monetary payments common under the old church paradigm as means, largely physical and material, to salvation. This relationship was now to become a direct, immediate one that did not require gold and silver and the payment of worldly treasure for absolution. With one stroke of the pen, Luther abolished the theoretical claims to supporting the authority not only of the pope but also of the complex financial nexus and economic net spun by the curial see across the economies of late medieval Europe by the vivid trade in indulgences, servitia, and other fines, fees, and payments that accrued to the Holy See from all areas of western Christendom, largely on the grounds of extortion. Derived from this was an entirely new program that would in the end, however unintended or undesired, also smooth the way for the rise of modern capitalism.

The other centerpiece was his Two Swords Doctrine. The Devil was everywhere in this world. The Antichrist was a living creature to be reckoned with. And Luther never succumbed to the temptation of believing that every individual, or even a majority, would be the True Christian his ideal or theory of salvation required. For this, the enforcement of both the Reformation and good Christian order in the reformed communities and society, one needed the strong sword of the ruler (who was expected to lead by example). With this, Luther laid important discursive foundations for the modern state, especially the interventionist and welfare state, a state that actively interferes with the subject’s economic lives, covering a wide range of areas, from poor relief, good church sermons, and getting citizens and state denizens to lead a good Christian life, to providing infrastructure for good business, safety, and conduct on roads—important for long-distant trade, business, and commerce. Most of these aspects are still considered crucial areas of intervention for modern states.

Luther was full of contradictions. To him such a statement would have been nonsensical. The world was full of contradictions and opposed principles fighting against each other, not the least marked by the very struggle of his day against the pope and Antichrist. For these reasons Luther would not have generally liked to separate the “spiritual” from the “real” in his analysis. They were different sides of the same coin and intrinsic, even constitutive, components of daily life. They were intertwined. To do good works for one’s neighbor—works of charitable love and lavishness (Mildigkeit), of poor relief, feeding the hungry—were what classified as service to God in a literal sense. They were as spiritually rewarding as the actual church service on Sunday. In the same way, the elevation of manual work as a vocation—a calling by God—needs to be understood. In mere labor or work the true Christian has taken up what God had commanded him to do when laying at its feet the fruits of creation after the fall from grace and the taste of the forbidden fruit in the Garden of Eden. To work with the sweat of one’s brow simply was another form of carrying Genesis further, doing holy service to God. And to the present day, craftsmanship or Handwerk still carries a notion in German life and social discourse that goes far beyond its mere economic implications of getting a job and making some money. German law still requires a high level of formalized training and official accreditation for master craftsmen by the respective local or regional chamber of commerce in all vocational trades for anyone who takes up an independent business in manufacturing. It sometimes still carries a special spirit of vocation and personal fulfilment.22 This elevation of manual work became characteristic of the process of European capitalism in the wake of the Luther age.

On the other hand—and this is only part of a seemingly yet very superficial “contradiction” in Luther’s theology—Luther separated so clearly, even radically, the realm of God and the sword of the prince. In earthly matters, it was the princes and the state that were to have supreme authority, not least in order to create and uphold a true Christian community or society. Luther was also someone who, in his writings on state and economy, sometimes switched between “ideal type” or “model,” in the modern sense, and reality or “hands on” economics. Modern research has often misinterpreted his doctrinal writings on usury as literal, as though they were meant to apply unconditionally in day-to-day life. That would mean falling into the same trap as assuming that modern economic theory (see below, “What Can We Learn from Luther? Possibilities for Further Research”) would be an apt means to accurately describe conditions in the real economy. Rather, in the same way as modern economics has its abstract mythology of general equilibrium, Luther had a strong idealized model of a true or perfect Christian economy. He was never so naïve, however, to believe that what his model of Christian economy prescribed would also serve as an accurate prediction of what would happen in the real economy. Thus it should not surprise us to find him accepting rates of up to 5 percent interest per annum on most credit transactions as entirely legitimate (Letter to the Councilmen of the City of Danzig, 1525), while appearing so conservative as to argue against any sort of interest in principle (as in some sections of On Commerce and Usury, 1524) by arguing that, strictly speaking, Scripture would leave no room for money that would be generated out of itself (the Aristotelian sterility of money doctrine). Thus much of the traditional interpretation by scholars of Luther as a backward or primitive economic thinker results from confusing his “model” of economy with his practical analyses of economic circumstances of his time and age, which were quite sharp and show a surprisingly deep and dense understanding of “micro-” as well as “macroeconomic” circumstances.

