Two famous Reformation woodcuts depict Luther as the “German Hercules” and as a “Wild Man.” The former depicts Luther larger than life, the pope hanging from his nose, laying waste with a huge club the personifications of monasticism and scholasticism. The “Wild Man” depiction is what contemporary scholars refer to as the iconography of “the reversible world,” the world turned upside-down. The Reformation overturned the late medieval world, including its views of money.

Luther was a “Wild Man” with respect to money because he attacked every contemporary expression of the counterfeit gospel that a person’s worth depends on his or her accomplishments. His club was the good news that human worth is totally independent of success, be it measured in terms of renunciation or acquisition of the world. Thus Luther fought a two-sided battle against both monastic asceticism and emerging capitalism (“usury”). The first battle is well-known, but the second has frequently been obscured by the common association of the “Protestant ethic” with the “spirit of capitalism.” But to Luther both sides really belonged to the same coin, salvation by works.

Luther’s Attack on Monastic Asceticism

Medieval monasticism narrowed the spiritual asceticism of the early church to renunciation of the world. Poverty was idealized into a kind of spiritual capitalism for poor and rich alike. The poor were on the preferred path of salvation, and the rich earned merit for salvation by almsgiving. The foremost figure in the medieval poverty movement was certainly Francis of Assisi, whose rejection of money served to radicalize discipleship and to alleviate anxiety about the corrupting effect of money and business.

Luther’s response was unequivocal: “Many people, of both low and high estate, yes, all the world, were deceived by this pretense. They were taken in by it, thinking: ‘Ah, this is something extraordinary! The dear fathers lead such an ascetic life;…’ Indeed, if you want to dupe people, you must play the eccentric” (“Sermons on the Gospel of St. John”).

On Francis, Luther commented: “I do not think that Francis was an evil man; but the facts prove that he was naive or, to state it more truthfully, foolish.” His foolishness was in supposing that money was evil in itself, and in displacing the free forgiveness of sins through Christ by a new law of renunciation. “If silver and gold are things evil in themselves, then those who keep away from them deserve to be praised. But if they are good creatures of God, which we can use both for the needs of our neighbor and for the glory of God, is not a person silly, yes, even unthankful to God, if he refrains from them as though they were evil? For they are not evil, even though they have been subjected to vanity and evil. …If God has given you wealth, give thanks to God, and see that you make right use of it…” (“Lectures on Genesis”). The problem is not money but its use. The greedy misuse the world by striving to acquire it; the monastics, by struggling to renounce it. The end result for both is personal insecurity because trust is placed in self-achievement rather than in God. Meanwhile, the neighbor is neglected.

Luther’s Attack on Early Capitalism

The medieval ideology of poverty had been entrenched for centuries, but the acceptance of the idea that money can make money was relatively new in Luther’s day. This usury was condemned by the medieval church as late as the Fifth Lateran Council in 1515. But by all accounts, the entrepreneur was well-established by this time.

Luther found the calculating entrepreneur extremely distasteful. He was convinced that the capitalist spirit divorced money from use for human needs and necessitated an economy of acquisition. From his brief “Sermon on Usury” (1519) to his “Admonition to the Clergy that they Preach against Usury” (1540), Luther consistently preached and wrote against the expanding money and credit economy as a great sin. “After the devil there is no greater human enemy on earth than a miser and usurer, for he desires to be above everyone. Turks, soldiers, and tyrants are also evil men, yet they must allow the people to live…; indeed, they must now and then be somewhat merciful. But a usurer and miser-belly desires that the entire world be ruined in order that there be hunger, thirst, misery, and need so that he can have everything and so that everyone must depend upon him and be his slave as if he were God.” “Daily the poor are defrauded. New burdens and high prices are imposed. Everyone misuses the market in his own willful, conceited, arrogant way, as if it were his right and privilege to sell his goods as dearly as he pleases without a word of criticism.”

This “lust for profits,” Luther observed, had many clever expressions: selling on time and credit, manipulating the market by withholding or dumping goods, developing cartels and monopolies, falsifying bankruptcies, trading in futures, and just plain misrepresenting goods. Such usury, Luther argued, affects everyone. “The usury which occurs in Leipzig, Augsburg, Frankfurt, and other comparable cities is felt in our market and our kitchen. The usurers are eating our food and drinking our drink.” Even worse, however, is that by manipulating prices “usury lives off the bodies of the poor.” In his own inimitable style, Luther exploded, “The world is one big whorehouse, completely submerged in greed,” where the “big thieves hang the little thieves.” Thus he exhorted pastors to condemn usury as stealing and murder, and to refuse absolution and the sacrament to usurers unless they repent.

It is important to note that Luther’s concern was not merely about an individual’s use of money, but also the structural social damage inherent in the idolatry of the “laws” of the market. Ideas of an “impersonal market” and “autonomous laws of economics” were abhorrent to Luther because he saw them as both idolatrous and socially destructive. He saw the entire community endangered by the financial power of a few great economic centers. The rising world economy was already beginning to suck up urban and local economics, and to threaten an as yet unheard of opposition between rich and poor. He saw an economic coercion immune to normal jurisdiction which would destroy the ethos of the community. This is why Luther considered early capitalism to constitute a status confessionis for the church, in spite of the fact that many of his contemporaries thought he was tilting at windmills.

Luther believed that not only was the church called to publicly and unequivocally reject these economic developments, but also to develop a constructive social ethic in response to them. This social ethic developed social welfare policies and legislation, and called for public accountability of large business through government regulation.