In fact, it pays to recall how opposed Luther was to Scholastic philosophy. If God’s creation were something to be explained by reason, as many of the medieval Scholastics would have it, rather than faith and confidence, surely it couldn’t possibly be a creation of God’s but must perforce and by definition be something that had arisen out of profanity. Luther’s interpretation of Scripture and salvation rested upon feeling, intuition, and emotion. Within Luther’s theology of salvation each individual’s actions—peasant, merchant, or any other businessman—should be guided by the principle of Mildigkeit, graciousness and large-handedness. Luther abhorred parsimony and avarice as one of the cardinal sins. He loathed men that would hoard their money, for instance to drive up interest rates and thus gain an unjust leverage above the weaker members of society dependent upon loans. He formulated insights on spending and hoarding, framed within ethical-soteriological boundaries of analysis which were later more rigorously and systematically explored by German Cameralists such as Johann Heinrich Gottlob Justi (1717–1771) or John Maynard Keynes, who has become famous for a theory that emphasized spendthrift and progressive investment as a means of supporting and stimulating the economy and the well-being of the common weal.23

Luther’s views on economy and economic lives corresponded more to a notion we nowadays label as “coordinated capitalism.” He was not at all opposed to the market principle. He wanted markets to be free, but he was also vehemently opposed to capitalism that went over the top and to markets being distorted by people, firms, and individuals holding an unduly high degree of market power and power over others, something that invariably occurred whenever “big business” attained powers of monopoly and other forms of rent seeking that created unfair advantages. In this way he was much nearer to the traditional Scholastic vision of the high and late Middle Ages than he would have been inclined to admit. In a similar way to the modern economic sciences that have become increasingly abstract and formalized, mathematized, and time-space decontextualized, Luther would have advocated a more hands-on approach to economic reasoning. And in the same way that some of the most ardent proponents of modern or neoclassical theory have proven, in the wake of the 1970s and the “neoliberal turn,” to be on the market-radical side, Luther vehemently argued against the market radicals of his age, spearheaded by the Augsburg notary Dr. Conrad Peutinger. Peutinger wrote, in 1530, a series of expert statements and reports that attempted to “prove” that the big spice-importing firms of Augsburg, the Fugger, Welser, and others, were not engaging in what contemporary legal discourse called “monopoly,” and that their hugely powerful position in the global spice trade was not harmful to the common good. In fact, it is in Peutinger’s reports that we find early traces of a later and very common market-liberal discourse that would stress the beneficial nature and consequence of private vices which, when left unfettered, unfolded to the benefit of the entire common weal. The “private vices, public gain” argument would be replicated by the likes of Bernard de Mandeville (Fable of the Bees, 1714) and Adam Smith (An Inquiry into the Nature and Causes of the Wealth of Nations, 1776), and would become the common fare of the neoliberal visions of Atlantic capitalism à la Milton Friedman and other market-radical supply-side economists, up to the age of “Reaganomics.”

In the basic questions of markets, competition, usury, and price formation, Luther was as liberal as liberal could be. This comes across from the following passage from his On Commerce and Usury:

the best and safest way would be for the temporal authorities to appoint over this matter wise and honest men who appraise the cost of all sorts of wares and fix accordingly the target price at which the merchant would get his due share and have an honest living, just as at certain places they fix the price of wine, fish, bread and the like. But we Germans are so busy drinking and dancing that we cannot bear any such regulation. Since, then, we cannot hope for such an institution or edict, the next best thing will be to hold our wares at the price which they fetch in the common market, or which is customary in the neighbourhood. In this matter we can accept the proverb: “Do like others and you are no fool.” Any profit made in this way, I consider honest and well earned, since there is risk of loss in wares and outlay, and the profits cannot be all too great.