Social Welfare Policies and Legislation

The widespread poverty, vagrancy, and underemployment of the late medieval period was legitimated by the church’s ideology of poverty and exacerbated by the new economic developments. The schema of salvation which presented poverty as the ideal Christian life and anchored it in society through the promises of earthly and heavenly rewards due the almsgiver kept people from recognizing and alleviating the social distress of poverty.

Luther’s doctrine of justification cut the nerve of this medieval ideology of poverty. Since salvation is purely a gift of God apart from human works, both poverty and almsgiving lose saving significance. By de-spiritualizing poverty, the Reformers could recognize poverty in every form as a personal and social evil to be combatted. Under the rubrics of justice and love to the neighbor, Luther and his colleagues quickly moved in alliance with local governments to establish new social welfare policies and legislation.

The first major effort was the Wittenberg Church Order of 1522 which established a “common chest” for welfare work. Initially funded by medieval ecclesiastical endowments and later supplemented by taxes, the Wittenberg Order prohibited begging; provided interest-free loans to artisans, who were to repay them whenever possible; provided for poor orphans, the children of poor people, and poor maidens who needed an appropriate dowry for marriage; provided refinancing of high-interest loans at 4% annual interest for burdened citizens; and supported the education or vocational training of poor children. To the objection that this was open to abuse, Luther replied, “He who has nothing to live should be aided. If he deceives us, what then? He must be aided again.” Other communities quickly picked up these ideas. By 1523 there were common chest provisions for social welfare in the church orders of Leisnig, Augsburg, Nuremberg, Altenburg, Kitzingen, Strasbourg, Breslau, and Regensburg.

These ordinances for poor relief were efforts to implement Luther’s conviction that social welfare policies designed to prevent as well as remedy poverty are a Christian social responsibility. Under the motto “there should be no beggars among Christians,” the early Reformation movement set about implementing concern for personal dignity and public alleviation of suffering.

Civic Control of Capitalism

While Luther’s efforts to develop welfare legislation were well-received in the cities and territories which accepted the Reformation, his efforts to encourage civic control of capitalism gained little support. Of course, it is hardly surprising that, when interest rates could soar to 50%, bankers turned a deaf ear to his call for a 5% ceiling on interest. Also, Luther’s criticism of capitalism included far more than exorbitant interest rates. Social need always stood above personal gain. “… In a well-arranged commonwealth the debts of the poor who are in need ought to be cancelled, and they ought to be helped; hence the action of collecting has its place only against the lazy and the ne’er-do-well” (“Lectures on Deuteronomy”).

Luther found that it is easier to motivate assistance to individuals than it is to curb the economic practices which create their poverty. Poverty’s squalor calls out for redress, whereas the attractive trappings of business muffle criticism. Yet the effects of early capitalism could be felt. In Wittenberg between 1520 and 1538, prices doubled but wages remained the same. Luther called this murder and robbery in disguise. “… How skillfully Sir Greed can dress up to look like a pious man if that seems to be what the occasion requires, while he is actually a double scoundrel and a liar” (“Commentary on the Sermon on the Mount”). “God opposes usury and greed, yet no one realizes this because it is not simple murder and robbery. Rather usury is a more diverse, insatiable murder and robbery. …Thus everyone should see to his worldly and spiritual office as commanded to punish the wicked and protect the pious” (An die Pfarrherrn).

In his 1525 advice to the Town Council of Danzig, Luther stated that government regulation of interest should be according to the principle of equity. For example, a mortgage of 5% would be equitable, but it should be reduced if it does not yield this return. At the same time, one should consider persons. The well-to-do could be induced to waive a part of his interest, whereas an old person without means should retain it. But these views were of minimal influence. Legislation was introduced in Dresden in 1529 which prohibited 15–20% interest in favor of a 5% rate. This in turn influenced the reform of the Zwickau city laws in 1539. Yet it was also noted then how often the Dresden legislation was violated.

That these examples may indicate more failure than success is confirmed by the 1564–1565 controversy in Rudolfstadt. The Lutheran pastor there refused to commune two parishioners who lived by “usury.” The theological faculties of Wittenberg, Leipzig, and Jena were requested to give their opinions. They concluded against the pastor, who then had to leave town; and they did not recognize Luther as an authority on this issue.

After this, there was never again a serious effort to acknowledge Luther’s position on usury. Luther’s followers first ignored and then forgot his position against early capitalism. On the question of money, even Luther’s followers thought he was too wild to follow.


Luther’s efforts to turn the early capitalist world upside-down by insisting on government regulation of business and the remission of burdensome debts was countered by the powerful of his day. But it was not only Luther who was powerless. When Emperor Charles V made motions in the direction of stricter business controls, the Fugger banking house reminded him of his outstanding debts to them, and the mining monopolies claimed the right to act as they pleased. Luther was not utopian in these matters. He commented that the world cannot be without usury anymore than it can be without sin, but woe to the person by whom it comes.

Nevertheless, throughout his career, Luther fought against what he saw as the two-sided coin of mammonism: ascetic flight from money and the acquisitive drive for it. His foundation for this battle was the great reversal of the gospel that a person’s worth is not determined by what he or she does or does not possess, but rather by God’s promise in Christ. Thus money is not the lord of life, but the gift of God for serving the neighbor and building up the community.

Carter Lindberg is Professor of Church History at Boston University School of Theology. He is the author of A Third Reformation?