No modern market liberal could possibly take issue with this. Perfectly competitive markets need a high degree of regulation, supervision, monitoring, sanctioning, and prosecution of crimes against the common weal, such as arbitrage, rent seeking, and usury. And the best examples of the near-perfect market of our day, such as the New York Stock Exchange (or any of the other stock exchanges of the Western world), are known to be among the most tightly supervised and controlled markets.

Luther also drew a very clear connection between hoarding of money and underconsumption, thus introducing a profoundly economic component into a moral model of the economy. This economic model was linked to old discourses on hoarding and dissaving that had been known in European theology since the early Middle Ages. First, spending money on purposes such as soul masses or indulgences—as done under the old or “Catholic” Church paradigm—was not only foolish but also ungodly. It was now identified as unproductive, both economically and in soteriological terms. It meant taking away money that could have been given to someone else instead, or invested with a better return elsewhere. God had not put silver and gold into the mountains for them to be left idle, without transforming them into capital for consumption and investment. Here Luther reiterated scholastic author Oresmius, who, around 1358 in his Treatise on Money, had evoked the Ostrogoth King Theodoric (c. 451/6–526 ad) as the spiritual father of the dictum that “graves should be stripped of buried silver and gold treasure as wealth that had been put away this way would prove of no use to economy and society.”24 In this way, Luther was hardly original. But the way the argument became tweaked and used by others as a politico-economic narrative in the 1520s certainly was. The political economy of the German Reformation and the German political unification discourses of the late 1400s and early 1500s was based on the idea that Germany was suffering from a persistently negative balance of payments and that it was Rome and the curia that were the main offenders, mainly as the result of the financial streams due to indulgences and pilgrimages to Rome, as well as the papal dues, fees, and servitia that flew south toward Rome year after year. These discourses became connected with the indulgence question in 1517, as well as a more general problem in political economy and economics.

In his On Commerce and Usury, Luther also presented a sharp analysis of the most common practices of market distortion, then captured under the catch-all term or label “monopoly.” Such practices extended to the following activities:25

  • Profiteering.

  • Forestalling. Luther contrasts the practice of forestalling with the charitable actions by Joseph in Genesis 41:48.

  • Price dumping.

  • On futures, Luther remarked: Again, it is a fine piece of sharp practice when one man sells to another, by means of empty promises (“Mit worten ym sack,” in the German original), goods which he himself has not, as follows. This included an element of arbitrage and speculation, as it involved insider information of where and when to buy the goods more cheaply before reselling them.

  • Undercutting of competitors in the trade, using straw men.

  • Price cartels. In paragraph 43 Luther mentions as a prime example of a price cartel the Company of Merchant Adventurers of London, a company that existed between the early 13th and the early 19th century and which controlled English broadcloth exports to the continent, wielding not only considerable commercial but also some political influence. This company sent, in 1600 still, about three-quarters of its cloth exports to the Netherlands and German markets.

  • Ruinous competition by selling the same good at a higher price upon credit to someone from whom the seller will buy it back at a discount.

  • Going bankrupt just for the sake of it. Business turnover will be grotesquely inflated by loans most of which the merchant will be unlikely to ever repay. By declaring bankruptcy and fleeing the country or seeking refuge in a church asylum the merchant returns afresh into business with the main share of his liabilities cancelled.

  • Manipulation or adulteration of merchandize. Several ways of violating contracts due to changes in the outer appearance of goods put up for sale.

On the role of the state Luther was likewise specific: the “state” or temporal authorities had to take care of roads and public infrastructure to be in good shape, to enforce “law and order,” to have a monopoly on violence and to enforce a good standard of Christian behavior and Christian morals across a society that was more often than not ridden with cunning and immoral individuals who were neither truly Christian nor particularly inclined to uphold areas such as a well-governed common weal in good or “true” Christian spirit.

Luther’s view of the resulting role of the government and the ruler, as first “bishop” and first enforcer not only of the law but also of Christian communality and Christian spirit, has earned him his proverbial reputation as being someone submissive to authority, perhaps oversubmissive, at least in his writings and recommendations. And some members of the Lutheran churches were certainly known to have had a quite unholy relationship with the government and ideology of Germany during the age of National Socialism, 1933–1945. Be that as it may, in his big Sermon On Commerce and Usury, Luther also preformulated some aspects that have become, since the 1990s, cornerstones of so-called “new institutional economics,” a branch of economic reasoning concerned with the role of institutions, rules of exchange, and law in governing the economic process and setting the framework upon which “good” or “bad” economics, “good” or “bad” economic performance, countries succeeding or “failing,” will ultimately depend.

What Can We Learn from Luther? Possibilities for Further Research

We can see a surprising number of modern and useful insights presented in the oeuvre of Luther the economist. This should not be based upon reading Luther with the eye of the modernist. That would be teleological and thus unhelpful. Rather, Luther’s work tells us how timeless are some of the conflicts and debates, which we usually associate with modern times. Luther invokes us to step back a moment and reflect upon the more urgent questions of today, as well as ancient times:

  • - Do markets need rules?

  • - If so, why, what rules, and how many?

  • - How tightly should markets be governed?

  • - How much “state” do we need in “economy”?

  • - Does the economy need morals?

As is true today, there always had been two competing schools and canons of economic reasoning. Today it is accepted that markets should be free and the economy should work alongside competitive rationales. But until very recently, the so-called neoliberal vision had been mainstream, going much further than Luther, arguing that markets were best left unfettered and free from any intrusions of the state whatsoever. Luther and the late medieval Scholastic theologian-economists would have concurred with the moderate liberals of our age, emphasizing free markets bound by borders and rules of the game, and accepting that even interventionist states play an important role at times when it comes to generating or stabilizing societal welfare. This was the “laissez-faire with the nonsense taken out,” in the words of Joseph Schumpeter, the model that has made Europe rich for the last five centuries or so.

The post-1979 socio-economic experiments of the Thatcher and Reagan era during the Age of Neoliberalism, pushing back the state from the economy, reducing government expenditure, and extending the realm of the market principle across society, were accompanied by an economists’ discourse that expressly featured an economistic approach coupled with a radical free-market vision. The allocation of productive factors and resources across society and economy should be left to the forces of the competitive markets, the story went. More and more aspects of individual life, feeling, and even emotions would be explained by an “economic” model and approach (G. S. Becker).26 Such ideas represented, until very recently, the mainstream in the social and economic sciences. They have only begun to be called in question during the recent global financial and economic crisis. Looking back at Luther’s time and age, we find a similar dragon fight taking place on the stage of the German imperial diets and the “Luther Question,” or Causa Lutheri. The 1520s and 1530s were a time not only of confessional rift, political conflict, and social turmoil but also of major intellectual battles fought between economic liberals, in the best sense of the word (Luther belonged to them: liberalism with a sense of market governance), on the one hand, and the more radical market radicals à la Conrad Peutinger, the Augsburg notary and advocate of the great financiers and merchant bankers, on the other hand. In the 1530s, the conservative liberalism of Luther and the late medieval Scholastic consensus got the upper hand. Four hundred and fifty years later, in the Age of Neoliberalism post-1979, it was the other way round. It has been only very recently that the tides have begun to turn.

In other words: the deep history of neoliberalism starts before the 1970s. It started – if we may be allowed such a grand-sweep claim (never forgetting, of course, that no two historical times and ages can ever be the same) – right in the age of Luther, in the 1520s. And Martin Luther and the Causa Lutheri were right in the heart of it. Future research should aim at shedding more light on this by combining methods drawn from economic analysis and the history of economic thought with more traditional-historical approaches to Luther and, of course, historical theology, ethics, and perhaps anthropology. The present exercise also suggests that in order to understand the man Martin Luther and the Reformation of 1517, it pays to study the economic origins, circumstances, and consequences of the event.

Further Reading

Barge, Hermann. Luther und der Frühkapitalismus. Gütersloh: Bertelsmann, 1951.Find this resource:

Kaye, Joel. Economy and Nature in the Fourteenth Century: Money, Market Exchange, and the Emergence of Scientific Thought. Cambridge, U.K.: Cambridge University Press, 2009.Find this resource:

Langholm, Odd Inge. Economics in the Medieval Schools: Wealth, Exchange, Value, Money and Usury According to the Paris Theological Tradition, 1200–1350. Leiden, The Netherlands: Brill, 1992.Find this resource:

Langholm, Odd Inge. The Legacy of Scholasticism in Economic Thought. Antecedents of Choice and Power. Cambridge, U.K.: Cambridge University Press, 1998.Find this resource:

de Roover, Raymond. “Scholastic Economics: Survival and Lasting Influence from the Sixteenth Century to Adam Smith.” Quarterly Journal of Economics 69 (1955): 161–190.Find this resource:

de Roover, Raymond. “The Scholastics, Usury, and Foreign Exchange.” Business History Review 41.3 (1967): 257–271.Find this resource:

Rössner, Philipp Robinson, ed. Martin Luther on Commerce and Usury (1524). London and New York: Anthem, 2015.Find this resource:

Rössner, Philipp Robinson. “Luther—Ein tüchtiger Ökonom? Über die monetären Ursprünge der Deutschen Reformation.” Zeitschrift für Historische Forschung 42.1 (2015): 37–74.Find this resource:

Rössner, Philipp Robinson. “Burying Money? Monetary Origins and Afterlives of Luther’s Reformation.” History of Political Economy 48.2 (2016): 225–263.Find this resource:

Wood, Diana. Medieval Economic Thought. Cambridge, U.K.: Cambridge University Press, 2002.Find this resource:


(1.) David Harvey, A Brief History of Neoliberalism (Oxford: Oxford University Press, 2005).

(2.) I am following the theological interpretation of Hans-Martin Barth, Die Theologie Martin Luthers: Eine kritische Würdigung (Gütersloh: Gütersloher Verlagshaus, 2009).

(3.) On Scholastic economics, see three works by Odd Inge Langholm, Economics in the Medieval Schools: Wealth, Exchange, Value, Money and Usury According to the Paris Theological Tradition, 1200–1350 (Leiden, The Netherlands: Brill, 1992); The Legacy of Scholasticism in Economic Thought: Antecedents of Choice and Power (Cambridge, U.K.: Cambridge University Press, 1998); and “Monopoly and Market Irregularities in Medieval Thought,” Journal of the History of Economic Thought 28 (2006): 395–411. See further: Joel Kaye, Economy and Nature in the Fourteenth Century: Money, Market Exchange, and the Emergence of Scientific Thought (Cambridge, U.K.: Cambridge University Press, 2009); Diana Wood, Medieval Economic Thought (Cambridge, U.K.: Cambridge University Press, 2002); and the still eminently useful older interpretation by Raymond de Roover, of which his “Scholastic Economics: Survival and Lasting Influence from the Sixteenth Century to Adam Smith,” Quarterly Journal of Economics 69 (1955): 161–190; and “The Scholastics, Usury, and Foreign Exchange,” Business History Review 41.3 (1967): 257–271, are particularly interesting.

(4.) See the classic work by Jacques Le Goff, The Birth of Purgatory (Chicago: University of Chicago Press, 1984), and the recent survey article by John Munro, “Usury, Calvinism and Credit in Protestant England: From the Sixteenth Century to the Industrial Revolution,” in Religione e istituzioni religiose nell’economia europea, 1000–1800 / Religion and Religious Institutions in the European Economy, 1000–1800, ed. Francesco Ammannati, 155–184 (Florence: Florence University Press, 2012), Gilomen (for medieval Switzerland), and Denzel.

(5.) Langholm, Legacy of Scholasticism in Economic Thought, 80.

(6.) See Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time (Boston: Beacon, 1944). In a similar spirit is Martha C. Howell, Commerce Before Capitalism in Europe, 1300–1600 (Cambridge, U.K., and New York: Cambridge University Press, 2010), chap. 1. On the social embeddedness of monetary transactions, see further: Viviana Zelizer, Economic Lives: How Culture Shapes the Economy (Princeton, NJ: Princeton University Press, 2011); Laurence Fontaine, The Moral Economy: Poverty, Credit, and Trust in Early Modern Europe (Cambridge, U.K.: Cambridge University Press, 2014); and Deborah Valenze, The Social Life of Money in the English Past (Cambridge, U.K.: Cambridge University Press, 2006).

(7.) See, e.g., C. Jaco Zuijderduijn, Medieval Capital Markets: Markets for “renten,” State Formation and Private Investment in Holland (1300–1550) (Leiden, The Netherlands, and Boston: Brill, 2009), or the comparative history of interest rates presented in Jan Luiten van Zanden, “Die mittelalterlichen Ursprünge des ‘europäischen Wunders,’” in Die Ursprünge der modernen Welt. Geschichte im wissenschaftlichen Vergleich, eds. James A. Robinson and Klaus Wiegandt, 475–516 (Frankfurt: Fischer, 2008).

(8.) On the bill of exchange and its development in the middle ages, see Markus A. Denzel, Das System des bargeldlosen Zahlungsverkehrs europäischer Prägung vom Mittel-alter bis 1914 (Stuttgart: Franz Steiner, 2008); and Denzel, Handbook of World Exchange Rates, 1590–1914 (Farnham and Burlington, VT: Ashgate, 2010).

(9.) For further discussion and literature, see my introduction to Philipp Robinson Rössner, ed., Martin Luther on Commerce and Usury (London and New York: Anthem, 2015), 1–161.

(10.) Hans-Jürgen Prien, Luthers Wirtschaftsethik (Göttingen: Vandenhoeck & Ruprecht, 1992).

(11.) Ulinka Rublack, Reformation Europe (Cambridge, U.K., and New York: Cambridge University Press, 2005), back cover.

(12.) Thomas Kaufmann, Martin Luther (Munich: Beck, 2015); and Heinz Schilling, Martin Luther: Rebell in einer Zeit des Umbruchs (Munich: Beck, 2012).

(13.) Philipp Robinson Rössner, Deflation—Devaluation—Rebellion: Geld im Zeitalter der Reformation (Stuttgart: Franz Steiner, 2012); and Rössner, “The Crisis of the Reformation (1517): Monetary and Economic Dimensions of a Change in Paradigm,” in Le crisi finanziarie: Gestione, implicazioni soiali e conseguenze nell’età preindustrialie / The Financial Crises: Their Management, Their Social Implications and Their Consequences in Pre-Industrial Times, 19–48 (Florence: Firenze University Press, 2016).

(14.) Most recent figures in John H. Munro, “The Monetary Origins of the ‘Price Revolution,’” in Global Connections and Monetary History, 1470–1800, eds. Dennis O. Flynn, Arturo Giráldez, and Richard von Glahn, 1–34, tables and discussion (Aldershot and Burlington, VT: Ashgate, 2003).

(15.) On silver mining and monetary policy in the age of silver scarcity and boom, see Rössner, Deflation—Devaluation—Rebellion, chap. 3; and more technical, Rössner, “Monetary Instability, Lack of Integration and the Curse of a Commodity Money Standard: The German Lands, c. 1400–1900 A.D.,” Credit and Capital Markets 47.2 (2014): 297–334.

(16.) The heller or half-penny was the smallest denomination coin in the central German lands in Luther’s time. Until the later 1530s, one heller would have exchanged at 1/504th of a Rhenish florin or gulden.

(17.) Rössner, Deflation—Devaluation – Rebellion. See also Ulrich Pfister, “Realeinkommen,” in Enzyklopädie der Neuzeit, vol. 10, Physiologie—Religiöses Epos (Stuttgart and Weimar: Metzler, 2011), col. 666–673, on living standards, essentially confirming Luther’s intuition.

(18.) Space does not permit listing all relevant works and recent biographies of Luther. Among the best pieces published in recent years clearly are Schilling, Martin Luther, and Lyndal Roper, Martin Luther: Renegade and Prophet (London: Penguin, 2016).

(19.) Ulrich Wenner, “‘Fundgrubner, Berckhauer und Schlacktreiber’—Montanwortschatz bei Martin Luther,” in Martin Luther und der Bergbau im Mansfelder Land, ed. Rosemarie Knape, 205–217 (Lutherstadt Eisleben: Stiftung Luthergedenkstätten in Sachsen-Anhalt, 2000).

(20.) I have developed this more fully in Rössner, Martin Luther on Commerce and Usury, introduction, as well as my other works referred to in note 13. Other useful works on Luther’s economic thinking—not always in agreement with the argument presented here—include the respective sections in Wilhelm Roscher, Geschichte der National-Oekonomik in Deutschland (Munich: Oldenbourg, 1874); Gustav (von) Schmoller, “Zur Geschichte der national-ökonomischen Ansichten in Deutschland während der Reformations-Periode,” Zeitschrift für Gesamte Staatswissenschaft 16 (1860): 461–716; Günter Fabiunke, Martin Luther als Nationalökonom (Berlin: Akademie Verlag, 1963) (for a mainstream communist interpretation); Theodor Strohm, “Luthers Wirtschafts- und Sozialethik,” in Leben und Werk Martin Luthers von 1526 bis 1546, vol. 1, ed. Helmar Junghans, 205–223 (Berlin: Evangelische Verlagsanstalt, 1983); Tom Scott, “The Reformation and Modern Political Economy: Luther and Gaismair Compared,” in Die deutsche Reformation zwischen Spätmittelalter und Früher Neuzeit, ed. Thomas A. Brady, 173–202 (Munich: Oldenbourg, 2001), updated reprint in Scott, The Early Reformation in Germany: Between Secular Impact and Radical Vision (Farnham and Burlington, VT: Ashgate, 2013). Also, Andreas Pawlas, Die lutherische Berufs- und Wirtschaftsethik. Eine Einführung (Neukirchen: Neukirchner Verlag, 2000), Prien, Luthers Wirtschaftsethik; Ricardo Rieth, Die “Habsucht” bei Martin Luther: Ökonomisches und theologisches Denken, Tradition und soziale Wirklichkeit im Zeitalter der Reformation (Weimar: Böhlau, 1996); and Rieth, “Luthers Antworten auf wirtschaftliche und soziale Herausforderungen seiner Zeit,” in Luthers Ethik: Christliches Leben in ecclesia, oeconomia, politica = Luther’s Ethics in the Realms of Church, Household, Politics. Referate und Berichte des Elften Internationalen Kongresses für Lutherforschung, Canoas/RS 21–27 July 2007, ed. Helmar Junghans, 137–158 (Göttingen: Vandenhoeck & Ruprecht, 2010); and Philipp Koch, Gerechtes Wirtschaften: Das Problem der Gerechtigkeit in der Wirtschaft im Lichte lutherischer Ethik (Göttingen: Vandenhoeck & Ruprecht, 2012). More recent interpretations can be found in Odd Inge Langholm, “Martin Luther’s Doctrine on Trade and Price in Its Literary Context,” History of Political Economy 41.1 (2009): 89–107; and John D. Singleton, “‘Money Is a Sterile Thing’: Martin Luther on the Immorality of Usury Reconsidered,” History of Political Economy 43.4 (2011): 683–698.

(21.) Rössner, Martin Luther on Commerce and Usury, introduction; and Rössner, “Luther—Ein tüchtiger Ökonom? Über die monetären Ursprünge der Deutschen Reformation,” Zeitschrift für Historische Forschung 42.1 (2015): 37–74.

(22.) See also, along these lines, Richard Sennett, The Craftsman (London: Penguin, 2008).

(23.) John Maynard Keynes, The General Theory of Employment, Interest and Money (London: Macmillan, 1936).

(24.) F. W. Lomler, G. F. Lucius, J. Rust, and L. Sackreuter, eds., Geist aus Luther’s Schriften, oder: Concordanz der Ansichten und Urtheile des großen Reformators über die wichtigsten Gegenstände des Glaubens, der Wissenschaft und des Lebens, vol. 2: G bis J (Darmstadt: Karl Wilhelm Leske, 1829), 249.

(25.) Here I am following Rössner, Martin Luther on Commerce and Usury, partly verbatim.

(26.) Gary S. Becker, The economic approach to human behavior (Chicago: Chicago University Press, 1976).